RE: Waiting for that news..22 Jul 2020 08:07
RNS Number : 7323T
Lamprell plc
22 July 2020
22 July 2020
LAMPRELL PLC
("Lamprell" and with its subsidiaries the "Group")
TRADING UPDATE
Lamprell announces the following update on its performance in the year to date.
· Strong operational performance as we continue to safely deliver projects for all of our customers
· EBITDA for H1 broadly breakeven despite headwinds of COVID-19 and low oil prices
· Net cash increased to USD 71.4 million at 30 June 2020 from USD 42.5 million at 31 Dec 2019
· Backlog increased to USD 580 million at 30 June 2020 from USD 470 million at 31 Dec 2019
· Our strategic growth objectives further progressed by:
o securing our third offshore wind project in the fast-growing renewables segment
o advancing our digital aspirations in collaboration with our partner Injazat
o submitting a number of proposals for Saudi Aramco's LTA during the period
Operational update
Despite the wide-ranging effects of COVID-19, we are pleased to report robust operational progress on all our current projects. Both the IMI rigs and Moray East projects are progressing well and in line with our expectations. We have successfully completed the engineering phase on the IMI rigs. We have moved to the next stage of the project and are now setting up the Hamriyah yard for fabrication and construction, and remain on track to deliver in 2022. On the Moray East contract, we have now delivered 32 out of 48 jackets to the client at our quayside in Hamriyah.
Two new and noteworthy projects have been added to our backlog since the beginning of the year, namely the engineering, procurement, installation and commissioning contract for the Mahani gas field in Sharjah and the 30-jacket project for the Seagreen windfarm, our third major project in the renewables market. Both projects commenced with immediate effect and are progressing well and in line with expectation through the early stages with initial steel deliveries already on site.
As previously announced, the Group took swift and decisive action at the onset of the COVID-19 pandemic. These measures were aimed at protecting the health and wellbeing of our employees, de-risking our supply chain, ensuring continued progress of ongoing projects, and achieving a significant reduction of our cost base to protect liquidity.
COVID-19-related cost savings, which are largely associated with a 25% reduction in fees, salaries and allowances for the Board, senior management and professional staff for the initial period of April through to September 2020, are expected to generate a USD 10 million reduction in costs in 2020.
Further to this, we remain on track to deliver a USD 24 million reduction in overheads as a result of our operational restructuring announced earlier this year, with approximately USD 20 million reduction in cash overhead. Group cost base in 2020 is the
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