GLDD president and CEO Lasse Petterson: “As expected, 2023 was a year of positive transition from a difficult 2022.”
Shares in Houston-headquartered Great Lakes Dredge & Dock Corporation (Nasdaq: GLDD) have been taking successful this morning. The dredging big reported a fourth quarter 2022 web lack of $31.2 million and a 2022 full 12 months web lack of $34.1 million. The web loss included an $8.1 million cost for the retirement of the 42-year previous hopper dredge Terrapin Island.
President and CEO Lasse Petterson commented, “The fourth quarter continued to be impacted by a considerably delayed bid market mixed with excessive inflation, important climate delays on initiatives within the Northeast, fewer excessive margin capital initiatives, dredging undertaking manufacturing points, increased than anticipated drydock prices, and the retirement of the Terrapin Island.
“We are adjusting to the present scenario by taking swift and proactive motion on value reductions and fleet changes. We have retired the 42-year-old hopper dredge, the Terrapin Island, and we’ve chilly stacked two main dredges as we look ahead to the bid market to achieve momentum in 2023. Correspondingly, we’re adjusting our common and administrative, and overhead value constructions to replicate the modified market situations and dredging fleet.
“Great Lakes ended the 12 months with $377.1 million of dredging backlog, which doesn’t embrace roughly $50.0 million {dollars} of efficiency obligations associated to offshore wind contracts. In addition, we ended the quarter with $584.7 million in open dredging choices pending award. The firm’s awarded work represents 33.1% of the fourth quarter bid market.
“Our fleet renewal program stays on price range with our mid-size hopper dredge, the Galveston Island, anticipated to be operational mid-year 2023 and her sistership, which will probably be named the Amelia Island, is anticipated to be delivered in 2025. The two multicats, the Cape Hatteras and the Cape Canaveral, will probably be operational in 2023, and we’ve already taken supply of three new scows.
“We are executing on our technique to enter the fast-growing U.S. offshore wind market. Construction of our U.S. flagged Jones Act-compliant inclined fallpipe vessel for subsea rock set up is on price range and anticipated to be delivered and operational within the first half of 2025. In 2022, Great Lakes was awarded rock set up contracts for the Empire Wind I and II initiatives by Equinor and BP, with set up home windows in 2025 and 2026. We are at the moment bidding a number of different offshore wind farm initiatives with rock installations deliberate for 2025 and past.
“To support our newbuild program, we successfully extended our revolving credit facility until July 2027 and increased its capacity to $300 million to complement our Unsecured Notes of $325 million which do not mature until 2029. We believe our balance sheet is well equipped to complete our new build and fleet renewal strategy.”
WHAT’S AHEAD FOR GLDD?
“As we begin 2023, we expect to see the dredging bid market pick up in the first half of the year.,” stated Petterson. “The port deepening and widening projects that were delayed in 2022 are expected to bid in the first and second quarters of 2023, with dredging anticipated to start in the second half of the year. We are also optimistic that one or two liquified natural gas (LNG”) initiatives may obtain last funding choice in 2023 with dredging to doubtlessly begin in second half of the 12 months and persevering with into 2024. We count on that the improved market situations, mixed with the fleet adjustment and price discount initiatives we’ve in place, will present improved ends in 2023 and past.”
