Q4 2024 Great Lakes Dredge & Dock Corp Earnings Call
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Be advised that today's call is being recorded I'll now like to hand, the conference over to your first speaker today picking up against <unk> director of Investor Relations. Please go ahead.
Speaker Change: Good morning, and welcome to our fourth quarter and full year 'twenty 'twenty four 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 parcel will provide an update on the events of the quarter. Then Scott will continue with an update on our financial results.
Speaker Change: For the quarter and year lots of will conclude with an update on the outlook for the business end 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.
Speaker Change: Our results to differ materially from our expectations certain risk factors inherent in our business are set forth in our filings with the Securities and Exchange Commission.
Speaker Change: 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 Lisa.
Lisa: Thank you Tina and good morning.
Lisa: Great Lakes had a strong 2024 fourth quarter revenues of $202 8 million and EBITDA of $40 2 million.
The full year financial results, where revenues of $762 7 million and adjusted EBITDA of $136 million, securing the second highest results and great legs under them 35 year history.
Lisa: The strong performance throughout the year was driven by executing complex port deepening and coastal restoration projects leveraging our capabilities of our extensive fleet.
Lisa: In addition, our products both efficiently executed with strong margin performance.
Lisa: New Hopper dredge the Galveston Island work the majority of the year contributing to a 2024 results.
The bid markets hit a historic level of $2 9 billion, which included a significant number of port deepening and coastal protection projects.
Lisa: Lakes, 133% of the overall bid market, which resulted in a substantial dredging backlog at year end of $1 2 billion.
With an additional $282 1 million in low bids and options pending award.
Lisa: We focused our bidding on large and complex port deepening and coastal protection projects, which now accounts for 94% of our backlog and these projects, where our fleet experienced people excel, creating opportunities to achieve higher project margins.
Lisa: The largest capital projects bid in the year was to be not just contract six deepening project, which we won without an awarded based on the open options totaling $235 million.
Lisa: Our successful bid strategy in 2024 resulted in a large number of project wins and quality backlog at year end.
Lisa: Which will support high asset utilization and a solid revenue year end 2025, as well as providing a good base and revenue visibility to 2026.
Lisa: Yeah.
Lisa: As mentioned, we took delivery of our newest hopper dredge the Galveston.
Lisa: Early last year, she went through commissioning and C trials in record time, and Thats been contributing strongly to our improved results in 2024.
Lisa: Sister ship the Amelia Island is expected to be delivered in the second half of this year and will go straight to work on projects already in backlog.
Lisa: These two dredges has been specially designed pushed shallow in a narrow waterways in the United States and our efficient tools for us to work on coastal protection projects, such as beach restoration wetlands improvements and barrier Island construction.
Lisa: Shortly after his inauguration president Trump signed an executive order pausing for issuance of new offshore wind leases and permits and ordered a review of the U S wind generation permitting and leasing process.
Lisa: The executive order has not directly impacted fully permitted and ongoing construction projects such.
Lisa: Such as Equinox Empire wind, one understood Sunrise wind projects.
Lisa: We have secured contracts for placing rock on the CBD to protect foundations and cables with Iraq subsidy rock installation vessel, the Acadia, which is currently under construction.
Lisa: The Acadia is also well suited for work outside of the U S offshore wind, where it will be capable of accurately positing rock for protection of subsea infrastructure from waves and currents damage from fishing activities and sabotage form hostile nations.
Lisa: In anticipation of a slowdown in the U S market in 2027 and 28, we have over the last two years been broadening our target market for the Acadia to include international and offshore wind projects as well as protecting critical subsea infrastructure, such as oil and gas pipelines and.
Lisa: Communication and Paul cables.
Lisa: We have already tendered bids on several projects in these international markets.
Lisa: Parting rock installation in the second half of 2026 and beyond.
Lisa: With the addition of these new target markets for Acadia, we have decided to rename our offshore wind initiatives offshore energy, which better describes the new business.
