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Company Lamprell plc
TIDM LAM
Headline

Final Results

Released 07:00 21-Mar-2013
Number 5093A07

RNS Number : 5093A
Lamprell plc
21 March 2013
 



 

21 March 2013

 

LAMPRELL PLC
("Lamprell" and with its subsidiaries the "Group")

 

2012 FINANCIAL RESULTS

 

 

Lamprell (ticker: LAM), a leading provider of diversified engineering and contracting services to the onshore and offshore oil & gas and renewable energy industries, announces its Financial Results for the year ended 31 December 2012.

 

2012 FINANCIAL RESULTS


2012

2011

(US$ million, unless stated)



Revenue

1,045.5

1,147.9

Operating (loss)/profit

(84.5)

90.2

(Loss)/profit before income tax and before exceptional items

(105.0)

 

74.0

(Loss)/profit before income tax and after exceptional items

(109.7)

 

63.5

(Loss)/profit after income tax

(110.5)

63.3

Diluted (loss)/earnings per share (US Cents)

(42.4)

26.5

Net cash/(debt) as at 31 December

104.1

(101.7)

Dividend per share (US Cents)

Nil

8.00

 

Note, exceptional items during 2012 relate to a regulator's fine (US$ 3.7 million) and related legal expenses (US$ 1.0 million).  For the year 2011, they relate to the MIS acquisition costs (US$ 10.5 million)

 

2012 CORPORATE AND OPERATIONAL MATTERS

·     An exceptional year of challenges faced by the Group, including underperforming key contracts, deteriorating financial position and investigation by the FSA

·     Changes were made at the Board level and within the management structure to address these issues

·     Challenges successfully overcome or being addressed, including:

Two key underperforming projects have been delivered and others being addressed or on track

Stabilised financial position, refinancing progressing

Settlement of FSA investigation, as announced on 18 March

Review and upgrading of management systems ongoing

Renewed focus on core capabilities

·     Since 1 January 2012 to date, Lamprell delivered the following major projects:

four new build jackup rigs

two prototype wind farm installation vessels and one non-prototype wind farm installation vessel

two new build land rigs

numerous upgrade and refurbishment projects, relating both to jackup and land rigs

·     Contracts secured since the start of 2012 include the following:

Four new build jackups, with an option for a further one

Seajacks "Hydra" windfarm vessel

North Sea process modules

Multiple jackup and land rig refurbishment projects

·     Current backlog of US$ 1.3 billion, with bid pipeline approximately US$ 4.1 billion

·     Continued strong focus on safety with improvements made across the Group, resulting in several major projects being delivered without lost-time incident

 

UPDATE ON CURRENT MAJOR PROJECTS

·     Lamprell is constructing an additional four rigs for a key client, National Drilling Company (NDC), and construction on all four rigs is underway at the Group's Hamriyah facility in the United Arab Emirates. NDC rigs 3 and 4 are on track for delivery in Q1 and Q2 2014 respectively.  With regard to NDC rigs 5 and 6, first steel was cut for both rigs in early January 2013.  The Group is progressing the works on these two rigs in parallel in order to manage working capital more effectively.  NDC rigs 5 and 6 are scheduled for delivery in Q4 2014 and Q1 2015 respectively.

·     The first Caspian Sea rig was successfully loaded out in December 2012 in extremely challenging weather conditions. Work progresses as planned and the commissioning team has been mobilised for delivery in Q3 2013.  Keel laying on the second Caspian Sea rig has taken place and the rig is on track for delivery Q3 2014, as planned.  The project recently achieved one million manhours without lost-time incident (LTI).

·     Construction on the first jackup rig for the Jindal Group is progressing on schedule and, in February 2013, the project achieved an important milestone of two million manhours without LTI.  The expected delivery date is in Q4 2013.  The Company announced in late February 2013 that the Jindal Group had awarded Lamprell a new contract for one firm additional jackup rig plus an option for one more.  The engineering and procurement phase of that newly-awarded contract has commenced and construction will also take place at Lamprell's Hamriyah facility, with planned delivery being in Q1 2015.

·     Construction activities in connection with "Seajacks Hydra", a GustoMSC NG-2500X design self-elevating and self-propelled offshore wind turbine installation vessel, started during 2012 and keel laying took place in January 2013.  The project is currently in the construction phase with construction of the hull blocks in progress. The project is on track for delivery in Q2 2014.

·     Completion of the project for a wellhead deck and for the production, utilities and quarters (PUQ) deck to an international, North Sea operator is proceeding on schedule in the Group's Jebel Ali facility.  The wellhead deck is undergoing mechanical completion and will be commissioned in time for delivery in Q3 2013.  The PUQ deck is proceeding as planned with intended delivery in Q2 2014. The combined total manhours on the two projects now exceed 4.5 million and there have been zero LTIs, a major achievement.

 

John Kennedy, Non-executive Chairman for Lamprell, said:

"2012 was unquestionably the most challenging year in Lamprell's history.  After years of sustained growth and profitability, the Company experienced a number of significant, unexpected operational issues, which resulted in substantial financial losses and a refreshment of the management team.  We were forced to re-evaluate the projects that we wanted to pursue and we have made many significant changes to the business structure with a view to focus on our core capabilities. 

Nevertheless, it is important to re-affirm the underlying strength of the Company's franchise and its sustainable competitive advantages in the marketplace.  The Board expects 2013 to be a recovery year, with stable revenues as compared to 2012 and a gradual return to profitability during the year."

James Moffat, Chief Executive Officer for Lamprell, said:

"As I join Lamprell as its new Chief Executive, I see a business with an attractive regional footprint and significant potential, whose financial health was seriously undermined in 2012 by several, very serious issues.  Despite this, the Company managed to retain the trust of its clients and its leading market position and that is a testament to the fundamentals of this business and its historic ability to execute projects. Our current order book of US$ 1.3 billion and the bid pipeline of US$ 4.1 billion, together with Lamprell's strong, historic track record of delivery and continued commitment to quality, represent a solid foundation for the business to grow in the coming years.

HSE, in particular safety, has always been a core value for me.  Hence I am pleased to see that, despite the operational challenges faced by the Group in 2012 as well as the total number of manhours increasing significantly, Lamprell has maintained and in fact improved its strong safety track record."

 

- Ends -

 

 

Enquiries:

 

Lamprell plc

John Kennedy, Chairman

+44 (0) 207 920 2347

Frank Nelson, Chief Financial Officer

+971 (0) 4 803 9227

Ekaterina Alferova, Investor Relations

+44 (0) 7570 813428


M:Communications, London

 Patrick d'Ancona

 +44 (0) 207 920 2347

 Andrew Benbow

 +44 (0) 207 920 2344

 

 



Chairman's Statement

 

A Challenging Year for Lamprell

 

2012 was unquestionably the most challenging year in Lamprell's history.  After years of sustained growth and profitability, the Company experienced a number of significant operational and reporting issues, which resulted in substantial financial losses prompting the Board to make major changes to the way in which the business is structured and managed. 

 

At the time I took over as Lamprell's Non-executive Chairman in the middle of June 2012, the Company had already announced that there were significant operational difficulties and delays in delivery of the wind farm installation vessel Windcarrier 1 Brave Tern.  Unfortunately, as the summer progressed, it became clear that the scale of these issues was far greater than previously anticipated, and that it affected other key contracts, including notably the Windcarrier 2 Bold Tern and the Caspian Sea jack-up project.

 

On 3 October, the Board made the difficult but necessary decision to replace the entire senior management team and directed the newly appointed, interim management team to re-assess Lamprell's business in light of the deteriorating financial position. At the same time the Board appointed PricewaterhouseCoopers to conduct an independent review of the financial performance of the underperforming projects. The results of this comprehensive assessment were announced on 19 November, revealing total projected losses far in excess of what had been previously anticipated or announced.  

 

Despite the disappointing update, the Board worked closely with the interim management team to address the problems facing the business as efficiently and effectively as possible. During the following months, we have made excellent progress in mitigating the losses from the underperforming key projects and stabilising the Group's financial position. With support from Lamprell's lenders, we also began the process of restructuring the Group's financial arrangements which is expected to be completed in Q2 2013.

 

In spite of the setbacks of 2012, the durability of our industrial franchise continues to prove strong and our clients, especially our existing clients, have continued to place their trust in our ability to perform to high standards. As a result, Lamprell has maintained its competitive position and support from its customers by winning new contracts with an aggregate value in excess of US$930 million during 2012.  Notably in our recent statement on 6 February 2013, we were pleased to announce that the Jindal Group had awarded a new contract to Lamprell for one confirmed, together with one optional, jack-up rig.

 

In another positive development, Lamprell signed a joint venture agreement for the fabrication, refurbishment and repair of land drilling rigs in Saudi Arabia, enhancing our strong presence in that market.  We plan to leverage on our long-term relationships with our Saudi partners and our well-established expertise in the land rig sector.

 

Board and Management Changes

 

It has been a very busy year with changes both at the Board and at the management levels, some planned and others required in response to the events of 2012. 

 

In October, Nigel McCue, Jon Cooper and Chris Hand stood down from their respective positions as Chief Executive Officer, Chief Financial Officer and Chief Operating Officer respectively. At the same time, Peter Whitbread, who had previously served as Lamprell's Chief Executive from 1992 to 2009, was appointed to the Board as Interim Chief Executive Officer. In November, Frank Nelson was appointed as Interim Chief Financial Officer. Their efforts have ensured a smooth transition of the stabilised business to the new management team led by James (Jim) Moffat, whose appointment as the new Chief Executive Officer was announced in early December. I am absolutely delighted that someone of Jim's expertise and calibre has agreed to join our team.  He assumed his responsibilities on 1 March 2013, and will bring the highest standards of leadership, engineering and project execution to Lamprell. 

