Q1 2022 Great Lakes Dredge & Dock Corp Earnings Call
[music].
Good day and thank you for standing by welcome to the first quarter of 'twenty, 'twenty, two where great Lakes dredge and job Corporation earnings Conference call.
At this time all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session.
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I would now like to hand, the conference over to your first speaker today Dino Baginski director of Investor Relations. Thank you. Please go ahead.
Good morning, and welcome to our first quarter Conference call. Joining me on the call. This morning is our president and Chief Executive Officer lots of Patterson, and our Chief Financial Officer, Scott Kornblau Lassa will provide an update on the events of the quarter. Then Scott will continue with an update on our financial results for the quarter.
<unk> laughter will conclude with an update on the outlook for the business and the market. Following their comments there will be an opportunity for questions. During this call. We will make certain forward looking statements to help you understand our business. These statements involve a number of risks uncertainties and other factors that could cause actual results to differ materially.
Lee from our expectations certain risk factors inherent in our business are set forth in our earnings release and in filings with the SEC, including our 2021 Form 10-K and subsequent filings.
During this call. We also refer to certain non-GAAP financial measures, including adjusted EBITDA, which are explained in the net income to adjusted EBITDA reconciliation attached to our earnings release and posted on our Investor Relations website, along with certain other operating data with that I will turn the call over to LASA.
Thank you Deanna.
Stated in our earnings release, although we reported solid results for the first quarter of 2022.
We did not fully meet our expectations.
We experienced delays from abnormal weather events production impacts on various jobs and some lingering cost from the COVID-19 pandemic that began to diminish as the quarter progressed.
In our last earnings call, we discussed to bomb cyclone brought heavy snow and coastal flooding to the northeast in January and strong sustained winds impacted several projects in the south east pushing pushing production into later quarters.
So climate change continue to impact our nation and <unk> continue to see damage. As a result also we have storms and rising waters.
Although these weather events have short term impacts on our operations and the resulting damage add to the recurring nature and increased long term demand for dredging related projects.
As we noted previously planned dry dockings of six vessels will have an impact on overall 2022 results.
Vessels in dry dock all high end revenue generators.
The large hopper dredge Liberty Island wasn't scheduled drydock, the entire first quarter, but will be returning to work in the second quarter and our largest vessel. The hopper dredge Ellis Island is scheduled for dry docking in the second half of the year.
In addition to Ocado dredges were partially idle during the quarter due to delays in mobilizing on several projects.
As we continue to renew our fleet, we are focusing on initiatives that improve fuel efficiency and reduce emissions of greenhouse gases and other pollutants.
Currently we upgraded the Kadow suction dredges cover lineup and the company's largest booster station the Buster, which we expect will reduce nox.
Nox and particulate emissions by more than 80% from these two units.
These vessels with both commence work in June on the first phase of the Houston shipping channel widening project, where the mechanical dredge dredge 54 has already started work.
In April .
In addition engines through auto fleets are being replaced with new more efficient models.
Help conserve fuel and reduce emissions at.
Our new building program with which.
Which is consist of on Newbuild Hopper dredge, which is a midsized hopper dredge remains on schedule.
On budget.
And with that I expected delivery in the first quarter of 2023.
Now we have an option for assist sister ship with deliveries scheduled for 2024.
After decommissioning several of our oldest storage is in 2017, we have invested in productivity upgrades to our best performing vessels.
Bind with our ongoing fleet renewal program, where you have positioned us well to meet current and future market demands.
Our 2021 ESG report has been posted today. It provides an overview of the initiatives, we undertook and the progress we achieved in the environmental protection and improvements the safety and wellbeing of our employees and business partners.
Community contributions and partnerships.
These improvements governance practices and a rapid and thorough response to the Covid pandemic.
As part of Us.
As part of our engagement with stakeholders and partners.
We recently signed an agreement with the college of Engineering at Texas, A&M University to provide funding and technical support for what will become the great Lakes, the Great Lakes dredging Dock laboratory for dredging and coastal studies.
<unk> has had a long and a robust relationship with Texas A&M that has included research participation in on.
