British oil rig builder Lamprell sees full-year revenue slipping to the bottom of its guidance range because of stagnant oil sector investment and losses at a windfarm project, it said on Wednesday, sending its shares sharply lower.
The company said that total losses on its East Anglia One (EA1) offshore windfarm project would be about $80 million because of mounting costs for unplanned staffing and equipment requirements.
"We anticipated a challenging 2017 given the weakness of our end markets, and this was compounded by issues we have experienced on the EA1 Project," Chief Executive Christopher McDonald said.
Shares in the company slumped to their lowest in a month, tumbling more than 26 percent to 62.1 pence in heavy trade, before closing 16.6 percent down at 71.9 pence.
Lamprell, which runs three rig-building yards in the UAE, expects revenue for 2017 to be at the lower limit of its forecast range of $370 million to $390 million, it said in a statement.
The company has been cutting costs as oil explorers have
reduced spending and cancelled contracts to cope with weak oil prices. It had flagged 2017 as its "toughest year yet".
Lamprell sees its net cash position trending downwards in 2018, hurt by its investment in the Saudi Maritime Yard and payment for inventory and the cash impact of remaining losses on the EA1 Project.
The company said it expects the market to remain challenging in 2018 because of low activity in the oil industry
(Reporting by Hanna Paul; Editing by Susan Fenton and David Goodman)