Lisa: During 2024, we enhanced our financial position by generating a strong operational cash flow and we entered into a $150 million second lien credit agreement, providing additional liquidity to support our new Newbuild program.
Lisa: And in the second quarter S&P global ratings upgraded great lakes credit rating to B minus which demonstrates the improvements that we've made this year to our balance sheet cash flows and overall performance.
Lisa: I'll now turn the call over to Scott to further discuss our results for the quarter and our full year results.
Lisa: More than all of.
Speaker Change: Then I'll provide further commentary around the marketing business.
Speaker Change: Great. Thank you Lawson and good morning, everyone.
Speaker Change: Start by walking through the fourth quarter, which resulted in revenues of $202 $8 million net income of $19 $7 million and adjusted EBITDA and adjusted EBITDA margin of $42 million and 20% respectively.
Speaker Change: Revenues of $202 $8 million in the fourth quarter of 2024 increased $21 $1 million from the prior year's fourth quarter, primarily due to the addition of the Galveston Island, and higher capital and coastal protection revenue offset partially by a decrease in maintenance and rivers and.
Speaker Change: <unk> revenue.
Speaker Change: Current quarter gross profit and gross profit margin increased to $48 $9 million, and 24, 1%, respectively compared to $38 $7 million and 21, 3% respectively in the fourth quarter of 2023.
Speaker Change: The increase in gross margin is primarily due to improved utilization and project performance and a larger number of capital and coastal protection projects, which typically yield higher margins. During the first fourth quarter of 2020 for over 85% of our revenue came from these types of <unk>.
Speaker Change: <unk> <unk>.
Speaker Change: Fourth quarter 2024, G&A of $18 $7 million is $3 $3 million higher than the same quarter last year, primarily due to higher incentive pay from our improved results.
Speaker Change: Current quarter's operating income of $30 million remained relatively flat compared to the prior year quarter operating income of $35 million. The fourth quarter of 2023 had a onetime gain of $7 $4 million from a terminated offshore energy contract, which was mostly offset.
Speaker Change: By the improved operational performance in the fourth quarter of 2024.
Speaker Change: Net interest expense of $4 $9 million for the fourth quarter 2024 was up from $2 $8 million in the fourth quarter of 2023, primarily due to interest on the second lien credit agreement entered into earlier in 2024, partially offset by decreased borrowings on our revolver.
Speaker Change: During the current year's quarter.
Speaker Change: Fourth quarter 2024, net income tax of $5 $1 million was down slightly compared to income tax expense of $6 2 million in the same quarter of 2023 and net income for the fourth quarter of 2024 was $19 $7 million compared to $21 $6 million from the prior year's quarter.
Speaker Change: <unk>.
Speaker Change: Turning now to our full year 2024 results revenues increased $173 1 million to $762 $7 million driven mostly by significant increases in capital and coastal protection revenue, we saw gross profits more than doubled from the prior year.
Speaker Change: <unk> to $166 million and net income increased over four times to $57 $3 million.
Speaker Change: Finally, adjusted EBITDA increased $63 million year over year to $136 million by all metrics 2024 was a very successful year.
Speaker Change: Turning to our balance sheet, we ended the year with $10 $2 million in cash and $35 million drawn on our $300 million revolver, which doesn't mature until the third quarter of 2027. After year end, we fully paid off the revolver and it is currently undrawn.
Speaker Change: And as Lhasa mentioned in the second quarter, we closed on a five year $150 million second lien term loan that has very favorable call provisions.
Speaker Change: With liquidity currently over $300 million, a weighted average interest rate on our total debt under 7% and no maturities until 2029, we are well positioned to complete our newbuild program with plenty of additional liquidity.
Speaker Change: Total capital expenditures for 2024 were $135 $7 million made up of $72 7 million for the construction of the subsea rock installation vessel, the Acadia $41 million for the Amelia Island, $5 4 million for the completion of the Galveston.
Speaker Change: Alan with the remaining $16 $6 million coming from maintenance and growth.