Teaching all 100 dredging short courses.
Advocacy for the Ocean and coastal engineering profession, and this agreement will allow us to formalize and build on that relationship.
Turning to the exciting news, we announced yesterday, Ecuador awarded Great Lakes, our first major contract in the new offshore wind generation market.
That qunar and our partner BP has chosen the great Lakes, and then or consortium to perform the subsea rock installation work for the Empire wind one and two.
Wind farms off the east coast of the U S.
This project is estimated to provide over two gigawatts of renewable energy to the state of New York.
The renewable power generated by the two wind farms with power more than 1 million households in New York.
This project is considered a flagship ship offshore.
Offshore wind develop them shaping the future of this industry in the U S.
Yeah.
And this award is significant for our entry into this new markets.
The project team will be mobilized in software this year with the installation of rocking style protection starting in 2025.
This award will also provide a solid foundation as we build the backlog for a new subsea rocket station vessel to be delivered from the Orca affiliate yard in the second half of 2024.
Great Lakes will be generated local content employment and economic benefits in the state of New York purchasing Broadcom domestic New York worries and using his marine logistic bases Staten Island for its site operations.
I will now turn the call over to Scott to further discuss the results of the quarter and the year and then I'll provide commentary on the market to us.
Forward.
Thanks, LASA and good morning, everyone.
Let me start by giving some color on our first quarter results for the first quarter of 2022 revenue revenues were $194 $3 million net income was $11 $1 million and adjusted EBITDA was $29 $7 million.
Contract revenues of $194 $3 million for the first quarter of 2022 increased $16 $7 million or nine 4% from the first quarter of 2021.
The quarter over quarter increase in revenue was due to higher domestic capital and coastal protection revenue, partially offset by a decrease in revenue from maintenance dredging rivers and lakes and foreign projects first quarter revenue came in about 10% above the guidance given on the last earnings call primary.
Italy due to pulling a job forward into the first quarter that was previously expected to occur in the second half of the year and the positive settlement of claims from recently completed projects.
Current quarter gross profit of $33 $1 million is flat compared with the first quarter of 2021 gross profit margin. This quarter was 17% compared to $18 six in the prior quarter.
And with a few points lower than the guidance given on the last call due to the previously mentioned the weather impacts and a couple of production issues related to differing site soil conditions.
During the first quarter, we had minimal COVID-19 related production impacts and Covid expenses were approximately $1 million most of which were incurred at the beginning of the quarter.
Operating income for the current quarter of $18 $8 million increased $2 $1 million from the prior year quarter, primarily due to lower general and administrative expense G&A.
G&A expense came in at $14 $6 million during the first quarter of 2022, which is down $1 $7 million from the prior year quarter, primarily due to lower stock incentive expense and Houston relocation costs.
G&A was approximately $2 million lower than prior quarter guidance, primarily due to lower than expected stock incentive expense and the timing of adding additional head count related to building up our offshore wind team.
Net interest expense of $4 million for the first quarter of 2022 came in at guidance and was down from $6 $6 million in the first quarter of 2021, primarily due to the lower interest rate on the senior notes, which were refinanced in the second quarter of 2021.
First quarter 2020 to income tax expense of $3 $3 million increased $1 $9 million from the same quarter of 2021 due to the higher income and a one time tax deductions related to stock compensation in the first quarter of 2021.
Rounding out the P&L net income for the first quarter of 2022 was $11 $1 million up from $8 $8 million in the prior year quarter.
Next we turn to our balance sheet, where we ended the first quarter of 2022 with $142 $6 million in cash no debt maturities until 2029, and our revolver remains Undrawn first quarter 2022 capital expenditures were $25 6 million.
<unk>, which included $12 $7 million in maintenance Capex $8 7 million for the construction of our new Hopper dredge and approximately $4 million for the construction of the new scout and multi cats apps.
Absent any additional new builds the full year Capex guidance I gave on the last call of $165 million remains unchanged.
I'll conclude with some commentary on the second quarter of 2022.