 

It was also pleasing that, after stepping down from his interim CEO role, Peter Whitbread has agreed to stay on as an Director to support Jim and his team in rebuilding the business and positioning it for future success. 

 

Other Board changes in 2012 included the retirement of Richard Raynaut and resignation of Brian Frederick as Directors, and the appointment of Deena Mattar as a Non-executive Director with effect from 1 April 2012.  Jonathan Silver stepped down from the position of Chairman to become Deputy Chairman, followed closely by my appointment on 15 June as Non-executive Chairman.

 

Further board changes will be taking place during the next few months. As a result of the considerable time commitment required of the Non-executive Directors during the past year, Colin Goodall and Deena Mattar have informed the Board that they will not be standing for re-election at the forthcoming Annual General Meeting.  A search is underway for additional independent Non-executive Directors.

 

As a Board, it is our objective to deliver long-term, sustainable success for the benefit of all Lamprell's stakeholders. While there have been many changes at the most senior levels in the Company, I consider that the Board has reasserted its position to provide a clear direction and strong and effective leadership for the future of the business.

 

FSA Investigation

 

In November 2012, Lamprell announced an investigation by the Financial Services Authority ("FSA") into the Company's handling of inside information.  Having completed the investigation, the FSA imposed a fine of approximately US$3.7 million on Lamprell for failing in its obligations as a listed company to keep the market full informed of its deteriorating financial position during early 2012.

 

From early in 2012, Lamprell's financial performance began to deteriorate due to operational issues and to delays in completing key projects.  It became clear that the Company's systems did not allow management to assess fully the impact of these operational issues.  Lamprell was, therefore, unable to update the market in a timely manner as to its financial performance.  When the extent of the financial deterioration was recognised, the FSA concluded that Lamprell did not act sufficiently quickly to update the market or to prevent employees from continuing to deal in its shares once the inside information regarding the poor financial performance had been recognised.  The steps that the Company has taken to improve its systems and controls are set out in the Corporate Governance report.

 

Dividends

 

Given the post-tax losses in 2012, Lamprell will not pay a dividend for the year. We look into the future with optimism, and will review our dividend policy once the business returns to profitability.

 

Outlook

 

As a result of the events of 2012, the Company has been forced to re-evaluate its business structure and the projects that it wishes to pursue.  We have had to make many significant changes to the business, to return to our core activities, but it is important to re-affirm the underlying strength of the Company's franchise and its sustainable competitive advantages in the marketplace.  As previously mentioned, the continued and on-going support of our customers has been particularly heartening.  On behalf of all the employees and Directors of Lamprell, I would like to express our appreciation.

 

Despite continued global macroeconomic uncertainty, demand for our products and services remains strong in the midst of a robust and expansive oil and gas industry. In particular, we see a steady stream of new-build and refurbishment projects in our home market of the Middle East as well as increased activity in the North Sea.  In recent years there have been significant changes in our competitive landscape, in particular the entry of Asian players who can offer very competitive financial incentives to clients. However, we are confident that Lamprell's strong, historic track record of delivery and continued commitment to quality positions the Company well to benefit from continued growth in the oil and gas industry.  Our current order book of US$1.3 billion and the bid pipeline of US$4.1 billion collectively represent a solid foundation for the business to grow in the coming years.

 

In light of the above, I sincerely believe that Lamprell can look forward to 2013 and beyond with renewed confidence.  During 2013, we will be focusing on our traditional areas of strength, namely new-build jack-up rigs, rig refurbishment and offshore platform construction.   With the strong bidding activity across the business in these areas, we expect this year to show signs of stability returning with the first shoots of growth appearing towards the end of the year.

 

On behalf of the Board, I would like to thank all of Lamprell's stakeholders and in particular our employees for their continued trust and support during these challenging times. 

 

 

John Kennedy

Chairman of the Board

Lamprell plc

 

 



 

Chief Executive's Review

 

Peter Whitbread, Interim Chief Executive Officer, October 2012 - March 2013

 

Although our yards remained busy throughout 2012 and generated revenues for the year of US$1,045 million, the Group suffered a loss before tax and exceptionals of US$105 million as a result of a series of operational hurdles, the failure to appreciate certain project risk and project delays. The challenges that Lamprell experienced in 2012 led to major changes within the Company, including a complete change of leadership and a comprehensive review of our projects and operations. With a new management team in place and a number of improvements to our business processes underway, we are now confident that Lamprell is well-placed to overcome these challenges and leverage its leading market position to return to profitability.

 

2012 Challenges/Overview

 

Starting in mid-2012, Lamprell experienced significant delays on several of its largest projects, including the wind farm installation vessels Windcarrier 1 and 2 for Fred Olsen, as well as the jack-up rig that was built in modular form in the UAE and is being assembled at a facility in Astrakhan, Russia.  As the year progressed, it became clear that these delays would result in material financial losses. However, the previous management team struggled to quantify the losses or prevent the situation from deteriorating further.

 

As a result of the departure of the previous senior management team in October 2012, Lamprell's Board asked me to rejoin on an interim basis to assess the full extent of the issues facing the Company, and to help stabilise its operations while it recruited a new, permanent management team. With the Board's support, the interim management team conducted a comprehensive assessment of Lamprell's operations, with a primary focus on the key underperforming projects and their effect on the Group's financial position. The results of the assessment, published on 19 November, revealed a series of operational and financial issues contributing to major losses in 2012.

 

One of the cornerstones of Lamprell's success has always been its rigorous approach to project execution. Since my retirement as Lamprell's CEO in 2009, the Company's business has undergone significant change; over the past several years, the Company's operations have grown significantly as the Group has taken on a number of increasingly large and complex projects.  This has generated higher revenues but the growth came at a price as the Company's existing project management systems were unable to cope with these larger projects of a prototype nature.  This left Lamprell struggling to fulfill its commitments to its stakeholders.

 

Having established the scale of the problems and identified key areas of weakness, my team negotiated revised delivery schedules for the key underperforming projects still under construction, and fully focused its efforts on their completion under these new terms.  In spite of the financial setbacks arising from certain key projects, Lamprell continued to deliver major projects to a consistently high standard, including the first two new build jack-up rigs to NDC, as well as the Seajacks "Zaratan" and the Windcarrier 1 Brave Tern liftboats.  Most recently, and perhaps most significantly, the Group fulfilled its promises to deliver the Windcarrier 2 Bold Tern vessel to the client in mid-February 2013.  This only became possible as a result of improved project management and strict financial controls, as well as the dedication and commitment of the project team who worked tirelessly on this complex project.

 

New Contract Awards

 

The recent operating environment has been demanding, both because of the Company's internal issues which we are now resolving and also due to the increasingly competitive nature of the sectors in which the Company operates.  Nevertheless, the Company managed to maintain the support of its clients and was awarded more than US$930 million in new contract wins during 2012. This included various, major new build projects in both the oil and gas industry, such as two more fully-outfitted and equipped LeTourneau rigs for our key client, NDC, and the fabrication of two topsides and jackets for a new client, and the renewables sector where Seajacks awarded us a new contract for a fourth liftboat vessel, of a similar design as those already delivered to Seajacks. 

 

The rig refurbishment market for both the onshore and offshore segments remained positive in 2012, which allowed Lamprell to win multiple orders for jackup rig upgrade and refurbishment projects. This has historically been a keystone for our franchise and we continue to be the regional leader by market share for this type of business.

 

Saudi Arabia Joint Venture

 

In another positive development, in September 2012 Lamprell signed a joint venture agreement with Shoaibi Group, a Saudi industry and energy services provider, and Al Yusr Townsend and Bottum, a Saudi integrated logistical services provider, to form Lamprell Arabia Ltd. The joint venture, which will be based in the oil-rich Eastern province of Saudi Arabia, intends to establish a presence for fabrication, refurbishment and repair of land drilling rigs.  I am excited by the opportunities presented by the joint venture which builds on the Group's existing business in a country where we foresee extensive needs for such services, which are a core part of our offering.

 

Our People

 

Our employees are the foundation of our business. Their hard work over the past four decades has built Lamprell into the business we are proud of today, and their wellbeing is essential for the continued success of our company. Since my return to the business in October 2012, a primary focus has been to re-energise the workforce, with a view to improving morale and thereby increasing productivity.  These efforts have produced results such as delivery of the Windcarrier 2 vessel on the promised revised delivery date.

 

At the same time, we have been forced to take some tough decisions to control costs in the Group at a time when it was struggling financially.  This put additional pressure on our operations and has been a delicate balance to manage. However, once we re-established control over the key operational issues, we have been able to reassure our staff of the attractiveness of Lamprell as an employer.  Today, Lamprell employs over 11,000 staff.

 

Ongoing Changes and Outlook

 

In 2012 we encountered numerous operational and financial problems, which forced us to reassess how we run our business. The interim management team has introduced new initiatives aimed at strengthening Lamprell's project reporting systems, organisational structure, financial controls and risk management.  One such initiative was the introduction of a new organisational structure which prioritised project management and aligned project execution with the Group's reporting structures.

 

These initiatives will take some time to bed down into the business but, as I pass the mantle of leadership to the permanent CEO, James Moffat, I am proud of the genuine progress that we have made over the last six months and I believe that the outlook for our business remains strong for 2013 and beyond.

 

 

James Moffat, Chief Executive Officer since 1 March 2013

 

As I join Lamprell as its new Chief Executive, I see a business with an attractive regional footprint and significant potential where several, very serious issues undermined its financial health in 2012 and threatened its ability to win and execute work.  Despite this, the Company managed to retain the trust of its clients and its leading market position and that is a testament to the fundamentals of this business and its historic ability to execute projects.

