(Adds details, CEO comment, share movement)
By Arathy S Nair
Sept 22 (Reuters) - Oil rig builder Lamprell Plc cut its full-year forecast and said it did not expect revenue growth from potential contract awards until 2019 as lower activity levels continued to plague the industry.
Lamprell shares fell more than 23 percent to their lowest in nearly a year. The stock recovered partially and was down 11.6 percent at 0830 GMT.
Like its peers, Lamprell has been cutting costs as oil explorers have slashed spending and cancelled contracts to counter weak oil prices. The company is also expanding into renewable energy business to bolster its portfolio.
Any potential improvement in market conditions will not boost its business in 2018 due to a lag between better market conditions and project awards, said Lamprell, which earlier forecast a recovery in 2018.
The company now expects 2017 revenue of $370 million to $390 million, as it sees continuing low levels of walk-in work. Lamprell had forecast full-year revenue in the lower half of the $400 million-$500 million range in March.
The United Arab Emirates-based company expects 2018 revenue to be 10 percent lower than 2017.
With a 64.7 percent fall in revenue to $159.2 million in the first half of the year, Lamprell eked out a profit of $1.1 million from continuing operations, compared with a loss of $4.4 million a year ago.
Lamprell said its bid pipeline rose to $3.1 billion at the end of June from $2.5 billion at the end of December, on higher bidding activity in its core markets and new strategic initiatives in the renewable sector.
The company received a $225 million contract last year from ScottishPower Renewables for the fabrication of multiple jackets and piles for an offshore wind farm located in the UK waters of southern North Sea.
“Over a period, we could be adding about $3 billion a year of potential work in our bid pipeline as a result of the renewable initiative,” Chief Executive Christopher McDonald told Reuters.
However, brokerage Investec cautioned that the push into renewable space posed “higher execution risk” and investment in new strategic initiatives left little scope for further cost savings.
“There is significant profit recovery potential over time, but it is hard to predict the timing with any confidence,” said Investec, which lowered the stock to “hold” from “buy” and price target by 50 pence to 81 pence. (Reporting by Arathy S Nair in Bengaluru; Editing by Gopakumar Warrier)