GLDD ends year with $1.04 billion backlog
Written by Marine Log Staff
GLDD president and CEO Lasse Petterson: “As expected, 2023 was a year of positive transition from a difficult 2022.”
Houston-headquartered dredging giant Great Lakes Dredge & Dock Corporation (Nasdaq: GLDD) yesterday reported financial results for the quarter and year ended December 31, 2023. The numbers seemed to please investors, with the company’s share price up by 17.8% at the end of the trading day.
HIGHLIGHTS
Fourth quarter 2023 results
- Revenue was $181.7 million
- Total operating profit was $30.5 million
- Net income was $21.6 million (includes $5.6 million gain related to the termination of an offshore wind contract)
- Adjusted EBITDA was $40.8 million (includes $7.4 million gain related to the termination of an offshore wind contract)
Full year 2023 results
- Revenue was $589.6 million
- Total operating profit was $28.2 million
- Net income was $13.9 million (includes $5.6 million gain related to the termination of an offshore wind contract)
- Adjusted EBITDA was $73.0 million (includes $7.4 million gain related to the termination of an offshore wind contract)
RECORD BACKLOG
“We ended the year strong with solid fourth quarter results,“ said GLDD president and CEO Lasse Petterson. “As expected, 2023 was a year of positive transition from a difficult 2022 and we ended the year with a record backlog of $1.04 billion, improved performance and stronger financial results.”
“With a record 2023 U.S. Army Corps of Engineer’s budget of $8.66 billion, the bid market gained momentum over the course of the year resulting in 2023 returning to a more robust and diverse bid market, particularly in our capital and coastal protection target markets. The dredging market saw seven bids for major port improvement projects. Great Lakes ended the year with 71% of our backlog in capital projects with four major awards in 2023 which included the Freeport Deepening Project and the Sabine-Neches Waterway Channel Improvement Project. Also in 2023, Great Lakes was awarded two large liquified natural gas (LNG) projects, the Port Arthur LNG Phase 1 project for Marine Dredging and Disposal and the Brownsville Ship Channel project for Next Decade Corporation’s Rio Grande LNG project, which is the largest project undertaken in Great Lakes’ history. We continue to tender bids on several LNG projects to diversify and expand our client base.
“As we have navigated challenging market conditions and have seen the ramp up in bidding in 2023, we have remained focused on cost reductions and fleet adjustments, which included scrapping the Terrapin Island in 2022 and retiring the Dredge 53 in 2023. In addition, we have adjusted our general and administrative and overhead cost structures accordingly to support our strategic initiatives.
“During 2023 we made significant progress on our newbuild program, and we remained resolute in our long-term growth strategy with offshore wind. As part of our new build program, we have taken delivery on our newest 6,500-cubic-yard-capacity hopper dredge, the Galveston Island. Her sistership, the Amelia Island, is expected to be delivered in 2025. These dredges will work on projects that redevelop and improve our shorelines, which are subject to continual damage due to storms, rising waters and the effects of climate change. Also in 2023, 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.
OFFSHORE WIND
“We continued to execute our strategy to enter the U.S. offshore wind market. On July 20, 2023, we were honored to have President Biden attend the steel cutting ceremony for Great Lakes’ offshore wind rock installation vessel, the Acadia, the first and only U.S.-flagged Jones Act compliant, inclined fallpipe vessel for subsea rock installation, which marks another step forward as construction begins with expected delivery in 2025. In addition, Great Lakes signed the first ever subcontract for procurement of rock with Carver Sand & Gravel LLC, a U.S. quarry in the state of New York. Both milestones solidify our entry into the offshore wind market and will support Great Lakes’ awarded rock installation contract for Empire Wind I with an estimated installation window in 2025. In December 2023, Great Lakes was awarded another rock installation contract to perform subsea rock cable protection, a new utilization for our new vessel, the Acadia, on an offshore wind project off the East Coast of the United States.
“Towards the end of 2023 we saw several cancellations of Power Purchase Agreements (“PPA’s”) that were entered into in 2018 and 2019, as inflation and interest rate hikes eroded the profitability of these PPA’s. This led our clients, Equinor and BP, to terminate our Empire Wind II contract with them and reset their plan for the related wind farm. Our fourth quarter net income includes an approximately $5.6 million gain related to the terminated contract. Great Lakes may have the opportunity to re-tender this project, if Equinor re-bids their PPA for this development.
“We continue to pursue and bid on a number of other offshore wind farm projects, both domestically and internationally, with rock installations planned for 2026 and beyond. We expect that offshore wind will play a crucial role in helping the U.S. meet its decarbonization and clean energy goals and we believe the offshore wind power generation market offers Great Lakes long-term diversification with a strong opportunity for growth.
“As we enter the new year, we anticipate that the dredging bid market will remain robust and with our record backlog, improved fleet and strategic initiatives we believe the company is well positioned for the future.”
- Full GLDD release HERE
- Transcript of earnings call with analysts HERE
Categories: Dredging, Inland and Coastal, News