 

HSE, in particular safety, has always been a core value for me.  Hence I was pleased to see that, despite the operational challenges faced by the Group in 2012 as well as increasing the total number of manhours worked to over 37 million, Lamprell maintained and in fact improved its strong safety track record.  The total recordable incident rate (TRIR) in 2012 declined by nearly 80% over 2011, having already improved by 58% in 2011 over the previous year. This is a significant achievement.

 

Given the nature of our business there are inherently significant health, safety and environment risks and despite our recent successes we must continue to improve.  To this end, I have already tasked the management to implement several new HSE strategic objectives and key initiatives such as personal HSE contracts and hazard identification, which I expect to deliver results during 2013.  Across the group, I will be driving a culture where HSE will be a key consideration in making everyday decisions, both at a corporate and at an individual level.

 

The interim management team has done a great deal to stabilise Lamprell's operations and financial position after the events of 2012. Our key priority this coming year is to implement and complete the initiatives introduced by them, in order to avoid similar issues in the future, and to position the Company for the next stage in its development. We will continue to improve operations by increasing focus on risk management, project execution and financial controls.

 

I would like to thank Peter and his team for their efforts during the challenging transition period, and I look forward to working closely with them to rebuild Lamprell's reputation for operational excellence and profitable growth. 

 



 

FINANCIAL REVIEW

Significant operational issues and delays on a number of Lamprell's large projects adversely affected the Group's financial performance in 2012, resulting in a loss before income tax and exceptional items for the year of US$ 105.0 million, as we anticipated in our announcement to shareholders in November 2012.

Results from operations

In 2012, Lamprell's Group total revenue was down on the previous year to US$ 1,045.5 million (2011: US$ 1,147.9 million). Revenue arises from various business streams with the majority generated from new build construction projects, which included 10 new build jack-up rigs, 4 liftboats for the offshore wind farm installation sector and 2 land rigs.  Revenue from new build fabrication projects across the Group decreased by 29% to US$ 560.0 million (2011: US$ 789.7 million).  

The reduction in new build revenue was driven primarily by the renewables segment, which saw a substantial reduction to US$ 66.4 million (2011: US$ 289.1 million).  This segment suffered not only from lower levels of activity but also from the Group's contractual obligations to pay liquidated damages for delays in delivery to a number of significant projects, in particular the Windcarrier 1 and Windcarrier 2 wind farm installation vessels which are deducted from the final value of the contract.

The revenues for the Company's new-build oil and gas segment, which comprises the fabrication and construction of offshore jack-up and land rigs, were broadly in line with the previous year, totalling US$ 493.6 million compared to US$ 500.6 million in 2011.  The small decline in revenues in this segment was a result of the Caspian Sea jack-up rig project where, as announced by the Company in November 2012, there were delays which deferred revenues for that project from 2012 to 2013.

The Group has historically performed well in the field of rig refurbishment (which includes both repair and maintenance as well as rig upgrades).  However the 2012 revenues for this segment were impacted by lower volumes following a strong performance experienced in 2011, resulting in US$ 176.9 million in revenue for the year (2011: US$ 191.0 million).

On a more positive note, the Group's offshore platform construction business saw significantly higher levels of revenue during the year following the award of two large projects.  Revenue in this segment increased from US$ 52.5 million in 2011 to US$ 179.7 million in 2012.  

Other revenue increased to US$ 128.9 million (2011: US$ 114.6 million) driven by additional revenue streams from the other businesses that were acquired in 2011 as part of the MIS group of companies.

Group's losses for 2012

Delays and cost overruns caused by operational issues on a number of major projects resulted in a gross loss of US$ 19.6 million for the year (2011: profit of US$ 132.9 million), and a corresponding negative gross margin of 1.9% (2011: positive 11.5%). The major components of this loss, which are in line with the Company's announcement to shareholders in November 2012, relate to the following key projects:

•     Windcarrier 1 "Brave Tern": US$ 36.3 million;

•     Windcarrier 2 "Bold Tern": US$ 32.5 million;

•     Seajacks "Zaratan" : US$ 7.1 million;

•     Caspian Sea jack up project: US$ 25.8 million;

•     Minor EPC projects: US$ 12.0 million;

The operating loss for the year before exceptional items and income tax was US$ 84.5 million (2011: profit of US$ 90.2 million before exceptional items) and includes marginally higher overhead costs resulting primarily from changes in the executive management team, the consulting fees associated with the external review of the business and an impairment of US$ 4.4 million in relation to the continued implementation of the Group's ERP system together with certain lease-hold rights.  These costs are partially offset by the effect of other income including a one-off gain of US$ 4.3 million in relation to an insurance claim.

EBITDA for the year before exceptional items was negative US$ 62.3 million (2011: positive US$ 100.8 million before exceptional items). The EBITDA margin declined from 8.8% in 2011 to a negative 6.0% in 2012, reflecting the operating performance of the business.

Finance costs

Net finance costs in the 2012 period increased to US$ 21.5 million (2011: US$ 16.2 million). This increase is largely the result of the banking facilities relating to the acquisition of MIS, utilisation of new facilities and increased facility and guarantee charges related to new contract awards in the year.

Taxation

The tax charge of US$ 0.8 million in 2012 is in respect of tax on the Group's service operations in Kazakhstan and Qatar acquired in 2011 as part of the MIS group of companies (2011: US$ 0.2 million). The Group is not currently subject to income tax in respect of its operations which are substantially undertaken in the United Arab Emirates, and the Company does not anticipate any liability to income tax arising on these operations in the foreseeable future. The Company, which is incorporated in the Isle of Man, had no income tax liability, or benefit for the year ended 31 December 2012, as it is taxable at a 0% rate in line with the local tax legislation.

Net loss and loss per share

The Group recorded a loss before income tax and exceptional items for the year of US$ 105.0 million (2011: profit before exceptional items of US$ 74.0 million) in line with our expectation as announced in November and the operating losses noted above.

The fully diluted loss per share amounts to 42.45 cents (2011: earnings per share before exceptional items of 26.47 cents) reflecting the operational performance of the Group for the year.

Exceptional items in these financial statements relates to a regulatory fine recorded in the relevant year amounting to GB£2.43 million (equivalent US$ 3.72 million converted at an exchange rate of US$ 1.53 per GB£) and related legal expenses of US$ 1.0 million.  In the prior year, exceptional items related to the acquisition of MIS. 

Operating cash flow and liquidity

The Group's net cash flow from operating activities for the year reflected a net inflow of US$ 250.7 million (2011: net outflow of US$ 54.6 million) generated by a combination of successful post-MIS project completions, in particular the sale proceeds of Hull 108 for US$ 126.5 million in May 2012, and improved working capital management. Prior to working capital movements, the Group's net cash outflow was US$ 50.8 million (2011: inflow of US$ 101.4 million) due to the losses described above.

Net cash outflow from investing activities totaled US$ 18.5 million (2011: US$ 408.8 million). The change is a result of lower levels in investment activity compared to 2011, which included the acquisition of MIS, as well as reduced margin deposits of US$ 22.3.

Net cash used in financing activities was an outflow of US$ 148.9 million (2011: inflow of US$ 371.1 million). This largely arose from repayment of borrowing of US$ 173.9 million including mandatory repayment of debt under the MIS acquisition facilities, which were drawn in July 2011, and an increase in finance costs due to servicing of this debt.

Capital expenditure

Following significant investment in 2011 resulting from the completion of our Hamriyah facility, and as a result of losses made during 2012, the Group had reduced capital expenditure in 2012. Expenditure on property plant and equipment during the year amounted to US$ 16.8 million (2011: US$ 55.5 million). The main areas of expenditure were buildings and related infrastructure at Group facilities (including capital work in progress completions) amounting to US$ 8.2 million (2011: US$ 26.0 million) and operating equipment of US$ 6.5 million (2011: US$ 9.9 million)

Balance sheet

Total non-current assets at the end of 2012 were US$ 390.4 million (2011: US$ 417.1 million), which have been negatively impacted by a US$ 9.5 million decrease in the net book value of property, plant and equipment and a US$ 11.0 million decrease in identified intangible assets due to higher depreciation and amortisation charges following the completion of the MIS acquisition and the minor impairment of intangibles referenced above.

Trade and other receivables decreased to US$ 398.3 million (2011: US$ 668.8m) as a result of a number of successful project completions, namely the disposal of Hull 108 and the completion of the Seajacks Zaratan project, and the improved debtor management within the business. The working capital position improved significantly in the last quarter of 2012 as the Group's collection of trade debtors and other receivables improved and accordingly the Group ended the year with a strong net cash position of US$ 104.1 million (2011: net debt of US$ 101.7 million).

Of the total cash of US$ 263.4 million at 31 December 2012, US$ 115.3 million was restricted in the form of margin deposits primarily for guarantees on major projects.

The period end outstanding borrowings was US$ 159.3 million (2011: US$ 251.1 million), which has reduced as a result of the part repayment of the debt facility used for the MIS acquisition.

Shareholders' equity decreased from US$ 533.9 million at 31 December 2011 to US$ 406.1 million at 31 December 2012. The movement reflects lower retained earnings of US$ 192.8 million (2011: US$ 322.2 million) and a total comprehensive loss for the year of US$ 109.0 million (2011: comprehensive income of US$ 61.4 million).

