GLDD Reports Net Loss For Third Quarter
Great Lakes Dredge & Dock Corporation (GLDD) reported a net loss of $9.9 million for the third quarter on November 1; a year ago, the company reported net income of $13.8 million.
Revenue was $158.3 million, a decrease of $10.3 million from the third quarter of 2021. The lower revenue in the third quarter of 2022 was due primarily to lower domestic capital project dredging and maintenance dredging revenue, offset partially by higher coastal protection project revenue, GLDD said.
“We continue to see the effects from a significantly delayed bid market the last three quarters, which has impacted vessel utilization for 2022,” said Lasse Petterson, president and CEO. “In addition, the quarter was impacted by increased inflationary pressure, follow-on impact from second quarter site condition claims and some dredging project challenges.
“Great Lakes has delivered strong performance over the past years, we have demonstrated our ability to manage through a challenging environment, and we believe the current challenging conditions will improve over the next quarters,” he said.
The company reported it had multiple dredges in regulatory drydocking or not working during the third quarter.
“The bid market did start to gain momentum in the third quarter, and Great Lakes was awarded $338.9 million in dredging projects and open options, ending the quarter with $452.6 million of dredging backlog, which does not include approximately $50 million of performance obligations related to offshore wind contracts,” Petterson said. “In addition, we ended the quarter with $625.7 million in open options pending award. This indicates that the bid market is in the process of recovery from the bidding difficulties that we have seen in 2022. The company’s awarded work represents 50.1 percent of the third quarter bid market.”
Petterson said GLDD’s new-build program is on schedule, with the hopper dredge Galveston Island expected to be ready in the first half of 2023 and its sister ship ready in the first half of 2025. Both are being built by Conrad Shipyard.
“The delivery of the Galveston Island will provide us with added capacity and the opportunity to potentially retire some of our older dredges, which is expected to have a positive impact to our overall margins in the coming years,” he said.
“As we enter the fourth quarter, we expect results to improve as our fleet is expected to be busy this quarter and in the first quarter of 2023,” Petterson said. “We believe the fundamentals are in place for a return to a normal dredging market in 2023 and that the ongoing demand for dredging, combined with our strategy for overall improvement, is a solid path to long term growth.”
GLDD said it continues to see strong support from the Biden administration and Congress for the dredging industry. Both the Senate and House have passed versions of the Water Resources Development Act, and the legislation is expected to be conferenced and signed into law before the end of the year. Likewise, both houses of Congress have passed Corps of Engineers budget proposals that indicate the final amount will likely be a record.
“This increased budget and the funding from the Biden administration’s infrastructure bill support our expectation of a strong market entering 2023,” the company said.