We expect Q2 revenues to be between 175 and $185 million the Liberty Island, which was in the shipyard for a regulatory Drydocking all of the first quarter is expected to return to work later this quarter. The cutter Dredge Carolina entered the shipyard towards the end of the first quarter.
For emission reduction upgrades and is expected to return to work in June .
The dredge New York is scheduled to enter the shipyard in the latter part of the second quarter for her regulatory Drydocking and the dredge 54, which completed her regulatory drydocking towards the end of the first quarter is currently working at the Houston ship channel.
We expect gross profit margin to be higher in the second quarter compared to the first quarter, but may experience a drag from the first quarter weather and production impact.
G&A expense expense is expected to be about $16 million and net interest expense should continue to slightly decrease each quarter throughout the year as more interest is capitalized as the new builds progress with that I'll turn the call back over to Lhasa for his remarks on the outlook moving forward.
The U S. Army Corps of Engineers has received record funding in 2022 and as they have throughout the pandemic. They have continued the bid schedule four types of dredging in tooling for deepening support maintenance and expansion and coastal protection and restoration projects.
In 2021, the domestic market reached one 8 billion in projects bid and we expect 2022 bid market to be equally strong. However, we have seen some delay in new bids here at the start of this year, we expect bid activities to increase substantially in the second and third quarter.
And we expect to see bids from multiple new cases of port deepening projects in Norfolk, Freeport mobile savvy in corpus and additional phases of the substantial Houston ship channel widening project.
These major capital projects, our great Lakes can excel with our technical expertise experience safety performance in our large diverse fleet.
Europe is currently reevaluating the sourcing of energy after the Russian innovation.
Which will require imports of large quantities of LNG <unk>.
<unk> and a low bids pending.
Two LNG projects that are still pending on notice to proceed by these lines. Both of these clients are now coming up to our investment plans.
And one of these clients.
Has already instructed their EPC contractor to start construction of its export facility in second quarter of 2022.
In preparation for the dredging would commence soon thereafter.
We ended the first quarter with a 50% mark bid market share or equal to $95 million and consisted of several coastal protection projects that will add to our total backlog.
The awards included the coastal strong risk management East Rockaway Inlet subcontract for $37 2 million to Avon at Boston beaches projects with $25 9 million, The Carolina and cooler Beach project at $23 million and then that said Beach project for $11 $6 million, we ended the <unk>.
Water was up $474 million in backlog.
And $505 three.
$3 million in low bids and options pending awards.
Post quarter end, we were low bidder on the New Jersey wind Port stage, one channel deepening project, which will create a navigation channel from the federal debt of a river channel to the hub style offshore wind Marcia imports.
Valued at $7 million is not a major dredging project. However, it is significant as the new Jones, who import will be the first purpose built twin port on the east coast, providing heavy lift and component facilities with open access to the Atlantic Ocean.
We.
To see strong support from the administration for the dredging industry on March 15.
This year, the Omnivision appropriate appropriation Bill was signed into law, including funding for the U S. Army Corps of engineer totaling $8 3 billion for fiscal year 2022.
This is an increase of $548 million above the fiscal year 2021.
And an increase of one 6 billion above the precedence of original budget request.
Now turning to the U S offshore wind power generation market, which.
With our first award we remain confident that this will provide us great lakes with a strong opportunity for growth and diversification and building this new business.
In March of two.
<unk> 2021, the White house announced new initiatives that would advance the administration's goals to expand the nation's offshore wind energy capacity and the common decade opening new areas of development, improving environment, permitting and increasing public financing for projects.
As part of the initiatives the department of the interior energy and Commerce committed to a shared goal of installing 30 gigawatts of offshore wind power generation capacity in the U S waters by 'twenty three.
And in January of this year, the administration announced plans to auction more than 480000 acres in the New York Bight put six new offshore wind energy leases. The administration's first win sale and the largest lease sale ever offered with potential build out capacity over seven.
<unk>.
So last year, we solidified our plans to enter the offshore wind market by signing a $197 million contract with the Philly shipyard to build the first U S. Flagged Jones Act compliant implying full pipe vessel for subsea work installation for wind turbine foundations, which now.