Looking forward to 2025, we expect approximately 60% of our $1 $2 billion backlog to be converted into revenue during the year with most of it coming from capital and coastal protection projects.
Speaker Change: We currently have seven regulatory dry dockings plan during 2025, including for Hopper Dredges. The majority of the dry dockings are planned for the second and third quarters, but as always the number and timing of dry dockings is subject to change.
Speaker Change: We expect full year 2025 capital expenditures to be between 140, and $160 million, including capitalized interest for the Amelia Island, Acadia and maintenance and growth Capex.
Speaker Change: We're also currently evaluating moderate upgrades to certain dredges and support equipment over the next three years and we'll update current capex guidance. Accordingly, as these decisions are made.
Speaker Change: Looking towards the first quarter of 2025, we expect utilization to remain strong as the majority of our dredges are working.
Speaker Change: We will start and complete one of the scheduled regulatory dry dockings during the quarter and are scheduled to begin two others towards the end of the first quarter with that I will turn the call back over to Lhasa for his remarks on the outlook moving forward.
Lhasa: Thank you Scott.
Lhasa: As stated previously the year ended with a record bid market of $2 9 billion, which included a robust market for large and complex projects in the beach nourishment and port deepening markets.
Lhasa: The bid market was supported by a record $8 7 billion in budget appropriations in 2024 for the U S Army Corps of engineers. Additionally.
Lhasa: Additionally, the 2023 disaster relief supplemental Appropriations Act allocated $1 5 billion for infrastructure repairs and beach Renourishment projects.
Lhasa: The Army Corps budget for 2025 is expected to be yet another record appropriation nearing $10 billion. The Bill includes four $5 7 billion for operations and maintenance projects of which $3 1 billion is from the Harbor maintenance Trust fund.
Lhasa: Yeah.
Lhasa: Currently the federal government is operating on the continued continuing resolution throughout March 14th of this year, after which Congress and the administration can pass the funding of the Bill.
Speaker Change: We expect the 2025 dredging bid market to be similar in volume to 2023 with a strong activity in the coastal protection segment and less activity in the port deepening your segment. After a very strong 2020 for mid market.
Lhasa: With a record backlog, we are well positioned for 2025.
Lhasa: 26, even if the bid market is somewhat delayed due to the extended continuing resolution.
Lhasa: We continue to be confident in our growth and diversification plans subsidy rock installation initiative.
Lhasa: As stated previously we are broadening our targeted SRA market to include oil and gas pipelines and telecommunications cable protection and international offshore wind.
Lhasa: The latest Bloomberg offshore wind market outlook shows global offshore wind expected to grow substantially towards 2020.
Lhasa: 2014, with a forecast is a forecast exceeding 700 gigawatts of installed power.
Lhasa: While due to the global political uncertainty this may be a high case. However, it does point to a strong growth opportunity in offshore wind later this decade and beyond.
Lhasa: In addition market expectations for telecommunication on oil and gas Scowled protection projects globally are estimated to require the capacity of approximately 10 rock placements vessels <unk> Clos.
Lhasa: Acadia was built to operate in U S waters for the majority over time, but she is also equally well suited for work outside of the U S, including the UK EU Middle East and Asia, where the growth in rock placement services is expected to grow strongly over the next decades.
Lhasa: In conclusion 2024, and it was a very successful year for great lakes with strong revenue and product performance, resulting in the second highest EBITDA in the company's history.
Lhasa: We entered 2025 with a $1 $2 billion backlog, providing us with a deep project pipeline for 2025 and revenue visibility well into 2026 positioning us well for the future on where that could turn the call over for questions.
Lhasa: Thank you at this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one of your telephone and wait for your name to be announced to withdraw your question. Please press star one again.
Lhasa: Please standby, while we compile the Q&A roster.
Speaker Change: And our first question comes from the line of Joe Gomes of Noble capital. Your line is now open.
Joe Gomes: Good morning, and congrats on the quarter.
Speaker Change: Thank you Joe.
Speaker Change: So I wanted to start off.