Restructuring of debt facilities and going concern

The consolidated financial statements have been prepared on a going concern basis. The ability of the Group to continue as a going concern is reliant upon the continued availability of external debt financing and access to bank guarantees for its major projects. The deterioration of the Group's performance in 2012 arising as a result of the underperformance of certain key projects the majority of which have now been completed caused the Group to seek waivers for certain of its banking covenants for the year ended 31 December 2012. These waivers were obtained prior to 31 December 2012. The group is currently in discussions with its lenders to restructure its debt facilities and agree revised covenants on a long term basis and has agreed further covenant waivers to facilitate the continuation of the negotiations.

 

The Group expects to conclude discussions with lenders in a satisfactory manner and has continued to meet all interest and other payment obligations.  After reviewing its cash flow forecasts for a period of not less than 12 months, from the date of signing of these financial statements, the Directors have a reasonable expectation that the Group will have adequate resources to continue in operational existence for the foreseeable future. The Group therefore continues to adopt the going concern basis in preparing its financial statements. 

 

Dividends

Given the post-tax losses in 2012, the Board of Directors of Lamprell recommends that the Group makes no dividend payment for the year. We look to the future with optimism, and will review our dividend policy once the business returns to profitability.

Financial outlook

The Board anticipates that in the early part of 2013 revenue levels will decrease due to reduced activity. However, activity levels are expected to improve towards the middle of the year in line with the solid order book which is already US$ 1.3 billion. In the longer-term, the Company is encouraged by the strong bidding activity across the business with the pipeline totalling more than US$ 4.1 billion. The Company has taken and will continue to take further action to stabilise the business and prepare the foundations for growth in the coming years, by focussing on its traditional areas of strength. 

 

With all this in mind, the Company expects 2013 to be a recovery year, with stable revenues as compared to 2012 and a gradual return to profitability during the year.

 

Frank Nelson

Chief Financial Officer


Lamprell plc

 

Consolidated income statement

 



Year ended 31 December 2012

Year ended 31 December 2011


Note

Pre-exceptional items

Exceptional

items


Pre-exceptional items

Exceptional

items


 


USD'000

USD'000

USD'000

USD'000

USD'000

USD'000

 








Revenue

5

1,045,499

-

1,045,499

1,147,853

-

1,147,853

Cost of sales

6

(1,065,057)

-

(1,065,057)

(1,014,913)

-

(1,014,913)



--------------------

--------------------

--------------------

--------------------

--------------------

--------------------

Gross (loss)/profit


(19,558)

-

(19,558)

132,940

-

132,940

 








Selling and distribution expenses

7

(1,527)

-

(1,527)

(2,358)

-

(2,358)

General and administrative expenses

8

(69,050)

(4,720)

(73,770)

(52,319)

(10,544)

(62,863)

Other gains/(losses) - net

11

5,652

-

5,652

11,928

-

11,928



--------------------

--------------------

--------------------

--------------------

--------------------

--------------------

Operating (loss)/profit


(84,483)

(4,720)

(89,203)

90,191

(10,544)

79,647

 








Finance costs

10

(22,400)

-

(22,400)

(17,965)

-

(17,965)

Finance income

10

867

-

867

1,804

-

1,804

 


--------------------

--------------------

--------------------

--------------------

--------------------

--------------------

Finance costs - net


(21,533)

-

(21,533)

(16,161)

-

(16,161)

Share of profit/(loss) of joint ventures


1,053

-

1,053

(8)

-

(8)

 


--------------------

--------------------

--------------------

--------------------

--------------------

--------------------

(Loss)/profit before income tax


(104,963)

(4,720)

(109,683)

74,022

(10,544)

63,478

Income tax expense


(791)

-

(791)

(188)

-

(188)

 


--------------------

--------------------

--------------------

--------------------

--------------------

--------------------

(Loss)/profit for the year attributable to the equity holders of the Company


(105,754)

(4,720)

(110,474)

73,834

(10,544)

63,290



==========

==========

==========

==========

==========

==========

(Loss)/earnings per share attributable to the equity holders of the Company

12







Basic




(42.45)c



26.56c

 




==========



==========

Diluted




(42.45)c



26.47c


Lamprell plc

 

Consolidated statement of comprehensive income

 

 

 

Year ended 31 December

 

Note

2012

2011

 

 

USD'000

USD'000

 

 

 

 

(Loss)/profit for the year

 

(110,474)

63,290

 

 



Other comprehensive income/(loss)

 



Items that may be reclassified subsequently to profit or loss:

 

 

 

Currency translation differences

 

334

(854)

Cash flow hedges:

 

 

 

   Profit arising on hedges recognised in other comprehensive income

 

 

 

1,086

 

13,083

   Amount reclassified from other
  comprehensive income

 

 

 

94

 

(14,129)

 

 

--------------------

--------------------

Other comprehensive income/(loss) for the year

 

 

1,514

 

(1,900)

 

 

--------------------

--------------------

Total comprehensive (loss)/income for the year attributable to the equity holders of the Company 

 

 

 

(108,960)

 

 

61,390

 

 

==========

==========


Lamprell plc

 

Consolidated balance sheet

 

 

                                 As at 31 December

 

Note

2012

2011

 

 

USD'000

USD'000

ASSETS

 

 

 

Non-current assets

 

 

 

Property, plant and equipment

13

165,849

175,356

Intangible assets

14

219,827

230,861

Investment in joint ventures

 

4,679

3,870

Due from a related party

17

-

7,025

 

 

------------------------

------------------------

Total non-current assets

 

390,355

417,112

 

 

------------------------

------------------------

Current assets

 

 

 

Inventories

 

13,225

12,056

Trade and other receivables

15

398,349

668,753

Derivative financial instruments

 

1,152

699

Held-to-maturity investment

 

-

6,879

Financial asset at fair value through profit or loss

16

-

8,172

Cash and bank balances

18

263,439

149,377

 


------------------------

------------------------

Total current assets

 

676,165

845,936

 


------------------------

------------------------

Total assets

 

1,066,520

1,263,048

 

 

------------------------

------------------------

LIABILITIES

 



Current liabilities

 



Borrowings

23

(159,323)

(251,089)

Derivative financial instruments

 

-

(1,449)

Trade and other payables

22

(462,891)

(436,911)

Current tax liability

 

(144)

(68)

 

 

------------------------

------------------------

Total current liabilities

 

(622,358)

(689,517)

 

 

------------------------

------------------------

Net current assets

 

53,807

156,419

 

 

------------------------

------------------------

Non-current liabilities

 



Borrowings

23

-

(36)

Provision for employees' end of service benefits

21

(38,095)

(39,597)

 

 

------------------------

------------------------

Total non-current liabilities

 

(38,095)

(39,633)

 

 

------------------------

------------------------

Total liabilities

 

(660,453)

(729,150)

 

 

------------------------

------------------------

Net assets

 

406,067

533,898

 

 

==========

==========

EQUITY

 



Share capital

19

23,552

23,552

Share premium

19

211,776

211,776

Other reserves

20

(22,069)

(23,644)

Retained earnings

 

192,808

322,214

 

 

------------------------

------------------------

Total equity attributable to the equity holders of the Company

 

406,067

533,898

 

 

==========

==========

 

Lamprell plc

 

Consolidated statement of changes in equity

 

 

 

 

Note

Share

capital

Share premium

Other

reserves

Retained

earnings

 

Total



USD'000

USD'000

USD'000

USD'000

USD'000








At 1 January 2011


18,682

-

(21,746)

287,032

283,968



-----------------

------------------

------------------

------------------

------------------

Profit for the year


-

-

-

63,290

63,290

Other comprehensive income:







Currency translation differences


-

-

(854)

-

(854)

Cash flow hedges


-

-

(1,046)

-

(1,046)



-----------------

------------------

------------------

------------------

------------------

Total comprehensive income for the year


-

-

(1,900)

63,290

61,390



-----------------

------------------

------------------

------------------

------------------

Transactions with owners:







Share-based payments:







- value of services provided


-

-

-

1,439

1,439

Treasury shares  purchased

19

-

-

-

(455)

(455)

Proceeds received from exercise of share options


-

-

-

187

187

Proceeds  from shares issued (net)

19

4,870

211,776

-

-

216,646

Transfer to legal reserve

20

-

-

2

(2)

-

Dividends


-

-

-

(29,277)

(29,277)



-----------------

------------------

------------------

------------------

------------------

Total transactions with owners


4,870

211,776

2

(28,108)

188,540



-----------------

------------------

------------------

------------------

------------------

At 31 December 2011


23,552

211,776

(23,644)

 322,214

533,898



----------------

------------------

------------------

------------------

------------------

Loss for the year


-

-

-

(110,474)

(110,474)

Other comprehensive income:







Currency translation differences


-

-

334

-

334

Cash flow hedges


-

-

1,180

-

1,180



-----------------

------------------

------------------

------------------

------------------

Total comprehensive loss for the year


-

-

1,514

(110,474)

(108,960)



-----------------

------------------

------------------

------------------

------------------

Transactions with  owners:







Share-based payments:







- value of services provided


-

-

-

2,348

2,348

Treasury shares purchased

19

-

-

-

(946)

(946)

Proceeds received from exercise of share options




-

556

556

Transfer to legal reserve

20

-

-

61

(61)

-

Dividends


-

-

-

(20,829)

(20,829)



-----------------

------------------

------------------

------------------

------------------

Total transactions with owners


-

-

61

(18,932)

(18,871)



-----------------

------------------

------------------

------------------

------------------

At 31 December 2012


23,552

211,776

(22,069)

192,808

406,067



========

========

========

========

========

 


Lamprell plc

 

Consolidated cash flow statement

 



Year ended 31 December


Notes

2012

2011

 


USD'000

USD'000

Operating activities








Cash generated from/(used in) operating activities


250,662

(54,582)

Tax paid


(715)

(120)

 


---------------

---------------

Net cash generated from/(used in) operating activities


249,947

(54,702)



