Philly Shipyard (PHLY) Q4 2023 earnings summary

Executive summary

• Delivered NSMV 1, Empire State, to MARAD in September, the first government-owned ship built in Philadelphia in 50 years; 2023 results were weighed down by substantial NSMV losses.

• Year-end backlog was $1.719 billion across eight vessels, with contractual deliveries extending through 2027.

Financial highlights

• Operating revenues and other income were $441.8 million in 2023 versus $393.8 million in 2022.

• Net loss was $67.9 million versus $11.7 million; basic and diluted loss per share was $5.61 versus $0.97.

• EBITDA was negative $63.9 million, with a -14.5% margin, versus negative $18.1 million and -4.6%; EBIT was negative $71.6 million versus negative $24.3 million.

• Gross loss on shipbuilding projects reached $63.8 million versus $17.2 million, primarily reflecting increased NSMV costs.

Outlook and guidance

• Backlog comprises four remaining NSMVs, one SRIV and three Matson containerships; delivery schedule runs from 2024 through 2027.

• Four months of schedule relief was obtained across the NSMV series; efforts to recover COVID-related costs continue, but forecasts exclude potential recoveries and subcontractor back charges.

• The five-vessel NSMV series is forecast to remain loss-making; experience from NSMV 1 and the V-5 improvement program are expected to support performance on later vessels.

• Pursuing commercial and government newbuild opportunities for slots following the third Matson containership; government focus includes commercial-like and auxiliary vessels.