Lamprell Announces Updates on Performance for 2017, and on Windfarm Project (EA1)
Thursday 25 January 2018
As previously announced, the issues on the EA1 Project will significantly impact the Group's profitability in 2017, with total losses on the EA1 Project to completion estimated to be approximately US$80 million, which will be booked in full in 2017. The additional costs on the project have been caused by a number of variable factors including investment in further, unplanned staffing and equipment requirements, as well as significant additional shipping and subcontractor costs. This forecast loss on the project does not include any potential liquidated damages. Lamprell remain in constructive discussions with their client and are confident of meeting their expectations around the delivery schedule requirements.
Operationally, Lamprell are making good progress on the EA1 Project. The first shipment of part-assembled jackets is well on its way to Belfast for final assembly by Harland & Wolff. The first shipment of 8 fully-assembled jackets has been loaded out from our Jebel Ali facility and the vessel will set sail for the client's facility at Vlissingen in the Netherlands shortly. The final load of piles is also in the process of being transported to Vlissingen in accordance with the project schedule.
While the EA1 Project has been challenging, subject to the losses, Lamprell are going to significant lengths to deliver a successful outcome for our client on the project. In order to rectify the challenges on the EA1 Project, they have strengthened our capabilities in certain key areas including bidding, risk and change management. This has resulted in some personnel changes to improve their competency in these areas.