16 Jan 2020 07:00
16 January 2020
LAMPRELL PLC("Lamprell" and with its subsidiaries the "Group")
PRE-CLOSE TRADING UPDATE
Lamprell announces the following update on its performance for 2019 and an update on its current trading and outlook ahead of publication of its 2019 financial results on 26 March 2020.
Operational highlights
Year end TRIR for the Group was 0.19; an exemplary safety outcome given the rapid ramping up of activities in the yards during the year.
The Moray East project is progressing well, with an excellent safety performance and within the budget, benefitting from the incremental investment in yard infrastructure in 2019. We have now commenced the upending of jackets and anticipate to start delivering to our client at the quayside in Hamriyah at the end of Q1, 2020.
Commercial settlement negotiations on the East Anglia One project continue with ScottishPower Renewables.
Our services businesses, including the rig refurbishment segment, continue to provide strong revenue flows in a challenging market for major projects. In 2019 we refurbished 13 rigs.
Financial position and outlook
Subject to audit, we anticipate 2019 revenue to be USD 276 million; at the bottom end of the previously announced guidance range.
Net cash has reduced to USD 41.5 million primarily as a result of the EA1 settlement slipping into 2020. Backlog currently stands at USD 466 million (30 June 2019: 441 million). The bid pipeline remains in line with 1H 2019, at USD 6.2 billion.
The Company has secured an extension to its debt facility until April 2020 as we continue to negotiate a new facility, as well as considering other debt options, for future working capital requirements.
Further, the Group continues to review its operational footprint in order to achieve substantial cost reductions and improve efficiencies whilst maintaining its capacity to deliver major projects in both the renewables and oil and gas sectors. A number of self-help measures have been identified for the medium term with an anticipated reduction in overhead of a minimum of 20% in 2020.
Major project flow in the oil and gas segment continues to be slow, but we are encouraged by the signs of progress in the region, which we believe will lead to wider sector recovery. 2020 revenues are expected to be in the range USD 350-450 million.
Lamprell will announce its full year 2019 financial results on 26 March 2020. Lamprell will hold its annual general meeting on 3 June 2020.
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Notes to editors
Lamprell PLC, based in the United Arab Emirates ("UAE") and with over 40 years' experience, is a leading provider of fabrication, engineering and contracting services to the offshore and onshore oil & gas and renewable energy industries. The Group has established leading market positions in the fabrication of shallow-water drilling jackup rigs, liftboats, land rigs, and rig refurbishment projects, and it also has an international reputation for building complex offshore and onshore process modules and fixed platforms.
Lamprell employs around 5,000 people across multiple facilities, with its primary facilities located in Hamriyah, Sharjah and Jebel Ali, all of which are in the UAE. In addition, the Group has facilities in Saudi Arabia (through a joint venture agreement). Combined, the Group's facilities cover approximately 828,000 m2 with 1.6 km of quayside.
Lamprell is listed on the London Stock Exchange (symbol "LAM").