Speaker Change: Obviously.
Speaker Change: <unk> four was a really strong year bid market year, Idaho.
Speaker Change: Just mentioned you expect.
Speaker Change: <unk> 25 to be more like 23 as opposed to 'twenty four but.
Speaker Change: There is.
Speaker Change: All these does efforts and I'm wondering you know how that.
Speaker Change: Mike, possibly impact our core and work awards.
Speaker Change: One of the thing.
Speaker Change: In the recent past that it had been a challenge with so many other people still working from home.
Speaker Change: And then just if you guys had I know, it's early days, but kind of what your thought process is on how that might impact.
Speaker Change: The market if you think it's going to impact the market at all.
Speaker Change: Yes.
Speaker Change: The situation with doors, I don't know, who knows where that goes but.
Speaker Change: As we understand they are starting to look at the end.
Speaker Change: Defense spending this week.
Speaker Change: We have this strong backlog, which is awarded projects. It is funded projects. So the dredging backlog will be executed during 2025 that is we're very certain on that and also into 2026. So.
Speaker Change: If there is some efforts to to delay the bid market for that is now coming out typically in Q2 and Q3 of 2025.
Speaker Change: The impact on us will be minimal if any for 2025, it may impact backlog generation for 2026, but it remains to be seen with the backlog. We have we are very confident in our outlook for the next two years.
Speaker Change: Okay, and lastly, if I can just.
Speaker Change: Sorry, Joe if I can just add.
Speaker Change: <unk> mentioned, we do think that the bid market for 25 will be much more heavily weighted on the coastal protection projects.
Speaker Change: When we saw a slowdown in the market because of the work from home. It was the inability to get the large capital projects out.
Speaker Change: We think that these coastal protection projects will move forward I mean, this is important work that needs to get done to rebuild these beaches.
Speaker Change: We don't have a ton of white space to fill for this year, but those projects that come out will really start filling in the second half of 'twenty six for us.
Speaker Change: Yeah.
Speaker Change: Okay and then.
Speaker Change: Saw recently here there was adverse.
Speaker Change: Adverse court ruling.
Speaker Change: Non Jones act vessels being able to do rock installation in the U S.
Speaker Change: Was wondering if you might be able to talk a little bit about that and how that may or may not impact. Our Katie I know you are ready mentioned youre looking at other markets.
Speaker Change: For that vessel, but just wanted to give us a little color on that that court ruling.
Speaker Change: Can you take title to Scott.
Speaker Change: Yes sure so.
Joe Gomes: The punchline, Joe as we are in no different position today than we were two weeks ago. When the when the ruling came out. This was a lawsuit that we put out there challenging the interpretation of a certain aspect of the work related to the Jones Act. So some wind farms have two layers of rock that surround the Mt.
Piles are first layer is laid down than the mono pilot driven in and then the second layer of rock is laid down the current interpretation of the Jones Act is that first layer only is not Jones act protected we were challenging that interpretation, saying that both of them should be it was rejected on a technicality.
Joe Gomes: It does not take a position that second layer, which is typically the larger scope of work that has absolutely Jones Act protected and there is also a large number of wind farms that don't even do a first layer of rock amount of pile is laid once a mono pile is put in that does set a U S C port.
Joe Gomes: Point and then all of the rock that gets laid is Jones act protected. So we were trying to enhance our already strong position again, a technicality. We are still evaluating what our next legal stack may maybe but again just want to make it clear we are no different position that we than we were prior to this rule.
Joe Gomes: <unk>.
Speaker Change: Okay. Thank you for that and then one more for me and I'll get back in queue any update on title 11 funding.
Joe Gomes: Yes.
Joe Gomes: Most of the change in administration I mean, all government loan programs were put on pause and that includes title 11.
Joe Gomes: So we're just going to have to see how it shakes out and then even once the pauses lifted I'm not sure if vessels like the Acadia will get the same sort of priority that that they were getting under the prior administration, but as you know last year, we planned for this.
