Lamprell , a leading provider of specialist engineering services to the international oil & gas and renewable industry based in the UAE, announces its Interim Results for the six month period ended 30 June 2011.
H1 2011 FINANCIAL RESULTS
Revenue: US$ 383.6 million up 102.6% (H1 2010: US$ 189.3 million)
Adjusted operating profit: US$ 30.1 million up 45.4%* (H1 2010: US$ 20.7 million**)
Adjusted net profit: US$ 27.0 million up 39.9%* (H1 2010: US$ 19.3 million**)
Adjusted EPS (fully diluted): 12.41 cents up 40.2% (H1 2010: 8.85 cents**)
Proposed interim dividend: 4.00 cents (2.44 pence) per ordinary share (H1 2010: 3.50 cents**)
Successful completion of rights issue raising gross proceeds of US$ 226 million Cash and bank balances, including rights issue proceeds, as at 30 June 2011 of US$ 357 million (31 December 2010: US$ 210 million)
Order book as at 31 July 2011 of US$ 869 million (March 2011: US$ 1,090 million)
* For the current six-month period stated before reflecting exceptional charges for various legal and professional charges amounting to US$ 8.4 million (H1 2010: US$ nil) incurred in connection with the acquisition in July 2011 by Lamprell plc of all of the issued share capital of Maritime Industrial Services Co. Ltd. Inc.
** The trading results in 2010 reflect the underlying results for the period before a one-off gain of net US$ 20.4 million related to the cancellation of a contract, amounting to US$ 23.9 million, net of additional provisions arising as a result of the one-off gain, amounting to US$ 3.5 million. The comparative figures for earnings per ordinary share and dividends per ordinary share have been restated for the bonus element of the June 2011 rights issue. The adjustment factor has been calculated by dividing the share price immediately before the shares were quoted ex-rights (351.3p) with the theoretical ex-rights price (323.77p), giving an adjustment factor of 1.085.
H1 2011 STATUTORY RESULTS
The statutory results for the six-month period (after reflecting the exceptional charges noted above) are as follows: Operating profit: US$ 21.6 million down 47.4% (H1 2010: US$ 41.1 million) Net profit: US$ 18.6 million down 53.1% (H1 2010: US$ 39.7 million) EPS (fully diluted): 8.55 cents down 53.1% (H1 2010: 18.23 cents)
H1 2011 OPERATIONAL HIGHLIGHTS AND MAJOR EPC PROJECTS
A total of 26 jack up rigs have been worked upon at the Company‟s Hamriyah and Sharjah facilities during the first six months of 2011
The Company has achieved a 2011 lost time injury frequency rate per million man-hours of 0.18, compared to the construction industry average of 2.83
Significant savings continue to be realised from the Company‟s procurement and supply chain initiatives
The Company’s Enterprise Resource Planning system is on schedule to be operational in Q4 2011
A further 40,000 m2 plot has been procured on a long lease in Hamriyah, adjacent to our existing facilities
The Company’s capital investment programme has continued both at the Hamriyah and Jebel Ali facilities
In May 2011 an offer was made by the Company‟s wholly owned subsidiary, Lamprell Investment Holdings Limited (“LIH”) for Maritime Industrial Services Co.Ltd.Inc. (“MIS”) for NOK 38 per share, valuing MIS at NOK 1,831 million (£203.8 million; US$ 335 million)
The offer for MIS subsequently completed in July 2011, with LIH acquiring over 99% of the issued share capital of MIS
The acquisition has added 375,000 m2 of yard capacity and 400m of quayside, with the enlarged group now benefitting from 925,318 m2 of yard space and 2.2 km of quayside
The Company has consolidated its position as a regional leader in the rig market for both refurbishment and new build activity
The acquisition enhances Lamprell’s in-house engineering capabilities, with a combined 1250 engineering staff in the enlarged group, and has increased the overall headcount by 3,710, creating a total workforce of approximately 13,000 people
The combination of Lamprell and MIS enables the enlarged group to achieve cost and revenue synergies between these two highly complementary businesses
NEW CONTRACT AWARDS
Lamprell has secured new contract awards in H1 amounting to US$ 316 million. These include:
the contract award from Greatship Global Energy Services Pte. Ltd (“Greatship”), Singapore, announced on 22 February 2011. This contract is to construct a LeTourneau S116E jack up drilling rig for delivery in Q4 2012. Engineering and Procurement activities are well underway.
the US$ 41 million contract with Weatherford Drilling International (BVI) Ltd. (“Weatherford”), announced on 30 March 2011, for the engineering, construction and delivery of two 3000 HP land drilling rigs. Delivery of the rigs is scheduled for Q1 2012, and construction is underway at our Hamriyah facility.
US$ 57 million jackup rig upgrade and refurbishment contract awards, as announced on 3 May 2011, from multiple clients and across the whole range of refurbishment services offered by the Group.
Commenting on the half year results Nigel McCue, Chief Executive Officer, Lamprell said:
“The first six months of 2011 have been encouraging for the Group. In February we announced the award by Greatship of a new contract to build a LeTourneau S116E jackup rig. This was followed, in March, with the announcement of a major contract with Weatherford for our Oilfield Engineering Services business. In addition we have remained active with rig upgrade and refurbishment projects.
It is particularly pleasing to note the strong health and safety performance of our operations, with lost a time injury frequency in the first half significantly below the industry average. This continues, nevertheless, to be an area of focus for the Group.
The acquisition of MIS, completed in July, is a transformational step for the Group. The complementary businesses, expanded regional footprint, and enhanced capacity, resources and expertise that the acquisition offers positions the business well for profitable growth. I take this opportunity to welcome both new customers and colleagues to the Lamprell Group and look forward to the exciting opportunities that lie ahead for the enlarged business.
Market conditions remain encouraging and the Group enjoys both a healthy order book, at US$ 869 million, and a strong bid pipeline at US$ 4.7 billion. As such the Board is confident of the prospects for the business, whilst remaining vigilant with regard to the risks posed by the volatile global economic climate.”
Source:Lamprell, August 30, 2011;