---------------

---------------

Investing activities




Additions to property, plant and equipment

13

(16,743)

(55,483)

Proceeds from sale of property, plant and equipment


111

439

Additions to intangible assets

14

(1,839)

(1,800)

Held-to-maturity investment


6,999

(4)

Finance income

10

867

1,531

Dividend received from joint ventures


244

760

Acquisition  of subsidiary -net of cash acquired


-

(322,217)

Proceeds from disposal of a subsidiary


1,628

-

Movement in deposit with original maturity of more than  three months

 

18

 

45,035

 

(19,907)

Movement in deposits under lien

18

(51,336)

-

Movement in margin deposits

18

(3,473)

(12,154)



---------------

---------------

Net cash used in investing activities


(18,507)

(408,835)



---------------

---------------

Financing activities




Net proceeds from issue of share capital

19

-

216,646

Proceeds from financial asset at fair value through profit or loss

 

16

 

7,977

 

2,590

Treasury shares purchased


(946)

(455)

Proceeds from options exercised


556

187

Dividends paid


(20,823)

(29,316)

Proceeds from borrowings


60,630

245,216

Repayments of borrowings


(173,853)

(45,811)

Finance costs

10

(22,400)

(17,965)



------------------

---------------

Net cash (used in)/generated from financing activities


(148,859)

371,092



-----------------

---------------

Net increase/(decrease) in cash and cash equivalents


82,581

(92,445)





Cash and cash equivalents, beginning of the year


43,505

136,804

Exchange rate translation


286

(854)



-----------------

---------------

Cash and cash equivalents, end of the year

18

126,372

43,505



========

=======


Lamprell plc

 

Notes to the financial statements for the year ended 31 December 2012

1      Legal status and activities

 

Lamprell plc ("the Company") and its subsidiaries ("the Group") are engaged in the upgrade and refurbishment of offshore jackup rigs; fabrication; assembly and new build construction for the offshore oil and gas sector and renewable sector, including jackup rigs and lift boats; Floating Production, Storage and Offloading ("FPSO") and other offshore and onshore structures; and oilfield engineering services, including the upgrade and refurbishment of land rigs.

 

During 2011, the group acquired 100% of the shares in Maritime Industrial Services Company Ltd Inc. ("MIS") through its wholly owned subsidiary Lamprell Investments Holding Limited. MIS is registered in Panama and has operations in the Middle East and Kazakhstan. The principal activities of MIS are the upgrade and refurbishment of offshore jackup rigs; fabrication; assembly and new build construction for the offshore oil and gas sector; engineering and construction; safety and training services and other operating and maintenance services. At the time of acquisition, MIS was listed on the Norwegian Stock Exchange and was subsequently delisted in September 2011.

 

2      Basis of preparation

 

The Group is required to present its annual consolidated financial statements for the year ended 31 December 2012 in accordance with EU adopted International Financial Reporting Standards ("IFRS"), International Financial Reporting Interpretations Committee ("IFRIC") interpretations and those parts of the Isle of Man Companies Acts 1931-2004 applicable to companies reporting under IFRS.

 

This financial information set out in this preliminary announcement does not constitute the Group's statutory accounts for the year ended 31 December 2012.  The financial information has been extracted from the consolidated financial statements for the year ended 31 December 2012 approved by the Board of Directors on 19 March 2013 upon which the auditors' opinion is not
modified and includes an emphasis of matter paragraph in respect of going concern, and did not contain a statement under section 15(4) or 15(6) of the Isle of Man Companies Act 1982.
The financial information comprises the Group balance sheets as of 31 December 2012 and 31 December 2011 and related Group income statement, statement of comprehensive income,
cash flows, statement of changes in equity and related notes for the twelve months then ended, of Lamprell plc. This financial information has been prepared under the historical cost convention
except for the measurement at fair value of share options, financial assets at fair value through profit or loss and derivative financial instruments.

 

The preliminary results for the year ended 31 December 2012 have been prepared in accordance with the Listing Rules of the London Stock Exchange.

 

The consolidated financial statements have been prepared on a going concern basis. The ability of the Group to continue as a going concern is reliant upon the continued availability of external debt financing and access to bank guarantees for its major projects. The deterioration of the Group's performance in 2012 arising as a result of the underperformance of certain key projects the majority of which have now been completed caused the Group to seek waivers for certain of its banking covenants for the year ended 31 December 2012. These waivers were obtained prior to 31 December 2012. The Group is currently in discussions with its lenders to restructure its debt facilities and agree revised covenants on a long term basis and has agreed further covenant waivers to facilitate the continuation of the negotiations.

 

The Group expects to conclude discussions with lenders in a satisfactory manner and has continued to meet all interest and other payment obligations. After reviewing its cash flow forecasts for a period of not less than 12 months, from the date of signing of these financial statements, the Directors have a reasonable expectation that the Group will have adequate resources to continue in operational existence for the foreseeable future. The Group therefore continues to adopt the going concern basis in preparing its financial statements.

 

The preparation of financial information in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Group financial information are disclosed in Note 4.

 

3      Accounting policies

 

The accounting policies used are consistent with those set out in the audited financial statements for the year ended 31 December 2011 and reviewed interim financial information for the period ended 30 June 2012, which are available on the Company's website, www.lamprell.com.

 

4      Critical accounting estimates and judgements

 

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

 

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows:

 

Revenue recognition

 

The Group uses the percentage-of-completion method in accounting for its contract revenue. Use of the percentage-of-completion method requires the Group to estimate the stage of completion of the contract to date as a proportion of the total contract work to be performed in accordance with the accounting policy. As a result, the Group is required to estimate the total cost to completion of all outstanding projects at each period end. The application of a 10% sensitivity to management estimates of the total costs to completion of all outstanding projects at the year-end would result in the revenue and profit increasing by USD 24.4 million (2011: USD 32.9 million) if the total costs to complete are decreased by 10% and the revenue and profit decreasing by USD 45.2 million (2011: USD 24.3 million) if the total costs to complete are increased by 10%.

 

Estimated impairment of goodwill

 

The Group tests goodwill for impairment annually or more frequently if events or changes in circumstances indicate a potential impairment. Goodwill is monitored by management at the 'cash generating unit relating to upgrade and refurbishment of offshore jackup rigs, fabrication, assembly and new build construction for the offshore oil and gas and renewables sectors, including FPSO and other offshore and onshore structures, oilfield engineering services, including the upgrade and refurbishment of land rigs' (CGU1).

 

The recoverable amount of CGU1 has been determined based on value-in-use calculations. These calculations require the use of estimates. These calculations use pre-tax cash flow projections based on financial budgets approved by management covering a three-year period. Cash flows beyond the three-year period are extrapolated using the estimated growth rate of 5%. A discount rate of 12.96% has been used to discount the pre-tax cash flows projection to the present value. Changing the assumptions selected by management used in the cash flow projections, could significantly affect the Group's impairment evaluation. If the growth rate used was to differ by 0.5% from management's estimates, there would be a reduction or increase of USD 1.6 million in headroom. If the discount rate used was to differ by 0.5% from management's estimates, there would be a reduction of USD 23.6 million or increase of USD 26.3 million in headroom. If the net profit as a percentage of revenue used was to differ by 0.5% from management's estimates, there would be a reduction or increase of USD 61.9 million in headroom. If the terminal value growth rate used was to differ by 0.5% from management's estimates, there would be a reduction of USD 16.7 million or increase of USD 18.6 million in headroom.

 

Employees' end of service benefits

 

The rate used for discounting the employees' post-employment defined benefit obligation should be based on market yields on high quality corporate bonds. In countries where there is no deep market for such bonds, the market yields on government bonds should be used. In the UAE, there is no deep market either for corporate or government bonds and therefore, the discount rate has been estimated using the US AA-rated corporate bond market as a proxy. On this basis, the discount rate applied was 3.00% (2011: 4.25%). If the discount rate used was to differ by 0.5 points from management's estimates, the carrying amount of the employee's end of the service benefits provision at the balance sheet date would be an estimated USD 1.2 million (2011: USD 1.4 million) lower or USD 1.3 million (2011: USD 1.5 million) higher.

 

5      Segment information

 

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker has been identified as the Executive Directors who make strategic decisions. The Executive Directors review the Group's internal reporting in order to assess performance and allocate resources. Management has determined the operating segments based on these reports.

 

The Executive Directors consider the business mainly on the basis of the facilities from where the services are rendered. Management considers the performance of the business from Sharjah (SHJ), Hamriyah (HAM) and Jebel Ali (JBA) in addition to the performance of Land Rig Services (LRS) and International Inspection Services Limited (Inspec).

 

SHJ, HAM, JBA and LRS meet all the aggregation criteria required by IFRS 8 and are reported as a single segment (Segment A). Services provided from Inspec do not meet the quantitative thresholds required by IFRS 8, and the results of these operations are included in the "all other segments" column.

 

The reportable operating segments derive their revenue from the upgrade and refurbishment of offshore jackup rigs, fabrication, assembly and new build construction for the offshore oil and gas and renewables sectors, including FPSO and other offshore and onshore structures, oilfield engineering services, including the upgrade and refurbishment of land rigs.

 

Inspec derives its revenue from various services such as non-destructive pipeline testing, ultrasonic testing and heat treatment.

 

During 2011, the Company through its wholly owned subsidiary, LIH, acquired MIS. The revenue of MIS is mainly derived from the upgrade and refurbishment of offshore jackup rigs, fabrication, assembly and new build construction for the offshore oil and gas sector, engineering and construction. The Executive Directors consider these services to be similar to the services provided by Lamprell from SHJ, HAM, JBA and LRS and hence they have been considered under the reporting segment (Segment A). Additionally, MIS also provides safety and training services (Sunbelt) and other operating and maintenance services (O&M). As services provided by Sunbelt and O&M do not meet the quantitative thresholds required by IFRS 8, the results of these operations are included in the "all other segments" column.

