UAE-based rig maker Lamprell back into the black with $14.7m profit

The company swung into profit in the first half of the year, reversing losses incurred as it ventured from its core oil and gas business.

Men working in a Lamprell's shipyard in Jebel Ali. In its earnings statement, Lamprell reiterated its commitment to its core business - the construction and refurbishment of rigs, and offshore construShow more

The UAE-based rig maker Lamprell swung into profit in the first half of the year, reversing losses incurred as the company ventured from its core oil and gas business.

Lamprell recorded a profit of US$14.7 million on revenues of $521m. The first-half figure contrasted with a net loss of $110.5m for the full year in 2012, when delays and cost overruns during the construction of an offshore wind-turbines carrier cost the company dear.

"After the challenges of 2012, I am pleased to be able to report a return to profitability for the group," said James Moffat, Lamprell's chief executive.

In March, the London-listed company was fined £2.4m (Dh13.67m) by the United Kingdom's financial services regulator for not disclosing the risk of losses early enough. Lamprell had issued four profit warnings prior to the 2012 results.

Mr Moffat at the time pledged to bid more conservatively and with an emphasis on oil and gas projects.

"We have made significant changes to the business, allowing Lamprell to emerge strongly from the issues of 2012," he said yesterday.

Lamprell boasts an order book of $1.1 billion, a slight decrease on the $1.3bn of uncompleted projects on the books in the first quarter of the year. The bid pipeline grew by half a billion dollars to $4.6bn since the end of last year.

In its earnings statement, Lamprell reiterated its commitment to its core business - the construction and refurbishment of rigs, and offshore construction. The review of its non-core service businesses was under way, it added.

The company cautions that its performance next year may not match this year's, but said growth would return the following year.

In Lamprell's home market, the UAE, business in rigs and offshore oil and gas is brisk, as Abu Dhabi pursues an increase in oil production capacity from about 2.8 million barrels per day to 3.5 million bpd by 2017.

In trading in London yesterday afternoon, Lamprell's shares were up 8 pence, to 143 pence. Their 52-week range was 62p to 183p.