BAKU, Azerbaijan, April 6
By Leman Zeynalova - Trend:
UK-based Petrofac company has made a decision on reducing overhead and project support costs by at least $100 million in 2020 and by up to $200 million in 2021, Trend reports citing the company.
The company has also decided to conserve cash and liquidity by reducing capex by 40 percent and suspending the 2019 final dividend.
Petrofac remains focused on taking all necessary steps to ensure the health and well-being of its employees, clients, suppliers and communities.
“Stringent health protocols are in place across all our operations and we have transitioned quickly and effectively to remote working to minimise business disruption. Engineering and construction activity continues at most of our Engineering & Construction (E&C) project sites and offices, although progress is being impacted by supply chain disruptions, travel restrictions and the Government enforced lockdowns in India and Iraq. Operations and maintenance activity in our Engineering & Production Services (EPS) business continues in all regions, albeit travel and social distancing restrictions are having a modest impact on activity levels,” the company said.
Petrofac said it is committed to maintaining a strong balance sheet and liquidity.
“As at 2 April 2020, the Group had liquidity of $1.1 billion, following the planned repayment of a $75 million facility in February 2020. A two-year extension of a $150 million term loan in March 2020 has reduced debt maturities in the next 12 months to $275 million,” said the company.
In this period of extreme economic uncertainty, management believe it is prudent to take steps to preserve cash and liquidity, including cutting capital expenditure by 40 percent ($60 million) in 2020 and managing working capital.
“In addition, the Board is withdrawing its recommendation of a final dividend of 25.3 US cents ($85 million) announced on 25 February 2020. The Board recognizes the importance of dividends to shareholders and will review the resumption and payment of dividends when the full impact of COVID-19 and low oil prices is known."
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