Cape takes one-off charge from Arzew project

Problems at Cape's GL3-Z LNG (liquefied natural gas) Project in Arzew, Algeria appear to be worse than originally thought.

The energy and mineral resources services provider has revealed that its full-year profits will be held back by a £14m charge related to the project.

MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

After an operational audit of the project in mid-May, additional costs were identified, with are currently expected to produce a significant loss.

"The board has instigated a plan to mitigate the potential losses on the Arzew Project including the injection of a new project team, the introduction of additional skilled workforce and the rigorous application of Cape processes," the firm said.

However, in respect of current and estimated future losses, the group expects to take a one-off charge of £14m in the first half of the year ending June 30th.

The company reassured that its previously issued revenue guidance for the full year remains unchanged.

MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.