 

 

Segment A

All other

segments

Total

 

USD'000

USD'000

USD'000

Year ended 31 December 2012

 

 

 





Total segment revenue

950,176

106,595

1,056,771

Inter-segment revenue

-

(11,272)

(11,272)

 

--------------------

--------------------

--------------------

Revenue from external customers

950,176

95,323

1,045,499

 

===========

===========

===========

Gross operating profit

22,171

19,167

41,338

 

===========

===========

===========

 

Year ended 31 December 2011

 

 

 

 




Total segment revenue

1,101,741

53,357

1,155,098

Inter-segment revenue

-

(7,245)

(7,245)

 

--------------------

--------------------

--------------------

Revenue from external customers

1,101,741

46,112

1,147,853

 

===========

===========

===========

Gross operating profit

138,113

13,959

152,072

 

===========

===========

===========

 

Sales between segments are carried out on agreed terms. The revenue from external parties reported to the Executive Directors is measured in a manner consistent with that in the consolidated income statement.

 

The Executive Directors assess the performance of the operating segments based on a measure of gross profit. The staff, equipment and certain subcontract costs are measured based on standard cost. The measurement basis excludes the effect of the common expenses for yard rent, repairs and maintenance and other miscellaneous expenses. The reconciliation of the gross operating (loss)/profit is provided as follows:

 

 

2012

2011

 

USD'000

USD'000

Gross operating profit for the reportable segment as  reported to the Executive Directors

22,171

138,113

Gross operating profit for all other segments as reported to the Executive Directors

19,167

13,959

Unallocated:

 

 

  Finance costs absorbed in reportable segments 

-

5,968

  Under-absorbed employee and equipment costs

(26,141)

(9,157)

  Repairs and maintenance

(18,275)

(12,524)

  Yard rent and depreciation

(10,891)

(3,357)

  Others

(5,589)

(62)

 

--------------------

--------------------

Gross (loss)/profit

(19,558)

132,940

 

--------------------

--------------------

Selling and distribution expenses (Note 7)

(1,527)

(2,358)

General and administrative expenses (Note 8)

(73,770)

(62,863)

Other gains/(losses) - net (Note 11)

5,652

11,928

Finance costs (Note 10)

(22,400)

(17,965)

Finance income (Note 10)

867

1,804

Others

262

(196)

 

--------------------

--------------------

(Loss)/profit for the year

(110,474)

63,290

 

===========

===========

 

Information about segment assets and liabilities is not reported to or used by the Executive Directors and accordingly, no measures of segment assets and liabilities are reported.

 

The breakdown of revenue from all services is as follows:

 

2012

2011

 

USD'000

USD'000

 

 

 

New build activities - oil and gas

493,637

500,618

New build activities - renewables

66,365

289,105

Upgrade and refurbishment activities

176,896

191,009

Offshore construction

179,666

52,507

Others

128,935

114,614

 

-------------------

-------------------

 

1,045,499

1,147,853

 

===========

===========

 

The Group's principal place of business is in the UAE. The revenue recognised in the UAE with respect to services performed to external customers is USD 1,030.9 million (2011: USD 1,139.3 million), and the revenue recognised from the operations in other countries is USD 14.6 million (2011: USD 8.6 million).

 

Certain customers individually accounted for greater than 10% of the Group's revenue, shown in the table below:


2012

2011


USD'000

USD'000




External customer A

188,993

193,972

External customer B

122,453

158,576

External customer C

109,518

137,374

External customer D

-

119,284


-------------------

-------------------


420,964

609,206


===========

===========

 

The revenue from these customers is attributable to Segment A. The above customers in 2012 are not necessarily the same customers in 2011.

 

 

 

 

 

6       Cost of sales

 


2012

2011


USD'000

USD'000




Materials and related costs

410,387

482,726

Sub-contract costs

284,526

257,563

Staff costs (Note 9)

207,266

136,221

Sub-contract labour

67,992

63,509

Repairs and maintenance

15,866

17,566

Equipment hire

25,155

16,356

Depreciation

20,289

14,982

Yard rent

7,194

4,248

Others

26,382

21,742


-------------------

-------------------


1,065,057

1,014,913


===========

===========

 

7      Selling and distribution expenses

 

 

2012

2011

 

USD'000

USD'000

 

 

 

Advertising and marketing

521

1,965

Entertainment

58

114

Travel

944

173

Others

4

106

 

-------------------

-------------------

 

1,527

2,358

 

===========

===========

 

8      General and administrative expenses

 


2012

2011


USD'000

USD'000

 

Staff costs (Note 9)

31,375

34,200

Legal, professional and consultancy fees

6,370

10,516

Depreciation

5,201

4,301

Amortisation of intangible assets

8,534

3,887

Utilities and communication

717

3,706

Provision for impairment of trade receivables

7,633

168

Write-off of intangible assets

4,339

-

Regulatory fine

3,720

 

Others

5,881

6,085


----------------

----------------


73,770

62,863


========

========

 

Exceptional items:

 

Items that are material either because of their size or their nature or that are non-recurring are presented within their relevant consolidated income statement category, but highlighted separately in the consolidated income statement. The separate reporting of exceptional items helps provide a better picture of the Group's underlying performance.

 

Exceptional items in these financial statements, relates to a regulatory fine recorded in the current year amounting to GBP 2.43 million (USD equivalent 3.72 million converted at an exchange rate of USD 1.53 per GBP) and related legal expenses of USD 1.0 million. In the prior year exceptional items relate to acquisition of MIS. An analysis of the nature of expense is as follows:

 


2012

2011


USD'000

USD'000


 


Regulatory fine

3,720

 

Financial advisory fees

-

5,024

Legal fees

1,000

1,781

Professional fees

-

1,220

Post acquisition charge of cash cancellation of MIS share options

-

1,919

Other expenses

-

600


----------------

----------------


4,720

10,544


========

========

 

9      Staff costs

 


2012

2011


USD'000

USD'000


 


Wages and salaries

134,077

100,214

Employees' end of service benefits

6,263

8,508

Share based payments - value of services provided

2,348

1,439

Termination benefits

1,718

-

Other benefits

94,235

60,260


----------------

----------------


238,641

170,421


========

========

Staff costs are included in:

 

 

Cost of sales (Note 6)

207,266

136,221

General and administrative expenses (Note 8)

31,375

34,200


----------------

----------------


238,641

170,421


========

========

Number of employees at 31 December

8,661

9,496


========

========

 

10      Finance costs - net

 

 

2012

USD'000

2011

USD'000

Finance costs



 

Bank guarantee charges

6,764

6,157

Interest on bank borrowings

9,574

5,392

Facility fees

4,429

4,441

Commitment fees

67

1,200

Others

1,566

775


----------------

----------------


22,400

17,965

 

========

========

 

Finance income

 

Finance income comprises of interest income on bank deposits of USD 0.9 million (2011: USD 1.5 million) and interest accretion on loan to KSAM2 of USD Nil (2011: USD 0.3 million)

 

11    Other gains/(losses) - net

 

 

2012

USD'000

2011

USD'000




Gain on settlement of receivable from KSAM2 (Note 17)

4,265

-

Gain on disposal of a subsidiary

853

-

Fair value (loss)/gain on financial asset carried at fair value through profit or loss (Note 16)

(195)

8,262

Fair value gain on derivatives

1,152

-

Gain on settlement of held-to-maturity investment

120

-

Profit on disposal of property, plant and equipment

54

281

Exchange (loss)/gain - net

(946)

3,102

Others

349

283


----------------

----------------


5,652

11,928

 

========

========

 

12    (Loss)/earnings per share

 

(a)     Basic

 

Basic (loss)/earnings per share is calculated by dividing the (loss)/profit attributable to the equity holders of the Company by the weighted average number of ordinary shares in issue during the year excluding ordinary shares purchased by the Company and held as treasury shares (Note 19).

 

(b)     Diluted

 

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. For the free share awards, options under executive share option plan and performance share plan, a calculation is performed to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the Company's shares) based on the monetary value of the subscription rights attached to outstanding share awards/options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share awards/options. Since the Company has incurred a loss from continuing operations during the year ended 31 December 2012, all the Company's existing potential ordinary shares are not dilutive as they decrease the loss from continuing operations.

 


2012

USD'000

2011

USD'000

The calculations of (loss)/earnings per share are based on the following (loss)/profit and numbers of shares:






(Loss)/profit for the year

(110,474)

63,290


-----------------------

-----------------------

Weighted average number of shares for basic (loss)/earnings per share

260,219,631

238,329,508




Adjustments for:



Assumed exercise of free share awards

-

-

Assumed vesting of executive share options

-

445,443

Assumed vesting of performance share plan

-

361,723


-----------------------

-----------------------

Weighted average number of shares for diluted earnings per

 share

260,219,631

239,136,674

 

-----------------------

-----------------------

 

 

 

(Loss)/earnings per share:

 

 

  Basic

(42.45)c

26.56c


===========

===========

Diluted

(42.45)c

26.47c

 

===========

===========

 

On 19 May 2011, the Company announced a rights issue of three shares for every ten shares held at a discounted price of 232 pence per share resulting in the issue of 60,083,792 new ordinary shares. The calculation of the weighted average number of ordinary shares for the year 2011 was affected by the issue of the new ordinary shares. The Group has treated the discount element of the rights issue as if it was a bonus issue, using the theoretical ex-rights price of 324 pence per share.

