News

PSN Operational Update 2009

PSN’s performance this year has been resilient through tough economic conditions and has shown that the Company can perform in both low and high oil price environments. The Company is now exceptionally positioned for future growth with its core focus remaining on further consolidation in the UK and investment in international expansion.
 
Highlights:

• 17% EBITDA growth with the expectation that full year 2009 growth will exceed plan by over 10%;
• Expanded order book currently valued at $2.4 billion;
• Cash reserves of $67 million, a 116% increase on the same period 2008;
• Significant contract extensions and renewals totalling in excess of $220 million;
• The award of several new contracts, valued in excess of $570 million, including
• BP UK to deliver engineering and construction services for all of its offshore assets and the onshore Dimlington plant over the next 5 years
• Lundin Petroleum for engineering and construction support for its Heather and Thistle assets in the UK’s Northern North Sea over the next 5 years
• An engineering design contract with Shell Gabon to support operations in its Gamba, Rabi and Toucan fields over the next 3 years;
• Employee retention rate (both staff and contractors) of over 99.5% across the period, a rate which ranks among the very best companies in the world.

Duncan Skinner, PSN’s Chief Financial Officer, said: "We have been delighted with the resilience of the business this year, which we attribute to working in line with our core values and showing unerring focus on delivering for customers. In these tough economic times we take on a vital responsibility with our customers in the provision of engineering and other services in the oil and gas industry.
 
"Our goals are to help our customers maximise their economic strength, to develop new and transparent systems to improve efficiency across our customers operations and to challenge established practices and norms to improve safety for all staff. It is testament to the successful delivery of these working practices that we have retained work, won a series of significant new contracts in 2009 and extended our order book.

"We are very confident in our ability to continue our growth trajectory in 2010 and beyond and we are working hard across all of our operations to achieve this.”

PSN’s strategy is to enhance the performance and extend the life of energy assets around the world, from engineering and construction, to operations, maintenance and decommissioning.   The Company’s success in achieving this is attributable to PSN’s staff as well as the seven core values which provide a framework which guides the way that we work and thereby achieve the best results for the Company and its customers. These core values are as follows:

Health and Safety
PSN is relentless in its approach to health and safety. The Company has proprietary systems which monitor and rank its health and safety standards across all of its projects worldwide and this enables the senior management to take quick action and apply resources to bolster performance where it is needed.

People
In a service business, people and the range of skills they offer are the company’s lifeblood. PSN focuses on employing and retaining the very best people and has continued to employ people through the recession including at graduate trainee level.  PSN continues to win awards for its people management capabilities and this year positioned 79th in the Sunday Times Best Companies to work for in the UK; and one of Atlantic Canada’s top 25 employers by Macleans Magazine and Eluta.ca. 
 
In May, PSN appointed Charles Mackay as its Chairman. Charles spent his early career at BP and Mckinsey before developing an exceptional international career in industry including board level roles at Chloride Group, British Airways, HSBC and a CEO role at Inchcape.

Localisation
PSN understands that sustaining international operations also means investing in the communities in which we work.  This year the company’s Bangladesh Appeal has raised more than $200,000 to build a multi-purpose building which will be used as a school, adult training and community centre, and refuge in adverse weather. 
 
In Gurgaon, India, PSN funded the development of a new orphanage. The Ujwal Niketan Trust has provided shelter for orphaned and homeless children for the past 15 years.  Until recently, more than 50 young people used what were often overcrowded facilities.   The new facility includes three new dormitories and a new kitchen and has been built by PSN and Cairn India staff on donated land.

Innovation
PSN is committed to innovation as a way to deliver even better solutions and results for its customers. This year one of the Company’s employees developed a new technique to improve the safety of offshore platform “blast walls”, something which will save many customers both time and money. In addition PSN won a cHeRries award for best employee recruitment and retention, which was in major part due to the Company’s innovative approach in these areas.

Relationships
PSN has always strived to develop excellent working relationships across the stakeholders in its business. In 2009, the development of strong relationships has contributed to the Company winning more than 50 new contracts and contract extensions involving customers such as BP, Shell, ExxonMobil, Agip KCO, Dynamic SPN and Lundin Petroleum.  PSN’s order book is currently valued at $2.4 billion with contracts in place to 2014.

Financial Responsibility
This year has seen an erratic and difficult financial climate, with dramatic swings in the price of oil. There have been significant challenges in many countries around PSN’s network but the Company has held firm and the Company’s business model remains steady, whether the oil price rises or falls, because both scenarios create opportunities. Whilst delivering its commitment to their supply chain, PSN’s cash in bank position reflects a strong focus on effective cash management.

Integrity
PSN believes that integrity in all matters creates a sustainable business environment in which employees want and are proud to work. Even in these very competitive times, the Company has maintained its stance to decline opportunities that do not align with its core values and corporate governance.

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