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 June 30th 2011.
H1 2011 financial results;
1. Revenue: USD 383.6 million up 102.6% (H1 2010: USD 189.3 million)
2. Adjusted operating profit: USD 30.1 million up 45.4% (H1 2010: USD 20.7 million)
3. Adjusted net profit: USD 27.0 million up 39.9% (H1 2010: USD 19.3 million)
4. Adjusted EPS (fully diluted): 12.41 cents up 40.2% (H1 2010: 8.85 cents)
5. Proposed interim dividend: 4.00 cents (2.44 pence) per ordinary share (H1 2010: 3.50 cents)
6. Successful completion of rights issue raising gross proceeds of USD 226 million.
7. Cash and bank balances including rights issue proceeds as at June 30th 2011 of USD 357 million (31 December 2010: US$ 210 million)
8. Order book as at July 31st 2011 of USD 869 million (March 2011: USD 1,090 million)
For the current six-month period stated before reflecting exceptional charges for various legal and professional charges amounting to USD 8.4 million (H1 2010: USD nil) incurred in connection with the acquisition in July 2011 by Lamprell plc of all of the issued share capital of Maritime Industrial Services Company Limited Inc.
The trading results in 2010 reflect the underlying results for the period before a one off gain of net USD 20.4 million related to the cancellation of a contract, amounting to USD 23.9 million, net of additional provisions arising as a result of the one off gain amounting to USD 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 with the theoretical ex rights price giving an adjustment factor of 1.085.
H1 2011 statutory results;
The statutory results for the 6 month period (after reflecting the exceptional charges noted above) are as follows:
1. Operating profit: USD 21.6 million down 47.4% (H1 2010: USD 41.1 million)
2. Net profit: USD 18.6 million down 53.1% (H1 2010: USD 39.7 million)
3. EPS (fully diluted): 8.55 cents down 53.1% (H1 2010: 18.23 cents)
H1 2011 operational highlights and major EPC projects;
1. A total of 26 jack up rigs have been worked upon at the Company's Hamriyah and Sharjah facilities during the first 6 months of 2011
2. 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.
3. Significant savings continue to be realized from the Company's procurement and supply chain initiatives.
4. The Company's Enterprise Resource Planning system is on schedule to be operational in Q4 2011.
5. A further 40,000 square meter plot has been procured on a long lease in Hamriyah, adjacent to our existing facilities.
6. The Company's capital investment program has continued both at the Hamriyah and Jebel Ali facilities.
Mis Acquisition;
1. In May 2011 an offer was made by the Company's wholly owned subsidiary, Lamprell Investment Holdings Limited for Maritime Industrial Services Company Limited Inc for NOK 38 per share valuing MIS at NOK 1,831 million.
2. The offer for MIS subsequently completed in July 2011 with LIH acquiring over 99% of the issued share capital of MIS.
3. The acquisition has added 375,000 square meter of yard capacity and 400 meters of quayside with the enlarged group now benefitting from 925,318 square meters of yard space and 2.2 kilometers of quayside
4. The Company has consolidated its position as a regional leader in the rig market for both refurbishment and new build activity.
5. 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.
6. 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 USD 316 million. These include:
1. The contract award from Greatship Global Energy Services Pte Limited, Singapore announced on February 22nd 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.
2. The USD 41 million contract with Weatherford Drilling International Limited announced on March 30th 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.
3. USD 57 million jackup rig upgrade and refurbishment contract awards, as announced on May 3rd 2011 from multiple clients and across the whole range of refurbishment services offered by the Group.
Mr Nigel McCue CEO of Lamprell said that 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 USD 869 million and a strong bid pipeline at USD 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.
