Contract Win - SeaRose Upgrade

Harland & Wolff Group Holdings PLC

20 October 2023

 

This announcement contains inside information.

20 October 2023

Harland & Wolff Group Holdings plc

("Harland & Wolff" or the "Company")

£61 million contract award - SeaRose FPSO Mid-Life Upgrade

Harland & Wolff Group Holdings plc (AIM: HARL), the UK quoted company focused on strategic infrastructure projects and physical asset lifecycle management, is pleased to announce that Cenovus Energy Inc. ("Cenovus") has awarded the mid-life upgrade contract of the SeaRose Floating Production Storage and Offloading ("FPSO") vessel to Harland & Wolff (Belfast) Limited. This contract follows from the Letter of Intent that was previously announced by the Company on 31 July 2023. Cenovus Energy is an international integrated oil and natural gas company headquartered in Calgary, Canada, with a market capitalisation of circa CA$54bn.

The base contract value is approximately £61 million. The vessel is expected to arrive in in the first quarter of 2024 and will be in the Building Dock for a period of more than three months.

A number of pre-arrival works have already commenced, including inspections, procurement of steel, fabrication of customised blocks and other dry dock operations. The Company is to commence certain fabrication works in FY 2023 so that it is fully prepared to commence refurbishment and upgrade works as soon as the vessel arrives next year. Upon completion of pre-arrival workstreams, the Company is expected to generate revenues of approximately £10 million in FY 2023, with the outstanding balance expected to be received in FY 2024. At its peak, it is estimated that there will be circa 1,000 personnel working on the vessel including the Company's staff and subcontractors.

Revenues from this contract are included within management's revenue expectations for the Group to achieve in FY2023 and FY2024, being £100m and £200m respectively.

John Wood, CEO of Harland & Wolff Group Holdings plc, comments:

"I am delighted that Cenovus has chosen Harland & Wolff as its preferred yard to undertake the mid-life upgrade of the SeaRose. The vessel first came into Belfast in 2012 so we will use our existing knowledge of this FSPO, in addition to applying the latest technologies and innovations for these kinds of highly specialised projects.

This is a significant win within our non-defence portfolio from a global, blue-chip energy group and I am pleased that we are gaining a reputation as a go-to yard for large and complex programmes. With an estimated 1,000 personnel on-site, this project will allow for further synergies in our execution, leveraging off of personnel, skill sets and supply chains that will support the upcoming FSS Programme."

For further information, please visit  www.harland-wolff.com  or contact:

Harland & Wolff Group Holdings plc John Wood, Chief Executive Officer Arun Raman, Chief Finance Officer	[phone] [e-mail]    [e-mail]
Cavendish Securities plc (Nominated Adviser & Broker) Stephen Keys / Callum Davidson / Dan Hodkinson (Corporate Finance) Michael Johnson (Sales)	[phone]
Liberum Capital Limited (Joint Broker) Nicholas How / Edward Mansfield	[phone]
Radnor Capital Partners (Investor Relations) Neville Harris / Joshua Cryer	[phone]

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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