Joe Gomes: We did the other financing obviously, we've seen a much different cash flow profile from operations. So now myriad I'd like it but it really becomes a nice to have at this point and definitely not a need to have.
Joe Gomes: Great. Thank you very much.
Speaker Change: Thank you Juan for next question.
Speaker Change: Our next question comes from the line of Jon <unk> of CJS Securities. Your line is now open.
Speaker Change: Hi, Good morning, guys. Thank you for taking my question. My first one is could you give an update just on the Covid construction and when do you expect to take delivery of that vessel.
Speaker Change: Okay.
Speaker Change: Yes, I can take that Scott, yes, we are.
Speaker Change: It's progressing well at the Philly shipyard as you know there has been an ownership change at the shipyard so now the Korean.
Speaker Change: Hanwha.
Speaker Change: Company is.
Speaker Change: Owner of the shipyard and.
Speaker Change: In this period there has been some delays at the vessel.
Speaker Change: OSA yard for the vessels. So we're looking at delivery towards the end of this year maybe early in Q1.
Speaker Change: Oh 2033.
Speaker Change: And then just in terms of the projects that you already have in backlog and your contract signed before I know you said that.
Speaker Change: Permits are still existing but there has been chatter.
Speaker Change: Impairments might be reviewed.
Speaker Change: What are the options for the Acadia, if those contracts do get canceled their permits to get.
Speaker Change: Do you have protections built into the contract number one and two is there any way to fill that.
Speaker Change: In light of the vessel.
Speaker Change: If those things flowing through.
Speaker Change: Yes, there are protections in the contracts.
Speaker Change: If those.
Speaker Change: Projects are being canceled which.
Speaker Change: We haven't seen any indication solved yet.
Speaker Change: Then the alternative is to take the Acadia and work internationally and the market International for rock placement.
Speaker Change: Activities is strong.
Speaker Change: Okay, and there is enough lead time.
Speaker Change: For the next.
Speaker Change: I guess I'm curious that you were able to utilize items. After you take delivery of those contracts we can.
Speaker Change: Yes, clearly it takes time for these contracts to be new.
Speaker Change: Negotiated and awarded so depending on when these.
Speaker Change: Potential negative news should come out there could be lead time to do that if it comes out very close to the execution time for the projects then it's more difficult but.
Speaker Change: This is just pure speculation at this point in time.
Speaker Change: Great.
Speaker Change: Got it a quick one for you just what is your expected liquidation of backlog in Q1, just given the Drydocking schedule. I think you mentioned you wanted maybe starting to others, but I didn't know if those are the big drivers.
Speaker Change: What projects you're working on should we think of Q1 is probably maybe the biggest one of the year for you just given your schedule going forward.
Speaker Change: Yes, I think Thats fair I think we will see the highest revenue quarter in the first quarter.
Speaker Change: I mentioned, we do have for Hopper dredge is scheduled for this year.
Speaker Change: One of those the one that goes in and out in Q1 is a hopper, but it's one of the smaller ones.
Speaker Change: The larger hoppers are more in the middle and towards the end of the year. So yes utilization and revenue for Q1 is going to be extremely strong.
Speaker Change: Okay, great. Thank you.
Speaker Change: Thank you for our next question.
Speaker Change: Our next question comes from the line of Adam Thalheimer of Thompson Davis. Your line is now open.
Adam Thalheimer: Hey, good morning, guys nice quarter, not sure why the stock's down but nice quarter.
Speaker Change: Yes.
Speaker Change: Thanks, Ed.
Speaker Change: Do you Scott when you say, 60%.
Speaker Change: Backlog conversion into revenue this year should we read that as guidance on revenue or.
Or is there additional book and burn that comes in.
Speaker Change: There's additional book and burn that that's what I would call the floor.
A little white space still to fill.
Speaker Change: And that will top out.
Speaker Change: What's the revenue for for 2025 is.
Speaker Change: Got.
Speaker Change: You do the math at $720 million already on the books right now.
Speaker Change: With very little left the wind to fill out the year.
