PETROFAC bosses said today it was “unclear” how long market conditions would keep disrupting business activity and impact business performance.
Publishing its latest trading update the company said the Covid-19 pandemic and oil price slump had “materially impacted” financial performance and new orders in the first half of 2020.
Chief executive Ayman Asfari said: “In these unprecedented times, we are doing everything within our control to protect the long-term health of the business.”
The company said that while projects were progressing, the pandemic has resulted in “material delays in construction activity”, which won’t be recovered in 2020.
Petrofac had net debt of £111 million at the end of May, against net cash of £12m at year end.
One of the highlights for the firm was new orders in Scotland.
Petrofac, which has a major operating base in Aberdeen, bagged a multimillion-pound contract for the giant 120-turbine Seagreen wind project off Angus.
Petrofac said the contract was a “landmark” as it continued to diversify into renewable energy
The London-listed company also closed a deal with Aberdeenshire firm Pale Blue Dot Energy to support front end engineering design and concept select work on the Acorn carbon capture and storage and hydrogen project at the St Fergus terminal near Peterhead.
New order intake for the year to date totalled £800m, while Petrofac has its eye on contracts worth £38 billion which are expected to be put out to tender and awarded by the end of 2021.
Petrofac also said it was on track to deliver £100m of cost savings in 2020 and up to £165m in 2021.
Mr Asfari said: “We have taken swift, decisive action to structurally reduce costs, preserve cash and maintain our competitiveness.
“In doing so, we have preserved core capability whilst continuing to invest in digitalisation and our client relationships.
“Looking ahead, it is unclear how long market conditions will continue to disrupt business activity and delay awards.”