Lamprell Slumps After Second Cut to Profit Outlook: London Mover
Lamprell Plc (LAM), a U.K. oil and gas rig engineer, plunged to the lowest in three years after cutting its profit outlook for the second time in a month.
Lamprell fell 22 percent to 84.5 pence in London, the lowest since April 2009. The drop brings the total decline to about 77 percent since the beginning of May. On May 16, the Douglas, Isle of Man-based company fell the most since shares began trading in 2006 after an initial announcement on profits.
Lamprell said yesterday that its full-year profit margin on about $1.1 billion of revenue will be about 2.5 percent, compared with an estimate of 3.5 percent in May. Lamprell said it anticipates a loss of as much as $20 million in the first half before recovering in the second six months of the year.
A tighter global supply chain for specialized jackup rig components has caused delays, Lamprell said May 16. Lamprell also cited additional costs on wind-turbine installation vessels as well as an underemployed workforce. The supply of rig components should ease next year, it said last month.
“The discovery of additional costs brings into sharp focus management’s ability to manage lump sum projects,” said Nick Copeman, an analyst at Oriel Securities Ltd. in London. “As a result we highlight the potential for further cost overruns and we continue to assume 2013 earnings below management guidance.”
In a separate statement, Lamprell said that Chairman Jonathan Silver will step down and become deputy chairman. The search for a new chairman from outside the company is at an advanced stage, it said.
Equipment for the rigs Lamprell is currently constructing is being received in line with revised delivery schedules, the company said today.
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