Speaker Change: And then what are your thoughts high level on.
Speaker Change: Margins.
Speaker Change: Obviously, the number of dry docks is up.
So as your percentage of revenue from capital. So just curious how that shakes out if you can have revenue growth this year.
Speaker Change: With even with the seven dry docks.
Speaker Change: My expectation is we will see revenue higher than 25, then than we did in 2024.
Speaker Change: This would be a normal dry dock year.
Speaker Change: It would all be off the charts, but even with it.
Speaker Change: My expectation is that we see a growth in revenue and 25 over the extremely strong 24 revenue number.
Speaker Change: And then I was curious how that shakes out to on the margin line Scott.
Scott Kornblau: Yes, I mean so.
Scott Kornblau: Obviously the projects are there any of that.
Scott Kornblau: Amount the army burning off its well over 90% of that is going to be on these higher margin project, but then of course I've got seven dredges that will be for a period of time not only having a zero on the topline there'll be costs incurred on there. So it will bring down from where.
Scott Kornblau: <unk> could be because of the cost, but that being said expectations are because of the makeup of the revenue. We will still have very very strong margins again, bringing up again. If this was a normal year I think we'd be talking about historic levels on a lot of fronts for for 2025.
Scott Kornblau: It's still going to be an extremely strong year.
Speaker Change: Understood and then last one for me you talked about.
Scott Kornblau:
Scott Kornblau: A critical subsea protection outside of.
Scott Kornblau: On the international front, not just in offshore wind, but also of pipelines and telecom.
Speaker Change: I'm just curious on the pipelines and telecom piece, what youre seeing there and how big that opportunity could be.
Scott Kornblau: Yes.
Scott Kornblau: We have seen in Europe has been.
Scott Kornblau: Sabotage.
Scott Kornblau: Or you call accidents too.
Scott Kornblau: <unk>.
Scott Kornblau: Critical infrastructure.
Scott Kornblau: And there's a lot of discussion on how to protect the cables connecting Europe, both with power and for communication.
Scott Kornblau: And also going over to the U S and one way is to protected with with rock placement.
Scott Kornblau: So that they are then insulated for for that damage.
Scott Kornblau: And in Asia, we see large pipeline project pipeline projects gas pipelines, where it's being considered to cover the pipelines completely with the rock so that market is.
Scott Kornblau: Already a large market, but it is growing and growing on the back of the <unk>.
Scott Kornblau: General.
Scott Kornblau: Geopolitical situation and as I said in my script.
Scott Kornblau: We investigate that bucket and then get a full overview as it looks like there is volte.
Scott Kornblau: Volume is equal to 10 vessels of Acadia size to cover that market. So that is a substantial growth that we see there.
Scott Kornblau: Fantastic. Thank you.
Scott Kornblau: Thank you one moment for our next question.
Speaker Change: Our next question comes from the line of photo of Romero Sidoti and company. Your line is now open.
Scott Kornblau: Thanks, Hey, good morning loss on Scott.
Speaker Change: Good morning, Hey, good morning.
Adam Thalheimer: Hey, good morning, I wanted to stay on Adams.
Speaker Change: Kind of question, there a little bit thinking.
Adam Thalheimer: Thinking about these days.
Adam Thalheimer: Addressable markets for the targeted Roc installation.
Broadening.
Adam Thalheimer: Can you maybe rank order these opportunities for great Lakes.
Adam Thalheimer: In terms of rock installation through let's say 2028, and I know you talked about Europe, both power and communication.
Adam Thalheimer: Barack protection and then also Asia kind of power protection.
Adam Thalheimer: Just kind of give us a better sense of how you see.
Adam Thalheimer: The rank order of those opportunities over the next four years.
Yes, I was just wondering for you guys specifically.
Adam Thalheimer: Yes.
Adam Thalheimer: The market as well.
Adam Thalheimer: I see it for Acadia is clearly the little rock volumes are large in offshore wind in offshore wind is continuing to be strong in Europe in particular and also in Asia.
