Lamprell to operate only one yard
Written by Nick Blenkey
United Arab Emirates based offshore fabrication specialist Lamprell plc is consolidating its operations in one yard. “At least for the time being,” it says.
As part of what Lamprell calls its “self-help program,” the group’s Jebel Ali, Dubai Yard, has been mothballed since January. Now its Sharjah yard will also be closed once it completes work that is currently underway for the Moray East, Scotland, offshore wind farm.
Lamprell says that its largest facility, the Hamriyah yard, continues to operate, offering various expansion opportunities should the group require additional space.
“These actions allow for the group to gradually grow fabrication volumes whilst significantly improving efficiency and reducing its cost base,” says Lamprell, adding that they are “associated with significant headcount and allowance reductions, most of which have already been implemented,” and translate into an approximately $23 million reduction in overheads for 2020, of which over 90% relates to cash overheads.
Subject to audit, the restructuring will result in a non-cash impairment charge of Intangible and Immovable assets in Sharjah of approximately $13.2 million in the 2019 financial statements. In 2020 there will be an estimated one-off charge of $7.5 million which relates to the demolition costs in Sharjah and staff termination costs.
Lamprell is also planning for low levels of critical-only capital expenditure at its facilities, with a total value below $10 million in 2020.
The group says it has been taking numerous steps since February in light of the increasing threat of the COVID-19 virus and has a program to screen and protect its workforce, clients and contractors on site. aMost of our corporate and administration functions are working
remotely wherever possible, with engineering and fabrication activities in Hamriyah and Sharjah moderately affected by lockdown and social distancing measures in the UAE.
“All works, including two IMI rigs and the Moray East project, continue with the first jackets delivered to the client on time and on budget,” says Lamprell.
