S&P slices Great Lakes Dredge & Dock

S&P said it downgraded its ratings for Great Lakes Dredge & Dock Corp. and its senior unsecured notes to CCC+ from B. The 4 recovery rating on the notes is unchanged.

“The downgrade reflects Great Lakes' underperformance, heightened liquidity risk, elevated leverage, and negative FOCF generation, which we expect will persist in 2023. The company's revenue contracted 10.7% in 2022 due to a weak order backlog stemming from delayed projects in the dredging market and its losing bid for a large capital project.

“Great Lakes' S&P Global Ratings-adjusted EBITDA margins substantially declined to 8.5% in 2022, from 21.5% in 2021, due to its lower fleet utilization, a decrease in its higher-margin capital projects, inflationary pressures, and one-time charges. The company's S&P Global Ratings-adjusted debt leverage increased to 7.5x as of Dec. 31, 2022, from 2.5x in 2021,” the agency said in a statement.

S&P said it does see the dredging market slowly returning to normal over 2023-2024, but estimates it will take time for Great Lakes to improve its backlog and recover its revenue and earnings.

The outlook is negative.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.