Adam Thalheimer: So we will we have been tendering for these offshore wind projects for a while and we see that starting in 2026 and onwards.
Adam Thalheimer: Then we have cable protection.
Adam Thalheimer: With rock.
Adam Thalheimer: And it's interesting to see because when you do this our cable installation projects is difficult to estimate how much of the cable youre able to trench.
Adam Thalheimer: Italy.
Adam Thalheimer: Or where you hit hard rock and well you hit hard rock.
Underneath you need to protect the cable in that area.
Adam Thalheimer: And that market is large but.
Adam Thalheimer: But difficult to estimate when you start out the project.
Adam Thalheimer: For us cable protection for power cables will be the second largest market and then also telecommunication thereafter.
Adam Thalheimer: Our priorities will be Europe, first and then look at Asia as well.
Adam Thalheimer: Great.
Speaker Change: But south America being an opportunity for you guys I've heard a lot of chatter about.
Adam Thalheimer: Offshore energy opportunities, particularly around Brazil.
Speaker Change: Yeah, we haven't looked at that in detail I think the realistic scenario is that we take first take a carrier to Europe and address that market, that's where we see the growth that's where it's a mature market and we have good opportunities to to perform there.
Speaker Change: Got you very helpful. There and then I know, we talked a lot about the impact of the new administration on kind of your your.
Speaker Change: Your legacy business and the the offshore energy segment, but can we also talk about.
Speaker Change: The impact on the outlook for LNG projects I know Theres, a recent executive order to lift a freeze on export permitting applications.
Speaker Change: Just talk about the outlook for LNG for you guys.
Speaker Change: Yes, I think that market will be strong going forward.
Speaker Change: The the lift.
Speaker Change: Lifting of the permitting.
Speaker Change: I think that would happen fairly soon.
Speaker Change: That opens up for the opportunity to invest continue to invest in LNG in the United States for exports.
Speaker Change: I think.
Speaker Change: A factor that needs to be taken into consideration as to what's happening in Europe around Ukraine, and whether Europe will start buying Russian gas again.
Speaker Change: <unk> impacted demand for imported LNG into Europe.
Speaker Change: That is for other people to decide on but.
Speaker Change: I think.
Speaker Change: It's a positive outlook for LNG projects in the U S. In the short term.
Speaker Change: Okay.
Speaker Change: Great and then last one for me would just be and I'm sorry. If you said this in the prepared but how much is left on the Newbuild program.
Speaker Change: It.
Speaker Change: Does it all end in 2025, and then just speak to your cash flow expectations for 2025. Thank you.
Karen: Karen I'll take that Scott.
Karen: Yeah. So.
Speaker Change: We have roughly about $110 million to $120 million left between the Acadia and the Amelia Island.
Speaker Change: Lots of mentioned the delivery of the Acadia.
Speaker Change: If it's not the end of this year. It may creep into the first quarter of next year. So that will just kind of depend on when that last payment is made.
Speaker Change: There is some delay after delivery when we actually make the last payment. So my expectation is that payment. The final payment is probably made.
Speaker Change: Sometime in the first quarter of next year, but will be substantially done paying for it.
Speaker Change: This year.
Speaker Change: For the entire Newbuild program, and then again cash flow, we still as I mentioned with the Capex guidance and that 140 to 160 I did mention that includes capitalized interest that's about $20 million. So you can really kind of back that off when youre looking at the cash.
Speaker Change: <unk> related to the Newbuild program and then pencil in what you think our cash flow from ops is going to be but we should be I would say fairly give or take.
Speaker Change: Cash flow neutral.
Speaker Change: For the year, even with the big Capex ticket remaining to spend this year.
Speaker Change: Very helpful. Thanks, very much.
Speaker Change: Yeah.
Speaker Change: Thank you I'm showing no further questions at this time I would now like to turn it back to obtain up against <unk> for closing remarks.
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.
Speaker Change: Thank you for your participation in today's conference. This does conclude the program you may now disconnect.