UAE: Lamprell Issues Interim Management Statement
Lamprell, a leading provider of diversified engineering and contracting services to the onshore and offshore oil & gas and renewable energy industries, issues its latest Interim Management Statement in accordance with the EU Transparency Directive. This statement covers the period from 1 January 2013 to date, except as stated below.
The performance in the year to date has been in line with management expectations and, after the events of the previous year, they have made an encouraging start to 2013.
Overall, the Group’s financial position remains stable and working capital continues to be in a healthy position.
The Group’s immediate priority is to complete its discussions with its key lending banks in order to restructure its debt facilities and agree revised covenants on a long term basis. These discussions are now in an advanced stage and the Company remains on track to complete the process by 30 June 2013.
From an operating perspective, Lamprell is focussing on its core competencies and on maintaining high standards of safety and quality. The various major engineering, procurement and construction projects currently under way in each of Lamprell’s three large facilities in Hamriyah, Sharjah and Jebel Ali (all in the United Arab Emirates) are progressing according to plan.
Lamprell has a pre-eminent position and well-established track record in rig refurbishment projects in the Middle East. In the year to date, the Company has worked on a total of 11 jackup rigs, two of them in their Hamriyah facility and nine in their Sharjah facility, covering the full range of its repair, upgrade and refurbishment services.
In February 2013, a new contract was awarded to Lamprell by the Jindal group, a key existing customer for the Group, for the construction and delivery of a LeTourneau designed, self-elevating Mobile Offshore Drilling Platform of a Super 116E (Enhanced) Class design. The contract also includes an option for Jindal to order a second jackup rig.
Also in February 2013, Lamprell successfully delivered the wind turbine installation vessel, Windcarrier 2 “Bold Tern” to the client, Fred Olsen.
Their safety statistics for the year to date continue to show improvements on those for 2012. The Group will strive to build on those improvements throughout the rest of 2013 and will provide details at the time of announcement of the 1H financial statements.
There have been key changes to the management team with James Moffat joining as the new Chief Executive Officer (CEO) on 1 March 2013 and with Frank Nelson being confirmed as Chief Financial Officer in late March.
Mr Moffat and Mr Nelson have both been appointed as executive directors on the Board. Peter Whitbread (the former interim CEO) continues on the Board in an executive role. The Group has also recruited Niall O’Connell as the new VP Projects in order to strengthen the Group’s project management structure.
The Board has progressed well with the recent appointments of Michael Press, John Malcolm and Ellis Armstrong as new independent Non-executive Directors effective as from 27 May 2013. As announced previously, Deena Mattar, Colin Goodall and Jonathan Silver have decided to retire from the Board of the Company effective from the end of the upcoming Annual General Meeting.
In late March, the Company confirmed that it had concluded a settlement with the Financial Services Authority (“FSA”) in relation to the FSA’s investigation into the Company’s handling of inside information, as previously announced. The Company made provision for the settlement in the 2012 accounts.
The Group maintains a substantial order book extending to Q1 2015 which at the end of April 2013 was US$1.2 billion. The Group’s bid pipeline at the end of April was in the order of US$4 billion, which is viewed positively against the backdrop of a robust industry landscape.
In light of the above, the Board believes that the Company is well placed to achieve its primary goal of refocusing on Lamprell’s core business and accordingly the Board reiterates its earlier guidance for 2013. In the longer term, this will enable the Group to develop its competitive advantage which historically has been founded on high quality of workmanship and timely execution for those types of projects.
Press release, May 17, 2013; Image: lamprell