Great Lakes Dredge & Dock Reports Earnings Improvement
Great Lakes Dredge & Dock Corporation (GLDD) on August 1 reported net earnings for the second quarter of 2023 of $1.7 million, a turnaround from the same quarter a year earlier, when the company reported a net loss of $4 million.
The company reported revenues of $132.7 million, a decrease of $16.7 million from the 2022 second quarter. The lower revenue in the second quarter of 2023 was due primarily to lower domestic capital project revenue, offset partially by an increase in coastal protection and maintenance project revenue, the company said.
At the end of June, the company had a dredging backlog of $434.6 million, up from $377.1 million as of the end of 2022.
“The second quarter reflects improved performance, resulting in improved net income and our highest adjusted EBITDA since the first quarter of 2022,” said Lasse Petterson, GLDD president and CEO. “Although not all challenges are behind us, our solid quarter is a result of improved project performance and weather conditions and the benefits from our cost-savings initiatives. Great Lakes ended the quarter with $434.6 million of dredging backlog, which does not include approximately $50 million of performance obligations related to offshore wind contracts and $487.3 million in low bids and options pending award. Dredging backlog includes the Freeport Reach Deepening job, which was awarded to Great Lakes for $157.4 million, which, at the time, was the third-largest domestic capital project the company has won in its history.”
Petterson said GLDD is executing on its strategy to enter the U.S. offshore wind market.
“On July 20, we were honored to have President Biden attend the steel-cutting ceremony for Great Lakes’ offshore wind rock installation vessel, the Acadia, which marks another step forward as construction begins with expected delivery in 2025,” he said. “In addition, post quarter end, 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 of these milestones solidify our entry into the offshore wind market and will support Great Lakes’ awarded rock installation contracts for the Empire Wind I and II projects with installation windows in 2025 and 2026.”
The company is being “proactive” on cost reductions and fleet adjustments, Petterson said, including cold-stacking of vessels and adjusting cost structures and fleet to reflect changing market conditions coming into 2023.
“These initiatives have led to substantially reduced costs in 2023, which has allowed us to navigate impacts from a delayed 2022 bid market and continue our fleet renewal program, which remains on budget with our mid-size hopper dredge, the Galveston Island, expected to be operational in the second half 2023; her sister ship, the Amelia Island, has expected delivery in 2025,” Petterson said.
The total U.S. bid market for the six months ending June 30 was $930.4 million, of which Great Lakes won 33.6 percent of the market, GLDD said. The total capital bid market for port improvement projects for the first half of the year totaled $315.1 million, of which 55.7 percent of the market year to date was won by Great Lakes, the company said.