 

13    Property, plant and equipment

 




Fixtures


Capital



Buildings &

Operating

and office

Motor

work-in-



infrastructure

equipment

equipment

vehicles

progress

Total


USD'000

USD'000

USD'000

USD'000

USD'000

USD'000

Cost







At 1 January 2011

49,254

80,223

10,378

4,199

29,895

173,949

Additions

11,893

9,887

2,584

859

30,260

55,483

Acquired through a
  business combination

9,585

14,332

978

517

598

26,010

Transfers

24,309

1,351

131

-

(25,791)

-

Disposals

(26)

(136)

(33)

(650)

-

(845)


-------------------

At 31 December 2011

95,015

105,657

14,038

4,925

34,962

254,597

Additions

5,952

5,832

1,330

189

3,440

16,743

Exchange differences

8

28

3

16

-

55

Transfers

8,376

17,735

628

(246)

(26,493)

-

Disposed as a part of disposal of a subsidiary

-

(1,055)

-

-

-

(1,055)

Other disposals

(47)

(63)

-

(213)

-

(323)


-------------------

At 31 December 2012

109,304

128,134

15,999

4,671

11,909

270,017


-------------------

Depreciation







At 1 January 2011

10,141

39,828

8,040

2,636

-

60,645

Charge for the year

5,297

11,329

1,846

811

-

19,283

Disposals

(26)

(136)

(33)

(492)

-

(687)


-------------------

At 31 December 2011

15,412

51,021

9,853

2,955

-

79,241

Charge for the year

6,186

16,420

2,350

510

-

25,466

Exchange differences

(29)

29

5

2

-

7

Disposed as a part of disposal of a subsidiary

-

(280)

-

-

-

(280)

Other disposals

(18)

(54)

-

(194)

-

(266)


-------------------

At 31 December 2012

21,551

67,136

12,208

3,273

-

104,168


-------------------

Net book amount







At 31 December 2012

87,753

60,998

3,791

1,398

11,909

165,849


========

========

========

========

========

========

At 31 December 2011

79,603

54,636

4,185

1,970

34,962

175,356


========

========

========

========

========

========

 

14    Intangible assets

 


Goodwill

Trade name

Customer relationships

Leasehold rights

ERP

software

Work-in- progress

Total


USD'000

USD'000

USD'000

USD'000

USD'000

USD'000

USD'000

Cost








At 1 January 2011

-

-

-

1,534

-

1,191

2,725

Acquired through a

   business combination

180,539

22,335

19,323

8,338

-

-

230,535

Additions

-

-

-

-

-

1,800

1,800


-----------------

-----------------

-----------------

-----------------

-----------------

-----------------

-----------------

At 31 December 2011

180,539

22,335

19,323

9,872

-

2,991

235,060

Additions

-

-

-

-

-

1,839

1,839

Disposal/write-off

-

-

-

(1,534)

-

(3,294)

(4,828)

Transfers

-

-

-

-

1,536

(1,536)

-


-----------------

-----------------

-----------------

-----------------

-----------------

-----------------

-----------------

At 31 December 2012

180,539

22,335

19,323

8,338

1,536

-

232,071


-----------------

-----------------

-----------------

-----------------

-----------------

-----------------

-----------------









Amortisation








At 1 January 2011

-

-

-

312

-

-

312

Charge for the year

-

1,303

2,214

370

-

-

3,887


-----------------

-----------------

-----------------

-----------------

-----------------

-----------------

-----------------

At 31 December 2011

-

1,303

2,214

682

-

-

4,199

Charge for the year

-

2,826

4,831

706

171

-

8,534

Disposal/write-off

-

-

-

(489)

-

-

(489)


-----------------

-----------------

-----------------

-----------------

-----------------

-----------------

-----------------

At 31 December 2012

-

4,129

7,045

899

171

-

12,244


-----------------

-----------------

-----------------

-----------------

-----------------

-----------------

-----------------

 

Net book value








At 31 December 2012

180,539

18,206

12,278

7,439

1,365

-

219,827


========

========

========

========

========

========

========

At 31 December 2011

180,539

21,032

17,109

9,190

-

2,991

230,861


========

========

========

========

========

========

========

 

Management reviews the business performance based on the type of business. Goodwill is monitored by the management at the operating segment level. Goodwill of USD 180.5 million arising due to the acquisition of MIS has been allocated to the CGU1 within Segment A.

 

The recoverable amount of CGU1 has been determined based on value-in-use calculations. These calculations use pre-tax cash flow projections based on financial budgets approved by management covering a three-year period. Cash flows beyond the three-year period are extrapolated using the estimated growth rate of 5% (2011: 4.3%) for Segment A. A discount rate of 12.96% (2011: 9%) has been used to discount the pre-tax cash flows projection to the present value. The growth rate does not exceed the long-term average growth rate for the business in which the CGU operates.

 

 

15    Trade and other receivables

 


2012

2011


USD'000

USD'000

 

 

 

Trade receivables

115,222

121,722

Other receivables and prepayments

17,952

18,577

Advances to suppliers

3,131

6,641

Receivables from a related party (Note 17)

356

484


---------------

---------------


136,661

147,424

Less: Provision for impairment of trade receivables

(7,997)

(3,109)


---------------

---------------


128,664

144,315

Amounts due from customers on contracts

141,165

386,171

Contract work in progress

128,520

138,267


---------------

---------------


398,349

668,753


=======

=======

 

16    Financial asset at fair value through profit or loss

 


2012

2011


USD'000

USD'000




Unlisted equity security

-

8,172


======

======

 

The amount at 31 December 2011 represented the fair value of the Group's investment (held through MIS) in 8.7% of the equity in Middle East Jack-up Ltd (MEJU), which owned a jack-up rig built by MIS. This rig was sold by MEJU in January 2012 following the successful delivery of the rig by the Group in the last quarter of 2011.

 

During 2011, a fair value gain of USD 8.2 million was recorded in 'other gains/(losses) - net' (Note 11) in the consolidated income statement based on management's estimate of the carrying value which represents the amounts expected to be received from MEJU upon winding of its operations.

 

During the year, the management of MEJU took a decision to liquidate MEJU. An amount of USD 8.0 million was received from MEJU as part of the liquidation proceeds and the balance of USD 0.2 million was recorded in 'other gains/(losses) - net' in the consolidated income statement as irrecoverable.

 

Financial assets at fair value through profit or loss are presented within 'operating activities' as part of changes in working capital in the consolidated cash flow statement.

 

17      Related party balances and transactions

 

Related parties comprise LHL (which owns 33% of the issued share capital of the Company), certain legal shareholders of the Group companies, Directors and key management personnel of the Group and entities controlled by Directors and key management personnel. Key management includes the directors (executive and non-executive) and members of the executive committee.  Related parties for the purpose of the parent company financial statements also include subsidiaries owned directly or indirectly and joint ventures. Other than disclosed elsewhere in the financial statements, the Group entered into the following significant transactions during the year with related parties at prices and on terms agreed between the related parties:

 

 


2012

2011


USD'000

USD'000




Key management compensation

8,482

7,465


======

======

Legal and professional services

609

804


======

======

Sales to joint ventures

443

224


======

======

Purchases from joint ventures

50

73


======

======

Sponsorship fees and commissions paid to legal shareholders of subsidiaries

356

205


======

======

 

Key management compensation comprises:




Salaries and other short term employee benefits

5,127

6,246

Share based payments - value of services provided

1,513

829

Post-employment benefits

124

390

Termination benefits

1,718

-


-------------

-------------


8,482

7,465


======

======

 

The terms of the employment contracts of the key management include reciprocal notice periods of between six to twelve months.

 

 

Due from related parties

 


2012

2011


  USD'000

USD'000




MIS Arabia Co. Ltd (current))

356

         484


========

========

KSAM2 (non-current)

-

7,025


========

========

 

At 31 December 2011, the balance receivable from KSAM2 represents an interest free loan amounting to USD 13.2 million with no fixed repayment terms. The amortised cost of this loan using an effective interest rate of 9% per annum on the date of business combination amounted to USD 6.7 million. During 2011, the Group recognised an interest accretion on this loan amounting to USD 0.3 million which is included as part of finance income (Note 10).

 

During 2012, the Group received USD 11.3 million from KSAM2, out of which an amount of USD 4.3 million was received in excess of the amortised cost and is recognised in the consolidated income statement as a part of 'other gains/(losses) - net' - (Note 11).

 

Further, the Company has provided performance guarantees on behalf of its subsidiary.  These guarantees, issued in the normal course of business, are outstanding at the year end and no outflow of resources embodying economic benefits in relation to these guarantees is expected by the Company.

 

Dividends paid by the Company include an amount of USD 6.9 million (2011: USD 9.7 million) in respect of shares held by LHL, a company controlled by Steven Lamprell who is a member of key management.

 

18    Cash and bank balances

 

 


  2012

2011


USD'000

USD'000




Cash at bank and on hand

148,185

43,897

Term deposits and margin deposits

115,254

105,480


---------------

---------------

Cash and bank balances

263,439

149,377

Less: Margin deposits

(21,600)

(18,127)

Less: Deposits with an original maturity of more

          than 3 months

(42,318)

(87,353)

Less: Short term deposits under lien

          than 3 months

(51,336)

-

Less: Bank overdraft

(21,813)

(392)


---------------

---------------

Cash and cash equivalents (for the purpose of the cash
  flow statement)

126,372

43,505


=======

=======

 

19    Share capital

 

Issued and fully paid ordinary shares

 

Company

 

 

Equity share capital

 

Number

USD'000

 

 


 

 

At 1 January 2011

200,279,309

18,682

 

Rights issue 29 June 2011

60,083,792

4,870

 

 

------------------------

---------------

 

At 31 December 2011 and 2012

260,363,101

23,552

 

 

===========

=======

 

 

The total authorised number of ordinary shares is 400 million shares (2011: 400 million shares) with a par value of 5 pence per share (2011: 5 pence per share).

