UAE oil and gas engineering group Lamprell has smashed through the billion dollar barrier in its preliminary results for 2011, though an annual decline in pre-tax profit has prompted the company to trim its dividend.
Revenues surged by over 127% to $1.15 billion from $503.8 million a year ago. The Company has a record bid pipeline which at the end of February 2012 amounted to US$ 5.2 billion.
For fiscal 2011, pre-tax profit at the 14,000 strong firm declined to $63.48 million from last year’s $65.23 million, despite adjusted net profit finishing 2011 at $73.8 million, up 10.8% on 2010.
The company booked a profit knock of $14.3 million in October from further completion costs for wind farm installation vessel projects.
Gross profit increased by 66.8% to $ 132.9 million (2010: $ 79.7 million), resulting in a gross margin of 11.6% (2010: 15.8%), with the declining margin attributable to the wind farm vessel work. As a result the company proposed a final dividend of $0.08 ps, down from $0.095 ps a year ago.
The firm acquired engineering services firm and yard neighbours MIS in 2011, diversifying the group’s revenue streams and giving the group improved access to a range of Middle East markets. The group sees its new engineering and construction offering as a key strategic focus for 2012.
Lamprell also opened a new state-of the art yard and quay in Hamriyah, Sharjah, where work for key customers such as Abu Dhabi’s NPCC is well advanced.
2011 was also a strong year for orders. Lamprell recorded a record order book totaling $1.25 billion at the end of the year, with $489 million coming from new customers and $726 million of repeat business.
Saudi Arabia is primed to be particularly promising for the group, as the kingdom launches a fresh bout of drilling activity to shore up it production capacity and tap for gas.
“2011 was a very positive year for the Company, with contract awards totaling $1.1 billion together with a backlog of $1.2 billion at the year-end,” commented Nigel McCue, CEO of Lamprell. “The transformational acquisition of Maritime Industrial Services Co. Ltd. Inc. significantly contributed to consolidating our position as a market leader in the provision of contracting products and services in the oil & gas and renewables industry together with increasing our reach into new regional markets. Ongoing strength in the oil price has also helped to bolster a record bid pipeline and we ended the year with unprecedented levels of enquiries and bid activity.”
“There remains widespread uncertainty regarding the macro economic climate, although we have seen negligible impact on our business,” continued McCue. “Continued strength in the oil price has ensured that operator activity and investment remains high, and sentiment throughout the industry supply chain is positive. However, we can never be complacent about this situation given the prevailing macro-economic issues and we continue to keep a close watch on our costs and ability to remain flexible throughout the business.”
