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| Petrofac shares sink on profit warning | Petrofac shares sink on profit warning |
| (about 1 hour later) | |
| Shares in Petrofac have fallen by more than a quarter after the oil and gas services group warned that its profits are set to be lower than expected. | Shares in Petrofac have fallen by more than a quarter after the oil and gas services group warned that its profits are set to be lower than expected. |
| Net profits for 2015 are set to be around $500m (£319m), which is about $190m below analysts' forecasts. | Net profits for 2015 are set to be around $500m (£319m), which is about $190m below analysts' forecasts. |
| The company also said net profit for 2014 will be at the lower end of its predicted range of $580-600m. | The company also said net profit for 2014 will be at the lower end of its predicted range of $580-600m. |
| It blamed falling oil prices, changes to project timings and problems with a project in the Shetland Islands. | It blamed falling oil prices, changes to project timings and problems with a project in the Shetland Islands. |
| Those issues included a protracted union dispute, as well as bad weather that had resulted in 300 days of interruption to the project. | Those issues included a protracted union dispute, as well as bad weather that had resulted in 300 days of interruption to the project. |
| At close Petrofac shares were down 26.45%, or 315.50p, at 877.50p. | |
| Oil prices have been falling since the summer due to plentiful supply, partly from US shale, and weaker demand in Europe and Asia. | Oil prices have been falling since the summer due to plentiful supply, partly from US shale, and weaker demand in Europe and Asia. |
| Brent crude has fallen 34% since June to a four-year low of $76.76 a barrel on 14 November before recovering slightly. | Brent crude has fallen 34% since June to a four-year low of $76.76 a barrel on 14 November before recovering slightly. |
| 'Grim picture' | 'Grim picture' |
| Ayman Asfari, chief executive, said it had been a difficult period for both Petrofac and the industry. | Ayman Asfari, chief executive, said it had been a difficult period for both Petrofac and the industry. |
| "In the main our project portfolio is in good shape, but it is clear that on a small number of projects our execution has fallen short of the high standards we set for ourselves." | "In the main our project portfolio is in good shape, but it is clear that on a small number of projects our execution has fallen short of the high standards we set for ourselves." |
| He added: "The medium-term growth prospects for our business remain strong." | He added: "The medium-term growth prospects for our business remain strong." |
| Daniel Sugarman, market strategist at ETX Capital, said: "The firm has painted a grim picture for 2015, warning of an expected profits decline of around 25%. | Daniel Sugarman, market strategist at ETX Capital, said: "The firm has painted a grim picture for 2015, warning of an expected profits decline of around 25%. |
| "Falling oil prices, due in part to both a huge boost in US oil production and a decline in Chinese demand, show relatively little sign of improving drastically in the near future - something bound to affect Petrofac's bottom line." | "Falling oil prices, due in part to both a huge boost in US oil production and a decline in Chinese demand, show relatively little sign of improving drastically in the near future - something bound to affect Petrofac's bottom line." |
| The company said in August that net profit for the six months to June 30 fell $107m to $136m, with revenues down $300m to $2.5bn. Petrofac said that net profit for 2014 was significantly weighted towards the second half of the year. | The company said in August that net profit for the six months to June 30 fell $107m to $136m, with revenues down $300m to $2.5bn. Petrofac said that net profit for 2014 was significantly weighted towards the second half of the year. |
| Petrofac has more than 18,000 employees and seven operational centres including Aberdeen, Mumbai and Kuala Lumpur. | Petrofac has more than 18,000 employees and seven operational centres including Aberdeen, Mumbai and Kuala Lumpur. |