With the last ship on its order book nearing completion, Philly Shipyard desperately needs to find whatever kind of work it can — including repair work and steel fabrication —to keep things ticking over until the next newbuilding contract is secured.
The shipbuilder reported a loss of $9.0 million for the fourth quarter of 2018 and $45.4 million for the year. With the only work currently underway at the yard being the second of two containerships for Matson, which is due for delivery in first quarter 2019, the company continues to adjust its operations and workforce in line with its current order backlog. Currently, the only shipbuilding activity is in one of its two graving docks; all other production facilities are idle. Its current workforce (including direct employees and subcontracted personnel) totals slightly more than 400 people, down from approximately 1,200 people at the beginning of 2018.
Philly Shipyard expects it will suffer significant losses in 2019, even if it eceives orders for new vessels.
In the near term, its says its main focus is the pursuit of the opportunity to build National Security Multi-Mission Vessels (NSMV). The NSMV program seeks to replace up to five of the U.S. state maritime academy training ships. Any time now, the U.S. Maritime Administration (MARAD) is expected to award a contract for a vessel construction manager (VCM) for the program. The VCM will then enter into a contract with a U.S. shipyard to build the vessels. The shipyard contract is expected to be awarded within the second quarter of 2019. Delivery of the first vessel is targeted for the end of fourth quarter 2021.
Philly Shipyard says it is in discussions related to several other potential new construction projects for U.S.- built vessels and that it is expanding its search for new opportunities throughout the marine industry.
It is also “exploring potential partnerships that can create a stronger entity to secure new work into the shipyard” and is “aggressively pursuing several possibilities for short-term work to have some activity in the shipyard in 2019 before a production start of a new shipbuilding project. In particular, Philly Shipyard is pursuing opportunities for steel work and repair jobs to utilize idle capacity in its fabrication shops and dry-docks.”