LONDON (Reuters) - Oil rig maker Lamprell LAM.L said revenue would fall slightly over the next two years, sending its shares down nearly 10 percent, as the British firm focuses on winning new orders after a disastrous 2012.
Last year was described by Chief Executive James Moffat as a “turning point” which saw the Dubai-based rig maker swing back into profit, and he said he was “encouraged” by the company’s performance and bidding pipeline.
Lamprell expects revenue for 2014 to come in at around $1 billion, compared to $1.1 billion last year, with margins remaining similar, Chief Financial Officer Joanne Curin said.
The firm has taken a “back to basics” approach since Moffat took over last year following a $111 million loss in 2012 - described as the most challenging year in Lamprell’s history - as expansion into wind turbine vessels was hit by operational difficulties and led to a series of profit warnings.
Challenges of turning the business around hit the ability to attract new business resulting in a weaker order backlog which dropped to $0.9 billion at the end of 2013.
Moffat said securing contracts in the next few months would be crucial in order to beat what he described as a “conservative” outlook for this year, adding that Lamprell was down to the final stage of winning three major new bids.
The company reported pre-tax profit of $40 million for last year ahead of Thomson Reuters I/B/E/S consensus of $23.3 million.
Analysts at JP Morgan said the results exceeded their expectations in a note to clients, adding that the company appeared to be “having some success with cost control measures.”
Reporting by Stephen Eisenhammer; editing by Keith Weir and Louise Heavens
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