Great Lakes Dredge & Dock Reports Smaller Loss, Improving Market
Great Lakes Dredge & Dock Corporation (GLDD) reported a net loss of $6.2 million for the third quarter on revenues of $117.2 million. A year ago, the company reported a net loss of $9.9 million for the third quarter of 2022, on revenues of $158.3 million.
“The third quarter, as expected, was a challenging quarter due to vessel drydocks and idle equipment due to market delays from 2022 and the first half of 2023,” said Lasse Patterson, president and CEO. “Despite the challenges, we continued to bid on projects and build a solid backlog for the fourth quarter and for 2024. Great Lakes ended the quarter with $1.03 billion of dredging backlog, which does not include approximately $50.0 million of performance obligations related to offshore wind contracts and $225.0 million in low bids and options pending award.”
GLDD’s reported dredging backlog of just over $1 billion was sharply higher than the $377.1 million as of December 31, 2022.
“At the end of the third quarter, 71.2 percent of Great Lakes’ backlog consists of capital projects,” Patterson said. “In the third quarter, we added $519.7 million in capital projects, which includes two liquefied natural gas (LNG) projects, the Brownsville Ship Channel project for Next Decade Corporation’s Rio Grande LNG project and the Port Arthur LNG Phase 1 project for Marine Dredging and Disposal.
“The Rio Grande Brownsville LNG project is the largest project undertaken in Great Lakes’ history. Our proven performance and safety culture allows us to support the growth of LNG exports in the U.S., which is a necessity in balancing energy affordability and overall sustainability. In addition, we added $235.6 million in maintenance and coastal protection projects to our dredging backlog in the third quarter,” he said.
“As we have navigated the challenges from 2022 and have seen the ramp up in bidding in 2023, we have remained focused on cost reductions and fleet adjustments, including temporary cold-stacking of vessels, and we have adjusted our general and administrative, overhead cost structures and dredging fleet to reflect the changed market conditions coming into 2023,” Patterson continued. “As we have stated previously, cold-stacked vessels can easily be reactivated as the market continues to improve. One of our recent project wins will allow us to reactivate a previously cold-stacked vessel in the near future.
“In addition, our newest hopper dredge, the Galveston Island, is expected to be operational in the fourth quarter of 2023 and her sister ship, the Amelia Island, is expected to be delivered in 2025. Also, we took delivery of our two multi cats, the Cape Hatteras and the Cape Canaveral, which support our strong safety culture and provide Great Lakes the ability to dredge with enhanced operating efficiencies needed to maintain our shorelines and waterways.
“We believe the improved dredging bid market combined with our fleet adjustments and our cost reduction and production initiatives will position us well to achieve improved results into 2024 and beyond,” he said.
GLDD said it is executing on its strategy to enter the U.S. offshore wind market. President Joe Biden attended the steel-cutting ceremony for the company’s offshore wind rock installation vessel, the Acadia; delivery of that vessel is expected in 2025. GLDD also signed the first ever subcontract for procurement of rock with Carver Sand & Gravel LLC, a quarry in New York state.
Bid Market
The company said that the bid market, not including LNG or offshore wind projects, was $1.8 billion for the nine months ending September 30; of that market, GLDD won 31 percent, the company said. The total capital bid market for port improvement projects through the third quarter totaled $459.2 million, of which 39 percent was won by Great Lakes, the company said. Several major previously delayed capital port improvements—including Sabine, Houston and Mobile—are expected to bid before the end of the year, GLDD said.
