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Slift,
The going concern statement isn’t in the report for the negative reason you seem to presume ., it’s the opposite in fact!!,, it’s simply a fundamental principle of accounting to demonstrate the liquidity of a company during and beyond its next financial accounting period., its tested under a variety of scenarios, as outlined!!!, standard reporting procedure!!,
Paddy, I agree. Mr Slift is being a bit naughty here I feel. The disclaimer has been a feature of numerous companies in this pandemic as the rule require them to declare a worst case scenario. To infer anything more sinister is a tad naughty.
Paddyboy1,
Yeah I don't think so. I'm not going to argue here with you as i'll be following this company closely.
But take a moment to go read the going concern statement and why there is a going concern statement, despite there being enough liquidity.
It's very well explained by Petrofac.
Slift, i imagine a huge number of companies have had to make going concern statements due to the pandemic. Point is PFC has huge liquidity comparable to debt levels. Look @RR as a case in point!
Pokerchips,
India, Libya etc. are already included in the $20b pipeline for 2021.
Assuming Petrofac achieves 30% win rate on tenders for 2021, they need to tender for approx. 45-50% of current pipeline in 2021 to keep backlog constant by YE21 in comparison to YE20.
But I think SFO will be resolved by HY21, resuming any leftover awards from Iraq, UAE and Saudi.
@paddyboy1,
There wouldn't be a going concern statement if Petrofac isn't worried about liquidity at the worst case scenario.
But it all depends on bid awards in 2021. Which is why I really believe pipeline and backlog is more important currently.
But ofcourse, you're able to do your own research.
well, we all know that on this one things can change in the blink of an eye on the slightest of news. What relaxes me most here is the liquidity position of the company. Considering the pandemic situation, i do believe PFC is in an enviable position from that perspective!
Slift
India,Libya etc will be growth geographies with less dependence on iraq etc ...
Tendering is all behind schedule due to obvious reasons affecting capital spend...creating a future bottleneck almost
Sure Paddy, but look at the fundamentals.
- $20b pipeline for award by YE21, of which only c. 30% tendered for/tendering for at the current moment.
They really need UAE, Iraq and Saudi relaxing or SFO conclusion to better improve current prospects.
- Net debt (as of 7th April): $354m
- 12 month going concern assessment period
Why I sold today. I don't think anyone should be concerned about SFO fine anymore. Pipeline and contract awards to build backlog is extremely crucial in 2021 for Petrofac, should they be a going concern.
I will follow here closely for future contract awards and will buy as and when I feel comfortable with contract awards and backlog.
There was also no doubt at all that Sami is showing the SFO that the PFC under his watch will work to the highest standards...Sami has been an excellent choice and will do a good job given 2 years to get the sector back into activity ..IMO
& for those feeling a bit down after today, spare a thought for our illustrious colleagues from a few weeks back who are having their sub £1 party over on RR. LOL
Poker, yes, agreed. The presentation by CEO & CFO was very impressive i thought. I've seen some very poor ones by some companies!
There is a lot of leverage in the markets and I get the impression that there are certain bears who would like to shake some out and get a bit of a resulting correction to buy back in, ready for later in the year
Always better to have a good strong BOD during a difficult market....than a useless BOD during a good market...
Today at least showed the new CEO and CFO and team know exactly what they want and have set a clear program for mid term recovery
Bit of a rubbish day all round really. Results were no shock to me & i think the dip here is far more to do with market sentiment than anything. This is back where it was a week ago, so no great shakes as far as i'm concerned. Will be back on the up in no time & now results out of the way, one less thing to be concerned with. If you're in for mid-long term no great cause for alarm IMO!
Duncan
Apologise. You are right. I was looking at the FCA short list and they have not updated yet. Doh!
DT
As expected, there was plenty of KitchenSinking to allow for upside in the future. All the bad news is out there and with the average SFO Case taking 4.7 years there is a prospect of this matter being concluded this year too.
Although PFC is down 8% Wood Group is down over 6% and they haven't released any results, so this was always going to be a bad day in the office (although it is somewhat compensated by a healthy rise yesterday).
Worldquant increased their short yesterday by 0.11%. Overall reportable shorts 4.43%.
Would be nice to get some good news on contracts / SFO.
DT
DT, agree the timing could have been better but equally it's only an issue if you are invested for the short term..
Wow! What a bummer of a day to release results. Timing is everything with these things and I guess today was not PFC's day.
No short reductions yesterday so looks like they were sitting on their hands. Engadine gets the trophy for smartest short, increasing a couple of days ago. Nice little 8% gain if they bought back today.
Topped up a few at 1.19 to bring my average down a bit. Still well underwater but fairly relaxed mid term.
Onwards and upwards please.
DT