Gulf Island Fabrication Inc. announced results Tuesday for the third quarter 2021.
Revenue for the third quarter was $19.6 million, compared to $25.3 million for the third quarter 2020, a reduction of 22.6%. Consolidated net income from continuing operations for the third quarter 2021 was $5.3 million, compared to a loss of $4.3 million for the third quarter 2020. Net income from continuing operations for the third quarter included a gain of $9.1 million associated with the SBA’s forgiveness of $8.9 million of the company’s PPP loan, plus accrued interest. Operating income for the fabrication and services division was $400,000.
“We were able to report another quarter of solid operating results for our fabrication and services division in spite of the challenges created by Hurricane Ida, highlighting the strong foundation we are developing at Gulf Island,” Richard Heo, Houston-based Gulf Island’s president and CEO, said in a statement. “We were able to safely and efficiently restart operations at our Houma (La.) facilities following the storm, which was only possible because of the tremendous resilience and hard work of our dedicated workforce.”
“While Hurricane Ida resulted in a temporary disruption, we remain very encouraged by the improved bidding activity in our end markets, and as a result of our collective efforts, we are well positioned to take advantage of these opportunities,” continued Heo. “We are seeing favorable trends in growth end markets such as LNG, petrochemicals, and renewables and are focusing our new business development efforts in these areas. Further, the recent strength in oil and gas prices has resulted in increased activity in some of our legacy end markets as well. As a result, we are experiencing improved new awards in our small-scale fabrication and offshore services businesses, and we continue to expect large capital projects to move toward final investment decisions in late 2021 or early 2022.”
During 2020, the company outlined a strategic plan that included reducing its reliance on offshore oil and gas markets. Gulf Island is focusing near-term business development efforts on higher-growth end markets such as LNG and petrochemical, the company said. The company is also beginning to see increased inquiries and bidding activity in the hydrogen market related to growing energy transition initiatives.
At the same time, Gulf Island is seeking to diversify its offshore services customer base, increase its offshore services offerings, and expand its services offerings to onshore markets. The recent increase in oil and gas prices has resulted in increased activity after Hurricane Ida.
Revenue for the company's shipyard segment in the third quarter 2021 was $2.3 million, a decrease of $5.2 million compared to the third quarter 2020. Revenue was related entirely to the division’s two 40-vehicle ferries for North Carolina and its 70-vehicle ferry for the state of Texas.
Operating loss was $1.9 million for the third quarter 2021, compared to $1.1 million loss for the third quarter 2020. Third quarter 2021 results included project charges of $1.7 million related to the division’s 70-vehicle ferry project and project improvements of $400,000 related to its first 40-vehicle ferry project.
Results for the third quarter 2021 also included ongoing vessel holding costs and legal fees of $400,000 associated with the company’s contract dispute for two multipurpose support vessels (MPSVs), and charges of $400,000 associated with damage caused by Hurricane Ida to the company’s second 40-vehicle ferry project and the MPSVs. The company is still on track to complete the wind down of the shipyard business by the third quarter 2022.