26th Aug 2016 16:59
LONDON (Alliance News) - Lamprell PLC Friday warned its profit and revenue will be hit as it inked an agreement to settle all claims in relation to the late delivery of a rig to Ensco PLC, which it has now successfully delivered.
This settlement agreement comprises a deduction of USD25 million from the final milestone payment in respect of late delivery. Additionally, Lamprell will provide additional services for the 'Ensco 140 and 141' rigs, including temporary storage and the grant of an extended warranty for the jacking equipment supplied.
As a result of this, Lamprell said its 2016 profit will be reduced by around USD35 million, and revenue will be reduced by USD25 million.
The company said that further guidance for its financial performance will be provided at its interim results September 22.
Lamprell attributed the late delivery of the rig to failures in the jacking equipment supplied by the original equipment manufacturer Cameron LeTourneau.
"Lamprell has successfully implemented a solution for this issue on the 'Ensco 140' rig and the group expects to deliver the other six projects as planned. Lamprell's board is fully committed to recovering the remedial costs arising from the technical defects in the jacking equipment from Cameron as well as seeking compensation from Cameron," the company said in a statement.
Shares in Lamprell closed down 0.7% at 68.25 pence Friday.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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