GLDD Earnings: Lower In Third Quarter, Higher For Year
Great Lakes Dredge & Dock Company (GLDD) reported net income of $8.8 million for the third quarter, on revenue of $169.8 million. Both numbers are down from the third quarter of 2018, when GLDD reported net income of $11.9 million and revenue of $178.7 million.
A decrease in domestic capital and coastal protection revenue was partially offset by increases in maintenance, rivers/lakes and foreign revenue, the company reported. Increased drydock days also contributed to the revenue decrease in the third quarter, GLDD said.
The company said its year-to-date revenue through the end of the third quarter was $547.2 million, up $99.6 million from the same period in 2018. Year-to-date net income from continuing operations is $40.9 million, an increase of $34.8 million over year-to-date net income for the same period last year.
“Bidding activity increased significantly, with over $1.0 billion in projects bid in the third quarter,” said CEO Lasse Petterson. “The third quarter reflects solid project performance which produced results in line with our expectations.
“Operationally, the quarter had lower dredging activity, due to several vessel drydockings. Most of these drydockings are now complete and those vessels are actively engaged on projects in the fourth quarter. The impact was partially offset by improved performance on the San Jacinto flood prevention project in Houston, Texas, and the Jacksonville port deepening project in Florida.
“Strong performance is also a result of safe project execution as we continue to focus on improving safety on our projects.
“As stated previously, the third quarter had over $1 billion in projects bid. Great Lakes was awarded $270 million of those projects in the third quarter. In addition, an option for work in Jacksonville was awarded for $96.6 million, bringing the total amount of work added to backlog in the quarter to $366.6 million, ending the quarter with a backlog of $653.7 million.”
GLDD reported its capital expenditures for the quarter were $6.9 million, up from $2.3 million in capital expenditures during the third quarter of 2018. The company now expects total capital expenditures to be $45 million for 2019, which includes an increased investment of $5 million in the existing fleet.
“We expect the domestic market to be robust for the foreseeable future,” the company said in the announcement.
The 2019 domestic bid market remains strong after an active third quarter, the company’s announcement continued. “We continue to expect the trend of additional phases of multiple large deepening and other capital projects to be bid in the fourth quarter and in 2020, keeping the domestic bid market at these higher levels. The projects coming into the pipeline include additional phases of work in Corpus Christi and new projects in the Ports of Norfolk, Virginia and Freeport, Texas.
“In addition to this anticipated capital work, we also expect to bid on multiple projects funded by the $17.4 billion disaster supplemental appropriations following several natural disasters, such as Hurricane Florence and Hurricane Michael that occurred in 2018. While most of this funding is for non-dredging projects like flood control, there is a significant portion that is intended to be deployed in our sector to recover from the damage caused by coastal storms and to reduce the risk of future damage from flood and storm events. Although we have not yet bid on these projects, we do expect the projects to come into the market before the end of the year.
“In addition to the deepening and coastal protection projects, several liquefied natural gas, petrochemical and crude oil projects are creating the need for port development in support of energy exports. We believe several of these private client projects are progressing to bid in 2019 and 2020. Great Lakes’ fleet and safety performance position the company well to perform in this growing segment of the market,” the announcement said.
Based in Oak Brook, Ill., GLDD is the largest provider of dredging services in the United States.