 

During 2012, EBT acquired 170,000 shares (2011: 171,565 shares) of the Company. The total amount paid to acquire the shares was USD 0.95 million (2011: USD 0.46 million) and this amount has been deducted from the consolidated retained earnings. During the year, 605,048 shares (2011: 998,969 shares) amounting to USD 2.1 million (2011: USD 2.5 million) were issued to employees on vesting of the free shares and 14,686 shares (2011: 449,734 shares) are held as treasury shares at 31 December 2012. The Company has the right to reissue these shares at a later date. These shares will be issued on the vesting of the awards granted under free shares/share options/performance share plan to certain employees of the Group.

 

During 2011, the Company issued new ordinary shares of 60,083,792 under a fully underwritten rights issue. The new ordinary shares were issued at a price of 232 pence per share which amounted to net proceeds of USD 216.6 million. The differential between the issue price of 232 pence per share and the par value of 5 pence per share amounting to USD 211.8 million was accounted for as share premium which is net of transaction costs amounting to USD 9.3 million.

 

20    Other reserves

 

 

Legal reserve

Merger
reserve

Translation
 reserve

Hedging
 reserve

 

Total

 

USD'000

USD'000

USD'000

USD'000

USD'000

 

 

 

 

 

 

At 1 January 2011

33

(22,422)

777

(134)

(21,746)

Currency translation differences

-

-

(854)

-

(854)

Cash flow hedges

-

-

-

(1,046)

(1,046)

Transfer from retained earnings

2

-

-

-

2

 

---------------

---------------

------------------

---------------

---------------

At 31 December 2011

35

(22,422)

(77)

(1,180)

(23,644)

Currency translation differences

-

-

334

-

334

Cash flow hedges

-

-

-

1,180

1,180

Transfer from retained earnings

61

-

-

-

61

 

---------------

---------------

------------------

---------------

---------------

At 31 December 2012

96

(22,422)

257

-

(22,069)

 

========

========

========

========

========

 

Legal reserve

 

The Legal reserve relates to subsidiaries (other than the subsidiaries incorporated in free zones) in the UAE and State of Qatar. In accordance with the laws of the respective countries, the Group has established a statutory reserve by appropriating 10% of the profit for the year of such companies. Such transfers are required to be made until the reserve is equal to, at least, 50% (UAE) and 33.3% (State of Qatar) of the issued share capital of such companies. The legal reserve is not available for distribution.

 

Merger reserve

 

On 11 September 2006, LEL acquired 100% of the legal and beneficial ownership of Inspec from LHL for a consideration of USD 4.0 million. This acquisition has been accounted for using the uniting of interests method and the difference between the purchase consideration (USD 4.0 million) and the share capital of Inspec (USD 0.2 million) has been recorded in the Merger reserve.

 

On 25 September 2006, the Company entered into a share for share exchange agreement with LEL and LHL under which it acquired 100% of the 49,003 shares of LEL from LHL in consideration for the issue to LHL of 200,000,000 shares of the Company. This acquisition has been accounted for using the uniting of interests method and the difference between the nominal value of shares issued by the Company (USD 18.7 million) and the nominal value of LEL shares acquired (USD 0.1 million) has been recorded in the Merger reserve.

 

21    Provision for employees' end of service benefits 

 

In accordance with the provisions of IAS 19, management has carried out an exercise to assess the present value of its obligations at 31 December 2012 and 2011, using the projected unit credit method, in respect of employees' end of service benefits payable under the Labour Laws of the countries in which the Group operates.  Under this method, an assessment has been made of an employee's expected service life with the Group and the expected basic salary at the date of leaving the service. The obligation for end of service benefit is not funded.

 

The movement in the employees' end of service benefit liability over the year is as follows:

 


2012

2011


USD'000

USD'000

 

 

 

At 1 January

39,597

18,524

Acquired through a business combination

-

16,400

Current service cost

5,384

4,298

Interest cost

1,582

1,039

Actuarial (gains)/losses

(703)

3,171

Benefits paid

(7,765)

(3,835)


-------------

-------------

At 31 December

38,095

39,597


======

======

 

22    Trade and other payables

 


2012

2011


USD'000

USD'000




Trade payables

41,007

79,974

Other payables and accruals

217,632

238,151

Amounts due to customers on contracts

204,234

118,701

Dividend payable

18

12

Payable to related parties

-

73


---------------

---------------


462,891

436,911


=======

=======

 

 

23    Borrowings

 


2012

2011


USD'000

USD'000




Bank overdrafts (Note 18)

21,813

392

Bank term loans

137,510

247,396

Trust receipts

-

3,337


---------------

---------------


159,323

251,125


=======

=======

The bank borrowings are repayable as follows:

 

 

 

 

 

On demand or within one year (current)

159,323

251,089

In the second year (non-current)

-

36

 

---------------

---------------

 

159,323

251,125

 

=======

=======

 

 

 

 

24    Commitments

 

(a)     Operating lease commitments

 

The Group leases land and staff accommodation under various operating lease agreements. The remaining lease terms of the majority of the leases are between four to twenty one years and are renewable at mutually agreed terms. The future minimum lease payments payable under operating leases are as follows:

 


2012

2011


USD'000

USD'000




Not later than one year

8,791

10,239

Later than one year but not later than five years

13,136

13,986

Later than five years

43,907

46,580


-------------

-------------


65,834

70,805


======

======

 

(b)     Other commitments

 

Letters of credit for purchase of materials and operating equipment

20

11,902


======

======

Capital commitments for construction of facilities

5,295

18,730


======

======

Capital commitments for purchase of operating equipment and computer software

1,163

4,165


======

======

 

25    Bank guarantees

 


2012

2011


USD'000

USD'000




Performance/bid bonds

159,007

206,964

Advance payment, labour visa and payment guarantees

446,235

542,071


---------------

---------------


605,242

749,035


=======

=======

 

The various bank guarantees, as above, were issued by the Group's bankers in the ordinary course of business. Certain guarantees are secured by cash margins, assignments of receivables from some customers and, in respect of guarantees provided by banks to the Group companies, they have been secured by parent company and certain Group company guarantees. In the opinion of the Directors, the above bank guarantees are unlikely to result in any liability to the Group.

 

 

 

 

 

 

 

26    Cash generated from operating activities

 

 

 

Year ended 31 December

 

Notes

2012

2011

 

 

 

USD'000

USD'000

 

Operating activities

 

 

 

 

(Loss)/profit before income tax

 

(109,683)

63,478

 

Adjustments for:

 

 

 

 

Share based payments - value of services provided

 

2,348

1,439

 

Depreciation

13

25,466

19,283

 

Amortisation of intangible assets

14

8,534

3,887

 

Share of (profit)/loss from investment in joint ventures

 

(1,053)

8

 

Profit on disposal of property, plant and equipment

11

(54)

(281)

 

Fair value loss/(gain) on financial asset at fair value through profit or loss

 

16

 

195

 

(8,262)

 

Provision for slow moving and obsolete inventories

 

139

826

 

Provision for impairment of trade receivables, net of   amounts recovered

 

15

 

4,888

 

168

 

Provision for employees' end of service benefits

21

6,263

8,508

 

Gain on disposal of a subsidiary

11

(853)

-

 

Gain on settlement of receivable from a related party

17

(4,265)

-

 

Gain on derivative financial instruments

 

(722)

-

 

Gain on settlement of held-to-maturity investment

 

(120)

-

 

Loss on write-off of intangible assets

8

4,339

-

 

Finance costs

10

22,400

17,965

 

Finance income

10

(867)

(1,804)

 

 


---------------

---------------

 

Operating cash flows before payment of employees'    end of service benefits and changes in working   capital

 

 

 

(43,045)

 

 

105,215

 

Payment of employees' end of service benefits

21

(7,765)

(3,835)

 

 

 

 

 

 

Changes in working capital:

 

 

 

 

Inventories before movement in provision

 

(1,308)

110,573

 

Proceeds from a related party

17

11,290

-

 

Due from a related party

17

-

(146)

 

Trade and other receivables before movement in   provision for impairment of trade receivables

 

15

 

265,516

 

(312,749)

 

Trade and other payables, excluding movement in   dividend payable

 

22

 

25,974

 

46,718

 

Derivative financial instruments

 

-

(358)

 

 


---------------

---------------

 

Net cash generated from/(used in) operating activities

 

250,662

(54,582)

 

 


=======

=======

 

 

27    Statutory Accounts

 

This financial information is not the statutory accounts of the Company and the Group, a copy of which is required to be annexed to the Company's annual return to the Companies Registration Office in Isle of Man. A copy of the statutory accounts in respect of the year ended 31 December 2012 will be annexed to the Company's annual return for 2012. Consistent with prior years, the full financial statements for the year ended 31 December 2012 and the audit report thereon will be circulated to shareholders at least 20 working days before the AGM. A copy of the statutory accounts required to be annexed to the Company's annual return to the Companies Registration Office in respect of the year ended 31 December 2011 has been annexed to the Company's annual return for 2011.

 

28      Directors' responsibilities statement

 

We confirm that to the best of our knowledge

 

The financial statements, have been prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities and financial position and profit or loss of the company and the undertakings included in the consolidation taken as a whole; and,

 

This announcement includes a fair review of the development and performance of the business and the position of the company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

 

Further information is available on the Company's website, www.lamprell.com.

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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