As its first projects set to start in 2002.
In parallel to the vessel build we have been busy bidding from a multitude of offshore wind farm projects with rock installation plan for 2025 and beyond.
Major wind farm developers like Equinox and Dominion.
Power and grid in the U S wind have already issued RF queues and they are in the process of selecting suppliers for the wind farm developments.
With the equity or BPA Award yesterday as a strong start we have good opportunities ahead to add new projects to our backlog, providing solid activity for our vessels from 2025 and onwards.
As the offshore wind industry is developing here in the U S. The global offshore wind market are forecasted to be booming with more than 200 gigawatts of offshore wind generation capacity expected to be installed globally over the next 10 years.
We expect this will keep the large international contractors involved in offshore wind very busy for the next years, keeping vessel and equipment demand high.
In conclusion.
Although we were faced with some challenges in the first quarter of this year.
<unk> and the decision we have made and the strategic initiatives, we have implemented to grow and improve our fleet business. We are.
We're optimistic that domestic dredging market.
The domestic dredging market demand will remain strong in the coming years and the ongoing developments in the U S. Offshore wind generation will provide an avenue for diversification and growth for our company and with that I'll turn it over for questions.
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Our first question comes from the line of Joe Gomes of Noble capital markets. Your line is now open.
Hi. This is Joshua is hopeful filling in for Joe Gums, just my first question.
Is this regarding yesterday's announcements of the Empire offshore wind project.
Can you provide just any more detail on that and if so like.
Why would they choose you guys so versus maybe some other peers.
Okay.
Well, we certainly hope they chose us because we had the best technical solution under that test.
Bid for the work the combination of the Great Lakes us the largest dredging contractor in subsea construction company.
In the U S combined with the <unk>.
As a world, leading and maybe the most experienced.
Contract either building out offshore wind farms.
I think the clients or the value and.
And saw the value in our offering.
Okay, great. Thank you for that and there's one more and just I was looking to see how the labor market looking for the company you guys are seeing any good retention so curb employees.
Any good attraction of new ones.
Well the labor market continues to be tight.
We see that both in.
Our staff and our offices and also on our vessels that the labor market is changing and we are.
We are looking at this very.
Hard in order to make sure that we retain the stuff we have but also to make sure that we are attractive when it comes to a new recruitment. So it is it is different than it was before the pandemic.
We have staff and we have plans in place to make sure that we can mine our projects as we go forward.
Okay, great. Thank you for that I'll get back in the queue. Thank you so much for the question.
Our next question comes from the line of John Dan One thing of CJS Securities. Your line is now open.
Hey, good morning, everyone and thanks for taking my questions and congrats on the Empire. When it's nice to see all that come to fruition after such a long time.
My first one is I was wondering if you could talk a little bit more about the scale of the projects the contract size of the expected benefits to how quickly it ramps those kinds of details.
Yeah, Hey, John Good morning, It's Scott.
At this time, we're not allowed to disclose the value of the contract, but let me give you some general commentary on the awards and some thoughts of how we think about this win vessel going forward. The Empire Wind award with the first step for building backlog for the Soi for 2025 and 2026 at these type of contracts are typically <unk>.
Worded with two to three years lead time, so the operator can reserve the vessel capacity.
Scopes for Great Lakes on the Empire wind projects are expected to keep this vessel utilized for nearly half of 2025 and half of 2026, and we have bids on multiple other projects to absorb the rest of the vessels availability for those two years and beyond.
Once our wind vessel is fully utilized and operational we expect annual revenue to exceed $100 million, a year and margins should be similar to our more complex dredging capital projects.
Great. That's really helpful. Thank you Scott.
And I was wondering what once you get towards that 100% utilization.
How many other.
Ships will you be thinking you're needing it does that is that in the discussion right now or is it something youre still going to.
Wait till December or I guess later this year before you're going to decide that.
Yes.
No we have an option to build an additional vessel.
At the Acapella Liard.
But we will see how the market develops.
