Petrofac shares plunged by 17% yesterday after it warned of little or no growth next year.
The energy service giant was the FTSE 100 Index’s biggest faller after it also said it was putting off projects in Abu Dhabi and Malaysia to 2015, meaning the loss of substantial income in 2014.
But the group reported good progress with upstream investments, while it continued to see an “attractive pipeline of bidding opportunities” for its offshore projects and operations arm.
Petrofac added the division had recently secured a £59million maintenance deal with Russia’s Gazprom for the Barra oilfield in Iraq and contract extensions, including one worth £61.5million, for work offshore Iraq and in the UK North Sea.
Major upcoming projects for the firm include the deployment of the refurbished floating production facility FPF1 on Ithaca Energy’s Greater Stella Area North Sea development.
Petrofac said the vessel had been successfully refloated and was expected to start oil production from Greater Stella in the second half of next year.
Analysts had previously forecast net income growth of about 16% during 2014 for Petrofac, which designs and builds infrastructure and also invests in fields alongside oil firms.
In an interim management statement yesterday, Petrofac said it still aimed to hit its target of around £535million in annual net income by 2015 but next year’s guidance now means the firm needs to see a jump of about one-third the year after next.
Petrofac has long highlighted its aim to double 2010 net income by 2015, with investors regarding it as a key benchmarks.
The forecast income leap in 2015 is expected to come from mainly from Petrofac’s integrated energy services division, which takes equity stakes in oilfields, as significant production comes on stream from projects in the North Sea, Malaysia and Tunisia.
Chief executive Ayman Asfari said: “We remain confident of the long-term growth trajectory, given our record backlog, the robustness of our contract portfolio and the strength of our bidding pipeline.”
The City was less confident, causing Petrofac’s shares to plummet by £2.39 for a market close of £12.