Harland & Wolff Group Holdings PLC Methil Update (2187Q)
17 February 2023 - 6:00PM
UK Regulatory
TIDMHARL
RNS Number : 2187Q
Harland & Wolff Group Holdings PLC
17 February 2023
17 February 2023
Harland & Wolff Group Holdings plc
("Harland & Wolff" or the "Company")
Methil Update
Harland & Wolff Group Holdings plc (AIM: HARL), the UK
quoted company focused on strategic infrastructure projects and
physical asset lifecycle management, announces that, further to the
announcement made on 30 December 2022 in relation to the
termination of the Saipem project, negotiations have now
successfully concluded with Saipem. The contract value has been
finalised at GBP16m, representing approximately 70% of the contract
value as per the deed of variation signed in September 2022 as part
of descoping from eight jackets to four. The entire amount has now
been paid in full and final settlement of the contract.
Further to additional contract wins and workload emerging in the
Belfast facility's fabrication halls, some of the fabrication work
for the Cory Barges contract will now be moved across to Methil. It
is expected, subject to client approval, that Methil will commence
fabrication on four barges in tandem within the next two weeks, in
line with the Company's strategy of operating across multiple
facilities and balancing work as well as skill sets between the
yards.
Having completed the contract settlement with Saipem in its
entirety, the Company will undertake a process of rationalising the
Methil facility's workforce to approximately 115 core personnel in
order to align the Company's resources and cost base with the level
of work being undertaken at the site whilst protecting its margins.
Given the typical longer-term nature of contracts within the
renewables and defence, the Company continues to ensure that its
workforce is appropriately positioned to execute on near term
requirements.
As the Company sets it sights on 2024 and beyond, Harland &
Wolff expects the renewables market to demand more local
fabrication capacity in the UK than is currently available. The
Company considers that the lead time to secure contracts in the
renewables space takes approximately 12 - 36 months and a number of
such tenders have already been submitted for additional work at
Methil over the mid-to longer term. Meanwhile, the Company is also
advancing on a pipeline of nearer term smaller projects which it
expects to undertake over the coming months.
John Wood, Group Chief Executive Officer of Harland & Wolff
comments:
"The Saipem project was the first project to arrive in Methil
after our acquisition of the facility. With the previously
announced delays and the changed economic position of this project,
it was in the Company's best interests to draw the project to a
mutually acceptable close. The project has been a helpful learning
curve for the business in this environment and we will take the
lessons learnt forward into our next major project. In the
meantime, the teams are focusing on constructing barges whilst
contract discussions and negotiations advance for another large
project. In the interim, the Company is focused on progressing the
Company's pipeline of opportunities across its different sites and
markets and remains steadfast in its approach to executing on
contracts which maintain strong and attractive margins."
This announcement contains inside information.
Harland & Wolff Group Holdings plc +44 (0)20 3900
John Wood, Chief Executive Officer 2122
Seena Shah, Head of Marketing & Communications investor@harland-wolff.com
media@harland-wolff.com
Cenkos Securities plc (Nominated Adviser
& Broker)
Stephen Keys / Callum Davidson / Dan Hodkinson
(Corporate Finance) +44 (0)20 7397
Michael Johnson (Sales) 8900
----------------------------
Liberum Capital Limited (Joint Broker)
Nicholas How / Edward Mansfield / Lucas +44 (0)20 3100
Bamber / Antonia Brown 2000
----------------------------
About Harland & Wolff
Harland & Wolff is a multisite fabrication company,
operating in the maritime and offshore industry through five
markets: commercial, cruise and ferry, defence, energy and
renewables and six services: technical services, fabrication and
construction, decommissioning, repair and maintenance, in-service
support and conversion.
Its Belfast yard is one of Europe's largest heavy engineering
facilities, with deep water access, two of Europe's largest
drydocks, ample quayside and vast fabrication halls. As a result of
the acquisition of Harland & Wolff (Appledore) in August 2020,
the company has been able to capitalise on opportunities at both
ends of the ship-repair and shipbuilding markets where there will
be significant demand.
In February 2021, the company acquired the assets of two
Scottish-based yards along the east and west coasts. Now known as
Harland & Wolff (Methil) and Harland & Wolff (Arnish),
these facilities will focus on fabrication work within the
renewables, energy and defence sectors.
In addition to Harland & Wolff, it owns the Islandmagee gas
storage project, which is expected to provide 25% of the UK's
natural gas storage capacity and to benefit the Northern Irish
economy as a whole when completed.
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