29 Jun 2015 07:00
29 June 2015
LAMPRELL PLC("Lamprell" or "Company" and with its subsidiaries the "Group")
PRE-CLOSE TRADING UPDATE
Lamprell (ticker: LAM), a leading provider of fabrication, engineering and contracting services to the onshore and offshore oil & gas and renewable energy industries, issues the following pre-close trading update for the period from 1 January 2015 to date.
The Group is on track to deliver results for 2015 in-line with previous guidance. The Group has continued to see strong operational and financial performance in 2015 with the delivery of three major projects during the first half of the year. The measures to improve business efficiencies and reduce overheads across the Group are moving ahead as planned and all ongoing major projects are progressing well. There are currently six jackup rigs under construction in the Hamriyah facility and this will increase to seven concurrent rig construction projects in 2H2015. The piperack modules construction project for Petrofac, which is being undertaken in our Jebel Ali facility, is progressing well with initial modules to be delivered later this year.
Following the announcement on 2 December 2014 and satisfaction of the conditions, the Group completed the disposal of one of its smaller non-core service businesses, Litwin PEL LLC, in April.
In April, Lamprell announced the award by National Drilling Company for another new build jackup rig, the ninth in a series of such rigs. NDC has further options for Lamprell to build up to an additional two jackup rigs of the same design, which run to 3Q 2015. In addition, the Group continued to see demand for smaller projects in other core markets. Among these, the Group secured an order for five additional piperacks and one module for an existing client and a contract award for suction caps and buoyancy tanks from a new client. Both the rig refurbishment and the land rig services business units have seen steady starts to the year with several awards from new and existing clients.
As anticipated, we have seen customers delaying some project sanctions for discretionary capital spend but Lamprell's bidding pipeline remains strong amid the challenging market conditions as a result of its high standards of quality and safety, competitive pricing and market leading operational performance. The Group's focus remains firmly on the conversion of a range of substantial bidding opportunities in the coming months. A degree of uncertainty remains as to the impact of the market environment on the sector.
With the solid start to the year, the Company expects that the full-year financial performance will be in line with previous guidance. As previously indicated, the Group's results for 2015 are expected to be heavily weighted towards the second half of the year reflecting the phasing of project deliveries, with a number of new major projects ramping up during the second half of the year.
James Moffat, Chief Executive Officer, Lamprell, said:
"We expected that 2015 was going to be a challenging year but we have made good progress during the first half of the year, both in terms of delivering projects to clients as promised and implementing our efficiency and productivity programme. We have proven our ability to win new work in a challenging market environment and our bidding pipeline remains strong. We will continue to focus on maintaining our competitive position in the sector and remain confident of our ability to win our share of new projects."
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