21st Mar 2019 09:34
LONDON (Alliance News) - Lamprell PLC on Thursday reported a sharp drop in annual revenue, though it has a "significantly improved" backlog of work.
Revenue for 2018 was USD234.1 million, 37% lower year-on-year from USD370.4 million. Revenue has now fallen for two years in row. In 2016, the energy industry construction firm had booked revenue of just over USD700 million.
In 2017, revenue was hurt by major issues with the East Anglia One wind farm project, while in 2018, Lamprell said it has been hindered by continued low levels of activity. East Anglia One is now 99% complete, Lamprell said Thursday.
However, looking to 2019, Lamprell has guided for revenue to improve to between USD250 million and USD400 million, while its 2018-end backlog was USD540.0 million from USD61.7 million year-on-year.
United Arab Emirates-based Lamprell managed to reduce its pretax loss to USD69.5 million in 2018 from USD97.9 million in 2017, mainly due to a decline in costs.
The firm said the downturn in the oil and gas industry has shown Lamprell's reliance on one source of revenue, with its main revenue source "inaccessible" due to the current dearth of capital investment in the sector.
In 2018, the firm thus tried to strengthen its Saudi Arabian presence, a region with a "clear commitment" to investing in major oil and gas projects.
"2018 was marked by further volatility in the oil and gas industry and by the ongoing challenges in the East Anglia One project, both of which impacted our profitability for the year," said Non-Executive Chair John Malcolm.
"Against this backdrop I am pleased to report significant strategic progress for Lamprell, which will help diversify our exposure away from a single source of revenue and secure solid, commercially strong prospects in years to come."
"As we deliver our strategy, we continue to focus on risk management throughout the business to ensure current and future opportunities help us return to profitability in the medium term," Malcolm added.
On the financing side, Lamprell is in talks over a new debt facility, which should be signed in the second quarter of 2019, which will help strengthen the balance sheet.
Looking ahead, focus in 2019 will be on maintaining the backlog of work while continuing to ensure costs and cash management are well controlled, the company said.
Shares were down 1.8% Thursday morning at a price of 54.00 pence each.
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