Focus here will be to make sure that this vessel is fully utilized and then if the market takes off and if we see that.
The ambitions from the administration of the 30 Gigawatts is coming.
True then suddenly we will need more capacity than the one vessel.
Okay, Great and then are you any closer to be.
The decision on the second Hopper dredge.
Yes, we have an option.
Expires in June of this year.
We see the dredging market is very active so.
We are looking very keenly on on whether to exercise that option or not.
Hey.
And then finally, just the commentary on the slower bids.
Entering this year lastly, I know you had been expecting that expecting a little bit of weakness in the first quarter. It seems like its slower than you, but that does that impact your expectations for the year just in terms of.
How much work you can perform through year end or is this more of a.
We can make it up a little bit later.
Well start rolling out.
Yes, all of this there's two questions. There one is on the bid markets and I think the bid market will recover there are some major projects that are.
In the.
The Corps of Engineers listing in addition to the LNG projects that are.
Out there.
So when it comes to the mid market.
Hello.
Gotcha.
It seems like they dropped this is Tina let's just wait a few minutes to see if they dial back in.
Yes.
But.
But you guys are losses answer.
I think he must have you guys are back on.
Sorry.
No worries.
Yes.
Got that.
The bid for the beginning of the year versus your expectations for the whole year.
Did you hear just want to make sure. We don't repeat John did you hear any of what LASA or I said.
I think I caught the first few seconds and then cut offs. Okay. So so I'll comment on the bid market.
Yes, the bid market was.
Slow here to the first quarter, but we expect it to pick up quite strongly in the second and third quarter and I expect the bid market to be just as strong or even stronger than it was last year in particular with the LNG development. So if we do see.
When it comes to the revenue development for the client for the year I'll, let Scott comment on that yeah, John So with the $474 million of backlog that we ended the quarter with we expect roughly 80% of that to convert to revenue in 2022.
The second quarter, we are pretty pretty much fully utilized except for some of the regulatory dry dockings that I talked about beef.
Before but we already have the dance card full on that.
Q3.
It's some availability we've got two or three vessels that we're bidding work on right now that.
We are hopeful we'll be able to fill in the next month or two so there'll be able to seamlessly move into work and then we have a couple of more after that have availability in the Q4 again working on filling up that so nothing that changes the way we were thinking about 2022 as a whole we knew.
New that Q1 would be slow bidding and it will start picking up in Q2, and Q3 and that's when we would fill out the second half of the year.
Okay, great. Thank you I appreciate that.
Our next question comes from the line of Adam Dilemma of Thompson Davis. Your line is now open.
Hey, good morning, guys. Congrats on the solid Q1.
Good morning.
I wanted to start out on the on margins.
Are you starting out the year, a little slower than you expected does any of that has to do with kind of general inflation or supply chain issues.
No Adam I mean really.
The drag on margin that we saw in Q1 was related to all the weather issues or production issues, which causes some delays.
So those costs that we incurred because of those delays and production impact is really what's dragging down the margin because you see the revenue with.
With solid and actually slightly higher than where we saw but it's just the cost that we incur when we have these weather and production issues that really drag it down and as I kind of foreshadowed in my commentary, it's not just a one and done.
It does drag the project down not just for the quarter, but until the year end. So we will still see some of the Q1 impact.
Rearing itself up in Q2 as some of these projects progressed, but we also have a bunch of fresh project, starting as well that we should be able to recover so I do think that quarter over quarter, we will see an increase in margin even with some of the impact that will we still feel from some of these issues. Okay.
Okay.
Has the bidding changed at all in terms of <unk>.
Tangent seems that you can put in for fuel or some of these older contracts that are.
Coming back.
What kind of protection do you have in there for inflation.
Yes so.
For most of the corps contract.
Once we bid on the costs are locked however for fuel we do have a very aggressive hedging program. So we are able to minimize any impacts from fuel because we do endeavor and we always have to to hedge at least 80% of our expected fuel consumption and we topped that up so so fuel.
<unk> is really not very impactful for us when it comes to how we perform against bids as we bid on new projects.
