Lamprell (ticker: LAM), a leading provider of diversified engineering and contracting services to the onshore and offshore oil & gas and renewable energy industries, today announces a trading update ahead of its results for the year ended 31 December 2013.
Summary and outlook
In light of continued good progress made by the Group, the Company expects performance for the year ending 31 December 2013 to be ahead of our previous expectations. As we move into 2014, we remain focussed on the conversion of our pipeline of opportunities into contract wins and on delivering sustainable growth. While market conditions remain competitive and delays in project awards remain a feature of the industry at the present time, we are in active dialogue with a number of prospective clients for new orders and the level of our tendering remains positive.
As of 31 December 2013, the Group's order book was valued at US$0.9 billion (31 December 2012: US$1.2 billion) and the bid pipeline, reflecting the broad range of bids and prospects that are currently being pursued, at approximately US$4.7 billion (31 December 2012: US$ 4.0 billion).
We have made significant improvements to our project execution throughout 2013 and this has continued during the last few months. All projects are progressing well, on budget, and are expected to achieve timely deliveries.
The Group's primary activities at present relate to the construction of eight new build jackup rigs in our Hamriyah facility, the new major rig conversion project at our facility in Sharjah and the production, utilities and quarters deck project in our Jebel Ali yard.
Order intake during 2013 was lower than in previous years due to delays in project awards as stated above and the new management's focus on delivery of existing projects and re-positioning the business for a return toprofitability. However, we secured major orders from our existing clients including repeat orders from the Jindal
Group and the Greatship Group, the rig conversion of the MOS Frontier as well as a number of smaller contracts, notably in our land rig services business. The Group has a well established and proven track record in these areas, all of which form part of the Group's core competencies, and we are in dialogue with a number of prospective clients for new orders.
The Group's net cash position at the end of December 2013 was around US$180 million, significantly ahead ofour expectations. This came as a result of a combination of hitting project milestones early and the timing of
supplier payments. Consequently we are currently experiencing a stronger working capital position but we
anticipate that this will unwind in the coming months and the net cash position will trend downwards towards the end of the first quarter of 2014 in line with the normal project cycles.
Source: Lamprell plc
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