GLDD Reports Net Loss For First Quarter
Great Lakes Dredge & Dock Corporation (GLDD) reported a net loss of $3.2 million for the first quarter of 2023, on revenues of $158 million. A year ago, the company reported a net profit of $11.1 million on revenues of $194.3 million.
It was the fourth consecutive quarter of net losses for GLDD, although this report was far better than the $31.2 million loss reported for the fourth quarter of 2022. Company President and CEO Lasse Petterson noted the improvement in his comments.
“We reported improved results in the first quarter of 2023, showing improvements in gross profit margins and adjusted EBITDA [earnings before interest, taxes, depreciation and amortization] from the prior three quarters,” he said. “Despite facing continued challenges related to weather delays in the Northeast and a lower-than-normal amount of capital work, we ended the quarter with revenues of $158 million and adjusted EBITDA of $10.2 million.”
The company has also been focusing on cutting costs, Petterson said.
“We have taken swift and proactive action on cost reductions and fleet adjustments,” he said. “Last year we retired the 42-year-old hopper dredge, the Terrapin Island, and we currently have cold-stacked two major dredges and support equipment as we continue to watch the bid market. Correspondingly, we are adjusting our general and administrative, overhead cost structures and dredging fleet to reflect the changed market conditions, which have already led to substantially reduced costs in 2023.”
The bid market is improving as well, he said.
“In the first quarter of 2023, Great Lakes’ total bid market reached over $300 million, which is approximately $125 million greater than the first quarter of 2022. The port deepening and widening projects that were delayed in 2022 are starting to enter the market. The first quarter saw one capital project bid, and April 2023 included one more capital project.
“Great Lakes ended the quarter with $327.1 million of dredging backlog, which does not include approximately $50 million of performance obligations related to offshore wind contracts. In addition, we ended the quarter with $516.9 million in low bids and options pending award. The company’s awarded work during the quarter represents 31.7 percent of the first quarter bid market.
“Not included in the first quarter backlog is the Freeport Capital Port Deepening project, on which Great Lakes was low bidder in April for approximately $160 million, which is the third-largest domestic capital project Great Lakes has won in its history. We are also optimistic that one or two liquefied natural gas projects on which we are low bidder could achieve final investment decision in 2023 with dredging to potentially start in the second half of the year and continuing into 2024. We expect that the improved market conditions, combined with the fleet adjustment and cost reduction initiatives we have in place, will provide improved results in 2023 and beyond,” Patterson said.
GLDD said construction of its U.S.-flagged Jones Act-compliant inclined fallpipe vessel for subsea rock installation is on budget and expected to be delivered and operational in the first half of 2025. Named Acadia, the vessel will serve the U.S. offshore wind market. In 2022, Great Lakes was awarded rock installation contracts for the Empire Wind I and II projects by Equinor and BP, with installation windows in 2025 and 2026. The company is currently bidding several other offshore wind farm projects with rock installations planned for 2025 and beyond.
