UAE oilfield services firm Lamprell has reported a net first half loss of $47.1 million on revenues of $528.1 million, following a run of profit warnings since May.
EBITDA decreased to negative $24.3 million from $25.2 million in H1 2011. Lamprell posted a first half profit of $18.6 million in H1 last year. The board previously estimated Lamprell’s first half losses would be $45 million, and it is sticking with a full year estimated loss of between $12 and $17 million.
The bulk of the net loss has come from the company’s Windcarrier 1 and 2 projects, which together incurred losses of $46.2 million. Lamprell also blamed delays in key specialised supplier equipment deliveries for new build jackup projects and the slippage in the timing of expected new project awards.
The company experienced “significant supply chain delays relating to major components for its new build jackup projects in Hamriyah, resulting in the underutilisation of resources and reduced productivity.” The modular assembly of a jackup outside the UAE is also delayed.
Following a string of profit warnings which have seen the company’s share price collapse 74% in the last six months, Lamprell has suspended its interim dividend. Shares are trading down 1.67% on the day to 88.5p at the time of writing.
"These results are undoubtedly a disappointment to the Board and our Shareholders,” CEO Nigel McCue said. “After an extended period of sustained growth and profitability, the performance in the 6 month period to 30 June 2012 comes as a setback to the group.”
Lamprell had to secure waivers to its mid-year banking covenants in respect of part of its debt, and the company says will breach its banking covenants at the end of the year if they are not changed.
The firm is seeking to renegotiate its debt terms on a long term basis, which the boards is confident will be agreed. Net finance costs for the period rose $10 million on the year to $13 million.
Receivables fell $31.2 million to $637.6 million as Lamprell revealed that it received only 80% of the contract prices for its Hull 108 and Seajacks Zaratan projects on delivery.
However, revenue was significantly higher, up from $383.6 million last year to $528.1 million, signalling that the regional rig market in which Lamprell is a major remains bouyant.
McCue says he has the backing of the board, and is instituting changes to the business.
“Changes are being introduced across the business, which include management re-organisation and the implementation of improved processes, systems and controls,” McCue said.
The company has cut its net debt over the year from $101.7 million to $35.7 million, and maintains full year revenue guidance of $1.2 billion.
Nine new rig building projects are underway and the company and refurbished fifteen rigs at its Sharjah and Hamriyah facilities in the half.
McCue says the company’s order book remains valued at $1.5bn and bid activity remains positive across all of its businesses. The company is hoping to turn a corner on the basis of new rig building awards from Leighton Offshore, Seajacks and Abu Dhabi’s National Drilling Company.
