LONDON (Alliance News) - Lamprell PLC said Thursday it swung to an interim loss on higher cost of sales and drop in revenue, as it expects to return to revenue growth in 2019.
For the six months ended June, the oil rig maker recorded a pretax loss of USD20.9 million from a profit of USD1.2 million the year prior. This was after revenue fell 2.6% to USD155.1 million from USD159.2 million the year before.
Profit performance was primarily hurt by a sharp rise in cost of sales. Cost of sales jumped to USD147.9 million from USD138.5 million the year prior.
"The business has performed in line with our expectations over the first six months of this year," Lamprell Chief Executive Officer Christopher McDonald said. "Although we are facing very low activity levels at our yards following the completion of our major projects, we are encouraged by the increasing optimism in the industry as evidenced by the improvements in our bid pipeline.
"During this period, we have taken further steps to build our capabilities, to underpin future bids and project execution," McDonald added. "Progress with our strategic initiatives has allowed us to reach preferred bidder status on opportunities of approximately USD500 million, subject to client final investment decisions, and we firmly believe that Lamprell will return to growth in 2019."
Lamprell guided for revenue of between USD225 million and USD250 million for 2018, with USD225 million already covered. For 2019, the firm expects revenue to grow to between USD250 million and USD400 million.
In 2017, Lamprell generated a USD97.9 million pretax loss on revenue of USD370.4 million.
Shares in Lamprell were 6.7% higher at 68.60 pence on Thursday.