GLDD earnings take hit from COVID costs

Written by Marine Log Staff
Lasse Petterson

GLDD’s Lasse Pettersen: “We expect much stronger results in the second half of 2021,”

America’s largest provider of dredging services, Houston headquartered Great Lakes Dredge & Dock Corporation (Nasdaq:GLDD), has reported financial results for the quarter ended June 30, 2021 that saw net income fall to $2.1 million and adjusted EBITDA to $20.2 million compared to the second quarter of 2020 that ended with $9.0 million of net income and $28.1 million in adjusted EBITDA

“Our first half of 2021 results did not meet expectations,” said president and CEO Lasse Petterson, citing direct COVID cost impacts of testing and quarantining of $4.3 million in the first quarter, with an additional $3.0 million incurred in the second quarter.

“Given project activity in which we are currently engaged, coupled with our backlog, new project awards, and fewer vessel drydocks for the remainder of the year, we expect much stronger results in the second half of 2021,” said Petterson. “Unfortunately, we do not expect the stronger second half to fully allow us to achieve our original expectations for 2021.”

“We expect the domestic bid market to be just as strong this year as it was in 2020,” continued Petterson. “In the second quarter, Great Lakes announced awards for $112.8 million in new work that adds to our 2021 backlog, resulting in a 34.5% market share for the first half of 2021. Backlog at June 30, 2021 was $454.4 million versus $423.4 million at June 30, 2020. In addition, Great Lakes was awarded the Mississippi River Hopper Dredge Rental Project for $24.3 million in the second quarter. After the end of the quarter, we were awarded the Cape May Beach Renourishment Project for $12.1 million, and we were low bidder on the Corpus Christi Phase III Deepening Project for $151.9 million and the Thimble Shoal deepening and renourishment project for $39.5 million.”

OFFSHORE WIND

Looking ahead, Petterson said that the company continues to focus its future growth strategy in its core dredging business through the renewal and upgrade of its fleet and in the upcoming offshore wind power generation market.

“The Biden administration has pushed to accelerate renewable energy developments and has set a target to install 30 GW of offshore wind energy generation capacity by 2030 on the U.S. east coast,” said Petterson. “This target confirms our plans to enter this new market by building the first U.S. flagged Jones Act compliant, inclined fall-pipe vessel for subsea rock installation for wind turbine foundations. This vessel would represent a significant critical advancement in building the U.S. logistics infrastructure to support the future of the new U.S. offshore wind industry. We anticipate making an investment decision in the later part of this year for expected delivery in early 2024. Additionally, we are considering further steps to participate in this market and have elected to re-engage with the Boston Consulting Group (“BCG”) to this time assist us in confirming our offshore wind market strategy as well as reviewing other long-term growth strategies for GLDD. BCG commenced work on this initiative in the second quarter of 2021.”

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