Don't just go back and look at what cost where we have a view on what costs are going to be and we make sure that we build all of those in as we bid all projects going forward.
Okay got it and then on dry docking it sounds like the.
Schedule for the back half of the year is actually not us.
Heavy as you were thinking maybe three or four months ago is that true.
No nothing nothing really has changed.
The Carolina, which is in now for its.
Emission upgrades that was not part of that original commentary that we gave on the number of Drydocking. Because we were just talking about regulatory dry dockings. So this was an emission upgrade instead, but now the schedule is still right now pretty much the same I kind of laid out what the second quarter would look like.
We still would have three regulatory dry dockings in the second half of the year, including the Ellis Island.
Okay, and just last one from me what's the.
You mentioned kind of five deepening projects.
What's the timing on when those could get awarded and how do you and Theres a moving piece with the LNG also like how do you expect backlog to trend as we move through the year.
Yeah, as I said, the bidding here staffs ready to kick off in second quarter.
Third quarter is going to be very busy.
The backlog was thought to be built.
If we move from I would say from second quarter into third quarter.
And that goes for the deepening projects.
We know that the <unk>.
Houston widening the second phase of that project.
As in under evaluation at this point in time.
And that may be awarded.
Here in second quarter.
And then we have other places to solve a freeport in.
Sabine and sold on the Corpus comp is getting towards the end of third quarter fourth quarter.
The LNG projects.
We have already bid those projects. So we are expecting.
The Friday to go forward and as I said, one of the projects is already moving into the EPC construction.
We are then starting in that preparations for the dredging.
And second half of this year, but the dredging itself probably starts early next year at the earliest.
There are other LNG projects and the ones that we have in low bid pending.
Which is also being kind of reconsidered.
But probably not will be bid until next year.
Okay. Good color thanks, guys.
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Our next question comes from the line of Deforest Hinman of log Johnson and company. Your line is now open.
Hey, thanks for taking the questions.
The offshore stuff.
Really starting to look like it's more.
Tangible more real for the announcement we've made.
With the New York project, but can you just help us think about.
Yeah.
What does that look like when we start looking at and I think the reason I'm asking is I think you guys have a lot of understanding of the geology of a lot of the.
I don't know if it's the shelf or whatever it's called but.
When we start to think about all those units going up offshore and they're hooking those back too.
The land the mainland.
Is there dredging involved.
Outside of this rock dumping vessel in terms of getting those cables.
The land are they just sat on the ground are they dug in a trench I mean is that.
Our future revenue exposure as well.
Yes, there are additional scopes that we are looking at when it comes to offshore wind we are focused in on the the skull protection because those are the larger contracts and it is important for us to get contracts backlog for a vessel that we're building, but there are additional scope.
So around some dredging.
Particularly when it comes to the shore approaches.
We are looking at scopes that will add to our backlog once those upbeat and awarded.
Sure.
And then on the geology piece of that outside of that.
The coast of New York is that Sir.
Service.
<unk> done with assumption garage or a cutter dredge what does that geology look like.
Yes.
The work that we're looking at is really this sure approaches for the export cable.
That's where you would tie into the shore.
The approaches.
Complicated and there's various different techniques that can be used there it could involve a dredging it could involve digging you would.
<unk> dredge it could involve kadow dredge.
And.
We just have to see where the approaches are happening.
The other scopes that we are looking at on which seems to be.
An issue for offshore wind is the skull protection around cables in general.
I don't know if you saw one.
<unk> was out with a press release earlier this year, where they had to.
Go out and provide additional scale protection on the cables.
For the wind farms in Europe .
And so we expect to be additional scopes here when it comes to protection all the cables themselves.
<unk> additional work for this.
Okay. That's helpful and then on the LNG contract.
Apologies about the LNG contract the offshore contract that we just discussed I think I know the answer the question, but can you just.
Fresh us I guess, it's probably one of the first contracts of its kind in the U S. But just in terms of how we're getting.
Paid it sounds like on a lot of the.
Dredging contracts some revenue model per ton.
Similar.
