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Lamprell blames $80m loss on East Anglia ONE

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Lamprell has reported a Net loss of $98.1m in its 2017 financial results which it claims was primarily driven by a loss of $80m on its work for the East Anglia ONE offshore wind farm project.

Lamprell was awarded a jacket fabrication contract for the project in November 2016. The scope included the fabrication of 60 jacket foundations from its construction yard in Jebel Ali, United Arab Emirates. Of the 60 jackets, Harland and Wolff (H&W) were subcontracted to deliver 24 from its facility in Belfast. Lamprell has completed 73% of its scope having delivered eight jackets and all 182 piles to its client in Vlissingen.

During the fabrication work the company claims it incurred significant additional costs relating to investment in staffing and equipment requirements, as well as significant additional shipping and subcontractor costs.

In its financial report the company stated constructive discussions with its client are ongoing to meet their expectations around the schedule but, as with any contract, liquidated damages exposure remains in case of delays.

The compnay further outlined that "lessons have been learned" and "various performance improvement opportunities" have been implemented to mitigate current project costs and to allow it to compete successfully on future projects.

Christopher McDonald, Chief Executive Officer for Lamprell, said: “2017 was my first full year as CEO and it has been a year of repositioning for Lamprell. It has also been dominated by the losses on the East Anglia One project where I am disappointed with our performance. The project involved a steep learning curve and since my arrival we have been implementing steps to transform our processes and increase our rigour in the bidding activities. With this in place, I continue to believe Lamprell is well positioned to be competitive in the future in this strategic sector, one which we believe offers significant long-term potential. Across Lamprell, we have taken concrete actions to adopt the lessons learned and to enhance the business for growth, both in our core rig market, through our investment in Saudi Arabia and the development of a new proprietary jackup rig design, and in new sectors like renewables and EPC(I) where we are investing in additional resources and improved bidding processes to compete successfully in these strategically-important sectors.”

The £2.5bn East Anglia ONE wind farm is the first of four projects in the East Anglia region to begin construction. It is being realised solely by ScottishPower Renewables and is located approximately 45km east of Lowestoft, UK. The 714MW array will feature 102 SWT-7.0-154 direct-drive wind turbines, each with a capacity of 7MW.

Pre-piling for the foundations is expected to start in the coming weeks with scour protection works already underway. Full commissioning is scheduled for 2020 and the project is expected to meet the energy demands of 500,000 British households annually.

For more information, please follow the links provided. Alternatively,
click here to 4C Offshore's interactive map of offshore wind farms.

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