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Great Lakes Dredge & Dock Wins Two Projects in Gulf Coast

Posted on July 24, 2015

Great Lakes Dredge & Dock Corporation (GLDDSnapshot Report) has been awarded two projects in the Gulf Coast, one being a Shell Island West Natural Resource Damage Assessment (NRDA) Restoration Project and of the other a U.S. Army project. The projects are together valued at over $90 million.

The $76 million Shell Island Restoration Project was awarded by the State of Louisiana Coastal Protection and Restoration Authority (CPRA) in order to restore the island. Per the contract, Great Lakes Dredge & Dock will build 2.8 miles of beach and dune habitat, as well as 281 acres of marsh. Work on the project will begin this fall and is expected to be completed by the third quarter of 2016.

The project is expected to require 4.9 million cubic yards of sand and 1.7 million cubic yards of marsh material. Great Lakes Dredge & Dock will borrow the sand from the Mississippi River and marsh material from an offshore source in the Gulf of Mexico.

The company will hydraulically transport river bed deposits from the Mississippi River in a sand and water slurry through a 16 mile long pipeline. The pipeline is placed over two levees, bored beneath two highways and submerged along the Empire Waterway to Shell Island.

Building and restoring the barrier island chains is critical for protecting Louisiana and the Gulf Coast from future storms and disasters. Shell Island West NRDA Restoration is being implemented with Deepwater Horizon NRDA Early Restoration funds, one of four components of the $318 million Louisiana Outer Coast Restoration Projects approved as part of the third phase of early restoration in Oct 2014.

The second award was a $20 million contract by the US Army Corps of Engineers. The scope of the contract includes routine maintenance dredging of the Galveston Entrance, Outer and Inner Bar channels as well as the Houston Ship Channel between Bolivar Road and Redfish Island. A significant portion of the dredged sand will be used to restore the adjacent shoreline of Galveston Beach which will enhance both coastal protection and recreation. This project is currently underway and will be completed by the end of the year.

Great Lakes Dredge & Dock has previously utilized its dredging capability on the Scofield Island Restoration Project in 2012–2013 and on the Shell Island East Berm Barrier Island Restoration Project in 2013. The Gulf States are expected to further promote their long planned restoration efforts which will improve volume of dredging opportunities in the region. The endeavor will be beneficial for Great Lakes Dredge & Dock in the future.

During the first quarter of 2015, Great Lakes Dredge & Dock was awarded $208 million, or 84% of the domestic dredging bidding market, with the $135 million Savannah project accounting for a significant portion of its awards. The Savannah project is expected to be completed by the summer of 2018. The company was also awarded a $23 million coastal protection project in New York and $46 million maintenance dredging project.

Great Lakes Dredge & Dock expects revenue and earnings to improve in the dredging segment as Sandy and deepening projects commence and fleet utilization improves. It also anticipates a significant improvement in the environmental & remediation segment’s performance as it moves into its busy season and several remediation projects kicks off.

Great Lakes Dredge & Dock currently holds a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the sector include Dycom Industries Inc. (DYAnalyst Report), Granite Construction Incorporated (GVASnapshot Report) and Jiangsu Expressway Co. Ltd. (JEXYYSnapshot Report). While Dycom Industries sports a Zacks Rank #1 (Strong Buy), Granite Construction and Jiangsu Expressway carry a Zacks Rank #2 (Buy).

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