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Wednesday, June 10, 2020
Great Lakes Dredge & Dock (GLDD)
New Build Program Approved and Fleet Renewal On Horizon.
Great Lakes Dredge & Dock Corp is a provider of dredging services in the United States. The company only’s operating segments is Dredging. Dredging involves the enhancement or preservation of navigability of waterways or the protection of shorelines through the removal or replenishment of soil, sand or rock. Its projects portfolio includes Coastal Restoration, Coastal Protection, Port expansion, and others.
Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Fleet renewal on the horizon. New build one moves forward and option for new build two creates optionality. Final investment decision (FID) to build a 6,500 cubic yard (CY) hopper dredge was reached and a contract has been signed with Conrad Shipyard in Louisiana. The total cost of new build one approximates $97 million and delivery is expected in 1Q2023. There is a one-year option for new build two for $92.7 million so the total new build program could approach $190 million with delivery of new build two in late 2023. Full details of the new build program should be available once the 2Q2020 10-Q is filed in early August.
Strong credit profile makes new build program manageable and debt refinancing likely. The decline in net debt into the sub-$120 million range in 1Q2020 strengthened the credit profile and should allow for funding of the new build(s), plus refinancing of $325 million of existing debt once…
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