Beleaguered Philly Shipyard is in the red on another newbuilding as it looks for new financing and works to close the $100m Hanwha takeover.
In its third-quarter earnings statement, the Kjell Inge Rokke-backed Pennsylvania yard said its agreement to build a subsea rock installation vessel (SRIV) for Great Lakes Dredge & Dock Co was now a loss-making contract.
“Philly Shipyard believes there have been impacts beyond its control, leading to delays and cost overruns, and will seek remedies,” it said.
The Oslo-listed shipyard announced the contract in November 2021 for one SRIV for $197m. That figure would rise to $382m if an option for a second vessel were exercised.
It is the second loss-making deal for Philly Shipyard, following a disclosure last year that it would lose money on a series of five mariner training vessels built for US state-run merchant marine academies.
Those vessels, known as national security multi-mission vessels (NSMVs), were contracted for $1.5bn and were heralded as a lifesaver for the yard, which had haemorrhaged money for nearly two years as it lay idle.
Two of the five vessels have been delivered, to the State University of New York Maritime College and the Massachusetts Maritime Academy.
Philly’s backlog remains $1.4bn, including the three remaining NSMVs, the SRIV and three container ships.
It said it would need additional funds to complete these, and it has begun looking into financing options.
Meanwhile, it said its takeover by Hanwha Ocean and Hanwha Systems, announced in June, has received the approval of US regulatory bodies and is expected to close in the fourth quarter.
The board would then discuss future strategy and structure.
For the third quarter, Philly Shipyard posted a $47.2m loss, deeper than the $17.3m loss reported in the same period last year.
It classifies its shipbuilding activities as discontinued operations following the Hanwha agreement.
Those operations brought in $115m for the quarter, up from $102m year on year.
