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.
Lamprell looks to Aramco deal to brighten outlook as stock tumbles
Lamprell looks to Aramco deal to brighten outlook as stock tumbles
Six vital sectors drawing US investors to Saudi Arabia
RIYADH: Six vital sectors are drawing US investors, including entrepreneurs and small businesses, to Saudi markets as the Kingdom continues to develop its regulatory framework and foster innovation, Deborah Lehr, interim CEO of the Meridian International Center, said in an interview with Al-Eqtisadiah.
Lehr, who is heading a trade and investment delegation to Saudi Arabia in her capacity as an economic advisor affiliated with the White House, stated that the six sectors include hospitality, luxury goods, and tourism, as well as culture, technology, and others.
She noted that Saudi Arabia has significantly eased the process for foreign companies to establish a presence, a critical factor for small and medium-sized enterprises that may not yet have the scale to expand, making the Kingdom an attractive market for both large and innovative small companies.
Following the success of the Saudi Crown Prince’s recent visit to Washington, she said, Meridian organized a US trade delegation to explore tangible and growing opportunities for US businesses in Saudi Arabia.
Translating Vision 2030 priorities into real partnerships
The delegation, which included representatives from Delta, Intel, Pernod Ricard, and Basilinna, among others, met a wide range of government officials, private-sector leaders, and entrepreneurs to explore how US companies can participate in Saudi market growth.
According to Lehr, discussions were practical and forward-looking, focusing on translating Vision 2030 priorities into real business partnerships.
She highlighted that most of the companies in the delegation were large enterprises operating across various sectors, underscoring the diversity of businesses active in Saudi Arabia.
She pointed out that these companies joined the mission because they see the potential to scale their operations in Saudi Arabia — whether by increasing flight routes, enhancing airport security, offering advisory services to firms entering the Saudi or US markets, or exploring opportunities in the beverage sector.
Relationship increasingly taking economic dimension
Lehr hinted to the Saudi minister of investment that the US-Saudi relationship is also increasingly taking on an economic dimension.
She noted that bilateral trade stands at around $40 billion, compared with Saudi-China trade of approximately $110 billion, highlighting untapped growth potential between the two countries, especially as diplomatic and political ties continue to strengthen.
She said the reforms present valuable opportunities for US companies across multiple sectors, including advanced manufacturing, technology and logistics, as well as aviation, tourism and culture, alongside a wide range of services.
With the regulatory environment being modernized and business stability increasing, the scope of US investment is set to expand further. More importantly, she added, the greater the engagement of companies, the stronger and more resilient the bilateral relationship will become in the years ahead.
She emphasized that Saudi Arabia has undergone deep social and economic transformations, including increased female participation in the workforce and entrepreneurship, while emerging as a cultural hub with a thriving arts scene and new platforms for creative expression.
Lehr further said that the world will witness growing global interest from companies and institutions eager to be part of Saudi Arabia’s remarkable transformation, amid increasing openness and a willingness to share its history, culture, and ambitions with the world.
Saudi agenda offers tangible opportunities
Lehr highlighted that during her visit, she focused on three key economic priorities. The first is Saudi Arabia’s strategic shift of capital from the oil and gas sector toward technology and innovation, a move that signifies not only economic diversification but also the Kingdom’s emergence as a globally competitive player.
Second, the Kingdom’s reform agenda has provided tangible opportunities for foreign companies, reflecting real changes that facilitate international participation in Saudi growth.
The third point she focused on was that the strong geopolitical and economic ties between the US and Saudi Arabia have bolstered investor confidence. As the Kingdom strengthens its global role and deepens relationships with partners such as the US, its attractiveness for long-term foreign direct investment continues to grow.
She noted that sectors such as artificial intelligence, gaming and entertainment, advanced manufacturing, and the technology ecosystem are areas in which the US has strong competitive advantages, at a time when US firms are seeking new markets that offer stability and long-term potential.
Giga-projects in Saudi Arabia, including AlUla and NEOM, have attracted global attention and highlighted emerging opportunities across the country.
These projects demonstrate the Kingdom’s ambitious vision and its creation of entirely new sectors rather than merely expanding existing ones.
