UK-listed shipyard Lamprell is reorganising its business into three key verticals, as it aims to increase its focus on renewables and the energy transition and takes aim at a bid pipeline that has swelled to $6 billion.
The United Arab Emirates-based company is carrying out a “strategic reorganisation" of the group into three distinct business units: renewables, digital, and oil and gas.
The “evolved structure will provide the business with greater focus", as the company plans “to take full advantage” of multiple opportunities across its end markets, said chief executive Chris McDonald.
The three business units will “have different priorities and needs, from their distinct customer bases, bidding processes, yard requirements and capital requirements".
“This strategic reorganisation will enable the group to place greater focus on maximising the significant opportunities for each of the three business units,” Lamprell added.
Lamprell has been expanding its presence in the renewables industry over the past few years and has fabricated over 100 foundations for UK offshore wind farms.
The company sees strong potential for the offshore wind business, with the industry likely to attract total capital expenditure of $300 billion during the next five years.
Buoyed by opportunities in the offshore wind sector, the company’s bid pipeline has soared to $6 billion, out of which, $2.5 billion comes from the renewables sector, it said.
“We expect to see continued strong growth in renewables opportunities in the coming years, driven by rapid expansion in core markets and by the commercialisation of floating wind, which is expected to provide significant opportunities mid-decade onwards,” Lamprell said.
The company has been aggressively ramping-up its offshore wind operations.
Lamprell last year finalised a contract with the renewable energy unit of Subsea 7 for key components of a major wind farm project in the UK North Sea where French supermajor Total recently took a controlling stake.
The deal with Seaway 7 relates to the procurement and fabrication of 30 offshore wind turbine generator structures meant for the Seagreen offshore wind farm project.
The company described the contract as "very large", which it defines as having a value in excess of $150 million.
Lamprell said its Moray East offshore windfarm project has been operationally completed in September and all jackets have been installed offshore Scotland.
The company is also carrying out an expansion of its Hamriyah facility in the UAE, which will allow Lamprell to improve its “efficiencies and capacity in renewables fabrication,” as it progresses with the Seagreen project, it said.
Oil and gas business
While Lamprell is increasing its focus on renewables, its oil and gas business is also expected to continue playing a key role going forward.
The oil and gas business vertical will comprise the group's traditional activities in rig fabrication, rig refurbishment, onshore engineering, procurement and construction and other services, as well as its planned expansion into offshore EPC projects, as a part of Saudi Aramco’s long term agreement (LTA) contracts, it said.
“Oil and gas remains a significant part of the group's bidding pipeline in 2021 and demand is expected to increase in the medium-term as markets recover,” Lamprell added.
The digital business will involve key “technology and IP development teams", Lamprell said.
It also comprises Lamprell's partnerships with Injazat/G42, a digital developer backed by Mubadala Investment Company, and Akselos, a developer of simulation technologies.
The digital wing will "continue to advance proprietary technologies for industrial application, in areas such as asset integrity, engineering design, smart non-destructive testing, predictive maintenance and robotics,” the company said.
Lamprell also said on Thursday that its revenues last year are likely to be around $340 million, significantly higher than the previous year.
In 2019, the company reported revenues of $260.4 million, it said.
Net cash increased to $112 million from $71.4 million last year.
Lamprell also increased its backlog on a year-to-year basis to $520 million.