Sometimes contract awards are genuinely transformational for a business and, at first glance, the €13 billion award unveiled by Petrofac (PFC) is in that category.

The agreement, the largest in Petrofac’s history, will see the UK firm work alongside Hitachi Energy to supply multiple offshore wind platforms and onshore converter stations in the North Sea on behalf of the Dutch-German transmission system operator TenneT. Its share of the €13 billion headline number will be roughly half, bringing in order intake of €6 billion between 2023 and 2026.

Before the news the consensus forecasts for 2023 revenue and earnings after tax were $2.7 billion and $26 million respectively. Even after an initial 70%-plus surge in the share price to 85p the shares were still a long way short of their 12-month highs above 160p.

Berenberg analyst Henry Tarr commented: ‘This agreement with TenneT provides a material boost to the backlog and increases visibility over a significant part of future revenue. To drive further material upside in the shares, the company needs to start signing further contract awards in its conventional oil and gas markets.’

Petrofac posts its full-year results on 25 April and investors will be looking for an update on its pipeline of potential contract awards and any fresh guidance for 2023 then.

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