Harland & Wolff reported a £15.92m EBITDA loss in the first half of 2023, predominantly due to heavy investment in headcount ahead of major contract delivery. The company’s EBITDA loss was £12.71m in the same period last year.
Despite the loss, the company has a strong order backlog of around £1bn over the next seven years, up £100 million since March.
Nonetheless, Harland & Wolff shares slipped in early trade on Friday as investors to the opportunity to book profits. Harland & Wolff was trading down 9% at 13.8p at the time of writing. The stock had touched lows around 9p in July.
Harland & Wolff revenue soars
Revenues rose 65% to £25.53m from £15.41m a year earlier but were weighed down by cost pressures around labour, energy and inflation impacting the cost of sales and 19.4% gross margin.
The loss comes as Harland & Wolff positions itself for substantial contract delivery over the coming years. This includes a Fleet Solid Support subcontract with Navantia worth £700-800m. The company has also secured a £60-70 million mid-life vessel upgrade contract and won a £1.5 million heavy lift vessel contract since the end of June.
Harland & Wolff expects full-year revenues of £100m, with significant increases in the second half as work begins on the Fleet and M55 contracts. It reiterated revenue guidance of £200 million for 2024. The company is negotiating a new £200 million credit facility to fund ongoing working capital requirements.
At the end of June, Harland & Wolff had net debt of £88.53 million, reflecting an upsized $100 million credit facility, up from $35 million in March 2022.