Similar just help us understand how that contract is structured.
Yes. It is similar to the way that we price our dredging contracts at it as a cost per unit.
Sure.
So we are being paid for the rock that we are placing on the sea floor.
And so the structure of the contracts this is pretty much the same.
When it comes.
<unk>.
When it comes to how the this the scope.
Scope is split up we have a cooperation.
Partnership with vendor.
And by and large has done this working in Europe .
Prior and have vessels that are active in Europe at this point in time.
So we are.
With our Jones Act vessel, we will do the work that is required for a Jones act vessel to perform and then we have additional capacity that we can bring in with venmo what vessels.
Okay.
Separate topic on these LNG projects.
Clearly the Russian and Ukraine situation has changed a lot of the.
Thoughts I think globally in terms of how they thinking of how they're thinking about gas gas supply.
Have you is more big picture have you had any conversations with.
Sure.
The engineering construction firms.
The companies themselves.
You'd be willing to share with us in terms of what what are people thinking.
In the U S as it relates to LNG projects and.
Helping out the situation in Europe , because it's starting.
This is my opinion, but it's more of a.
Sure.
There's a political piece that's coming into this as well as the economic piece in terms of doing these facilities mathematically. These.
These spreads are looking.
Very attractive, but just any thoughts you have that you could provide to investors and shareholders that would be very helpful. In terms of how you are.
Thinking and what you're hearing regarding these projects.
Yes, as I referred to.
These projects have been waiting for a final investment decision on those final investments decisions made by the owner of the terminals.
Has been dependent on entering into long term supply contracts.
Prior to on our last year before the innovation of Ukraine.
These contracts seem to be more difficult to get in place.
Whilst now after the innovation.
<unk> is looking at a much more diverse.
Strategy for and supply of energy and that includes import LNG. So the once we talked to.
And you can see it in the press releases from the company such as Tellurian.
They are optimistic about entering into these longer term.
Contract shortly which then leads up to.
<unk> decision on the financing of the project.
No.
Think that these projects will be accelerated and start moving forward.
Really on the backhaul for this new situation in Europe .
Okay. Thank you for taking the questions.
We have <unk>.
Jonathan One thing of CJS Securities again on the line. Your line is now open.
Alright, Thanks for the follow up my first one is just you mentioned a pull in in the quarter I was wondering what the impact was.
Just in terms of revenue and margin and which quarter you pulled it from.
What I said.
It was a job that was slated in the second half of the year that we were able to accommodate a request from our customer and move it into the first.
It was actually going to details specifically on the project, but it was kind of laid out that 10% increase that we had from guidance. This was a big part of that pickup.
And the margins were comparable to where we ended up for the quarter. So didn't the job itself didn't have a big influence one way or another on the margins, but definitely a pickup on revenue again that just moved from second half of the year in the first quarter.
Okay, great. Thanks for that second can.
Can you provide a little bit more granular impact of Wendy Ellis goes into dry dock and kind of the expected impact from that.
Maybe the timing and kind of.
This is a specific quarter, it's going to be in.
Yes, it's still don't have specific quarter.
We are very flexible and make sure that we work it as much as we can take it down at the right time to get it back so it's still somewhere in the second half, it's very possible that it'll kind of hurdle the quarters, but don't don't have that completely nailed down yet.
Because of the impact that the vessel does have to our bottom line and because it's a relatively new vessel, we are expecting it to be on the shorter end of the number of days that you would normally see a vessel out and we have challenged our team to get in and out.
So we can get back to making money.
We do see some of our vessels, especially on the older ones that could be 90 plus days in the yard this will be well inside of that.
We're hoping to have it in and out in under two months.
Okay, great. Thank you Scott.
Yep.
There are no further questions coming in at this time I am now turning the call back to Dana.
Thank you we appreciate the support of our shareholders employees and business partners and we thank you for joining us in this discussion about the important developments and initiatives in our business. We look forward to speaking with you during our next earnings discussion. Thank you.
This concludes today's conference call. Thank you for participating you may now disconnect.
Centers, please stay online for the post conference.
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