Another red ink quarter at GLDD

GLDD president and CEO Lasse Petterson: “The third quarter, as expected, was a challenging quarter."

Shares in America’s largest provider of dredging services, Houston-headquartered Great Lakes Dredge & Dock Corporation (NASDAQ: GLDD), fell by 13.6% Tuesday after the company reported third quarter results that included a net loss of $6.2 million.

Third quarter 2023 highlights

• Revenue was $117.2 million for the third quarter
• Total operating loss was $5.1 million for the third quarter
• Net loss was $6.2 million for the third quarter
• Adjusted EBITDA was $5.3 million for the third quarter

“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 GLDD president and CEO Lasse Petterson. “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.

“At the end of the third quarter, 71.2% of Great Lakes’ backlog consists of capital projects. In the third quarter, we added $519.7 million in capital projects, which includes two liquified 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 export 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.”

Petterson said the company has remained focused on cost reductions and fleet adjustments, including temporary cold stacking of vessels, and has adjusted its general and administrative, overhead cost structures and dredging fleet to reflect the changed market conditions coming into 2023.

“As we have stated previously, cold stacked vessels can easily be reactivated as the market continues to improve,” said Petterson. “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 sistership, 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 continued.

Petterson went on to say that the company is executing on its strategy to enter the U.S. offshore wind market. You can read more of what he had to say on that and read the company’s full operational update in its full release.

• Download the GLDD release HERE

• If you want to dig a little deeper, you can read a transcript of yesterday’s GLDD conference call with financial analysts HERE