Lamprell slides as it warns on order delays

Suzie Neuwirth
LAMPRELL’S share price plunged 6.7 per cent yesterday, after the rig maker warned that revenues would be lower this year and next year due to delays in new orders.

The London-listed company reported a $36.4m (£22m) profit in 2013, recovering after a challenging 2012 when it fell into $111m losses. Lamprell’s expansion into wind turbine vessels was hit by operational issues and led to a series of profit warnings that year.

Full-year revenue edged up slightly to $1.1bn, up from $1.03bn in 2012.

“In 2013 the group made good progress on its path to recovery and we are aiming to build on this in 2014,” said chief executive Jim Moffat.

“The order intake during 2013 was lower than in previous years and accordingly revenues for 2014 and 2015 are expected to be slightly lower than 2013 while the group rebuilds its order book.”

Challenges of turning around the business led to a fall in its order backlog to $900m at the end of 2013, with a bid pipeline of around $4.7bn. The UAE-based firm said its top priority is converting its increased bid pipeline into contract wins.

“Good project execution and cost reduction were the key drivers of Lamprell’s recovery in 2013,” said Neill Morton, analyst at Investec. “However, delays in new orders amid tough competition from Asian players have meant that, while current year forecasts look achievable, there is currently downside risk to 2015 estimates.”