Lamprell looks to Aramco deal to brighten outlook as stock tumbles

Lamprell forecast revenues in the range of $370 to $390 million this year compared to the lower half of the $400 million to $500 million range it reckoned in March. (Courtesy Lamprell)
Updated 22 September 2017
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Lamprell looks to Aramco deal to brighten outlook as stock tumbles

LONDON: Lamprell hopes that the creation of a joint venture with Saudi Aramco will help to offset a muted earnings outlook that sent its stock tumbling.
The UAE rig builder cut its full-year forecast on Friday and warned that it did not expect revenue growth from potential contract awards until 2019.
That sent the stock of the London-listed company tumbling by more than 23 percent before partially recovering to trade more than 11 percent lower.
The company forecast revenues in the range of $370 million (SR1.4 billion) to $390 million this year compared to the lower half of the $400 million to $500 million range it reckoned in March.
It expects 2018 revenues to be about 10 percent lower.
Lamprell said it was continuing with a strategy review and “further operational efficiencies and geographical and sector diversification.”
The company’s bid pipeline rose to $3.1 billion at the end of June from $2.5 billion at the end of December, it said.
Lamprell struck a joint venture with Saudi Aramco, Bahri and HHI in May to establish and operate a fabrication yard in the Kingdom.
Once commissioned, the maritime yard will become one of the biggest in the region with 4.1 kilometers of quayside. It is expected to be partially operational by 2019 with full functionality reached by 2021, Lamprell said.
It could lead to the construction for 20 offshore drilling rigs over 10 years.
Lamprell CEO Christopher McDonald said: “The project will further strengthen our position in the region and will provide exposure to significant new opportunities in a key market for the energy industry.”
An extended period of oil price weakness has dampened demand for new oil rigs and hit regional rig builders and oilfield services companies such as Lamprell and Petrofac.
The company said that project completions and the slow pace of new contract awards brought yard activities to a “relatively low level.”
“There is significant profit recovery potential over time, but it is hard to predict the timing with any confidence,” said Investec.
Still, the company said it had started fabrication work on its flagship renewables contract for ScottishPower Renewables – the East Anglia One project.
The company also this year reached an agreement with Cameron, a unit of Schlumberger, ending a dispute over some jacking equipment.
It said that despite the row, the company still has a strong relationship with Schlumberger which has commissioned Lamprell to build two land rigs.


Goldman Sachs’ second quarter profit up 44 pct; CEO Blankfein to retire

Updated 10 min 14 sec ago
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Goldman Sachs’ second quarter profit up 44 pct; CEO Blankfein to retire

  • The New York-based bank said Tuesday that earnings reached $2.35 billion in the second quarter
  • Nearly all of Goldman’s businesses saw double-digit growth in the second quarter

NEW YORK: Goldman Sachs’ profits jumped 44 percent in the second quarter compared with a year ago, driven by the investment bank’s core franchises: advising companies on mergers, acquisitions and other deals, and its trading business.
The New York-based bank said Tuesday that earnings reached $2.35 billion in the second quarter, compared with $1.63 billion a year earlier. On a per-share basis, Goldman earned $5.98 a share, compared with $3.95 a share a year earlier, beating analysts’ forecasts of $4.65 a share.
Separately, Goldman said Chief Executive Officer Lloyd Blankfein will retire as of Oct. 1, and be replaced by David Solomon, the president and chief operating officer. Blankfein has been CEO since 2006.
Nearly all of Goldman’s businesses saw double-digit growth in the second quarter. Trading was particularly strong. Goldman’s institutional client services division, which contains the firm’s trading operations, posted net revenues of $3.57 billion in the quarter, up 17 percent from a year earlier.
Goldman’s trading performance can be fickle, driven by whether the market was volatile that quarter and whether the right sort of securities saw the right sort of movement. Like its competitor Morgan Stanley, which will report results Wednesday, Goldman has been looking to diversify its businesses, moving in recent years into consumer lending and consumer banking.
Goldman’s investment banking business also had a solid quarter, posting net revenues of $2.05 billion, which is up 18 percent from a year earlier. The firm saw both higher underwriting revenue, as well as revenue for advisory services.
The firm’s return on equity ratio, a closely watched performance gauge for banks like Goldman Sachs which measures how much money the bank earned with the money investors have lent it, was 12.8 percent in the quarter. Banks like Goldman try to keep that figure above 10 percent.
Company-wide net revenues were $9.4 billion in the quarter, also beating analysts’ expectations.
Goldman shares fell 0.8 percent to $229.25 in premarket trading.