S&P downgrades Petrofac

Standard & Poor’s said it lowered the long-term corporate credit rating on Petrofac Ltd. to BBB- from BBB, along with its short-term corporate credit to A-3 from A-2.

The outlook is stable.

The downgrades reflect that weaker demand and a more competitive industry environment are likely to lead to lower margins and profitability in the coming years compared to the previous base-case scenario, S&P said.

Management’s decision to focus on core engineering and construction operations will lead to a less diversified portfolio, the agency said.

But the refocus on core businesses also limits the risk of future losses, S&P added.

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