StockMarketWire.com - Lamprell revealed several measures to cut costs after withdrawing guidance amid signs of deceleration and delays in some awards due to the ongoing Covid-19 crisis.

'Bidding activity continues in both of our end markets of oil & gas and renewables but we are seeing signs of deceleration and delays in some awards,' the company said. 'Given the macro environment uncertainty, we withdraw our previously announced 2020 revenue guidance.'

The company said its 2019 year end backlog stood at $470.1m with approximately $275m scheduled to run off in 2020.

Having reviewed its current operational footprint against medium term fabrication requirements, the company said it had decided to consolidate its operations within one yard.

The Jebel Ali facility had been mothballed from January 2020. The Sharjah facility, which currently hosted some of the work on the Moray East project, would be closed upon its completion later this year.

But the Hamriyah yard, its largest facility, continued to operate, offering various expansion opportunities should the group require additional space.

The measures translated into an approximately $23m reduction in overheads for 2020.

The restructuring would result in a non-cash impairment charge of assets in Sharjah of approximately $13.2m in the 2019 financial statements. In 2020 there would be an estimated one-off charge of $7.5m.

The company also outlined other efforts to preserve cash including cutting jobs and reducing fees, salaries and allowances for its board, senior management and all of its professional staff by 25% for the next six months.

'We expect these measures to save approximately $10m in 2020, and we will continue to consider scope for further action as the crisis develops,' the company said.

At 10:01am: [LON:LAM] Lamprell PLC share price was +0.7p at 12.7p



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