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Petrofac lifts cost cutting target as pandemic hits oil market
StockMarketWire.com
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Oil services company Petrofac lifted its cost cutting target while reiterating guidance for 'materially lower' profits in 2020 after the Covid-19 pandemic smashed crude markets.
Revenue for the year through December was expected to be around $4.0 billion, down from $5.53 billion reported for 2019.
It added that it also was on track to cut gross overhead and project support costs by at least $125 million in 2020.
Additional measures were being taken to increase the 2021 cost saving target to around $250 million.
'The Covid-19 pandemic and collapse in oil prices have had a material impact on our industry in 2020,' chief executive Ayman Asfari said.
'Notwithstanding these unprecedented challenges, we have continued to deliver for clients whilst doing everything within our control to protect the health and wellbeing of our people.'
'We have also taken decisive action to protect our balance sheet, liquidity and the long-term health of the business.'
'All these actions have protected margins and cash flow, and the group is trading in line with expectations as we approach the year end.'
Looking ahead, Afari said the near-term economic outlook remained unclear, while noting that clients were delaying awards and adopting tough commercial positions.
'In this environment, our strategic priorities are clear,' he said.
'We are focused on conserving cash, cutting costs and rebuilding backlog, while delivering operational excellence.'
'In the very near term, we are taking additional measures to reduce costs further in 2021 while preserving our core capability.'
'These measures - together with a strong bidding pipeline, our long-established position in attractive markets, our track record for delivery and a sharp focus on competitiveness - will position us well for opportunities when the market recovers.'
Story provided by StockMarketWire.com
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