- Lamprell has welcomed recent change in oil and gas market sentiment but believes 2017 will prove a particularly cautious environment and will continue to maintain tight control over expenditure.

In a pre-close trading update Lampress said it has retained its focus on operational performance and, during 2H 2016, three rigs had been delivered on time, with the three further rigs currently under construction in its Hamriyah yard progressing to plan for delivery in the first half of this year.

The update continued: "The group's strong safety performance continued with the Jebel Ali yard achieving over 15 million manhours and over 1,500 days without a Day Away From Work Case.

"Our safety track record strengthens our competitive position with top tier clients. Lamprell was also recognised by being awarded a regional Corporate Health and Wellness Award for a third consecutive year."

Lamprell said it has adapted to market pressures by continuing its programme of cost-cutting in overheads.

It aid that following the announcement in May, the group had undertaken a further 20% reduction in its administrative staff headcount which included some redundancies at the senior management level.

It added: "Further, as several large projects have progressed to delivery or final stages of construction, Lamprell has released the related yard workforce, resulting in an overall reduction in headcount to around 4,000 people at the end of 2016.

"While making these reductions, we have deliberately retained our core competitive strengths, to ensure that Lamprell is well-positioned as the market recovers.

"As expected, 2016 saw lower levels of walk-in work than the previous year.

"Most of the rigs stacked in Lamprell's facilities throughout the year remained inactive, having generated only limited refurbishment revenue. Consequently, Lamprell's revenue for the year is expected to be approximately US$700m."

Executive chairman John Kennedy said: "The board recognises and welcomes recent change in oil & gas market sentiment and the likelihood of stronger product pricing in 2017, especially as the year elapses.

"However, we also recognise that all our customer 2017 capital budgets are already established and in place, and that there is little expansive flexibility in the associated expenditures.

"For these reasons, the company continues to believe that 2017 will prove a particularly cautious environment, and will continue to maintain tight control over expenditure and expenses and, more especially, continue to position Lamprell for work in future years."

Lamprell will announce its full year 2016 financial results on 24 March.

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