THE Harland & Wolff Group has announced a 65 per cent rise in revenues for the first half of 2023, but the Belfast shipyard owner still registered a loss of almost £16 million in the six month period.
Publishing its interim financial results for the six months ending June 30 2023, the London-listed company reported revenues of £25.53m.
That compared to £15.41m in the same six months last year.
But when it came to earnings before interest, taxes, depreciation, and amortization (EBITDA), the group made a loss of £15.92m.
Harland & Wolff said the loss was mainly due to its investment in headcount in preparation for delivery of the fleet solid support contract (FSS) with the UK Ministry of Defence, as well as other contracts.
The FSS contract has been awarded to Spain’s Navantia.
But as a sub-contractor Harland & Wolff said it expects to earn between £700m and £800m from the deal.
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Production for the seven-year programme is not due to start until 2025.
Alongside its Belfast shipyard, the group also owns yards in Methil, Arnish and Appledore.
Harland & Wolff recently disclosed a loss of £70.4m for the 12 months ending December 31 2022.
On Friday, the group said its net debt soared from £19.74m in the first half of 2022 to £88.53m in the latest six months.
It said that reflected a significant expansion of its corporate credit facility with New York-based Riverstone Credit Partners, which increased from £35m in March 2022 to $100m in March 2023.
Harland & Wolff said it is in advanced negotiations for a new £200m credit facility.
It estimated its backlog of contracted work now sits at around £1 billion for the next seven years, an increase of £100m since March. Most of that can be attributed to the FSS deal.
The directors said they believe the group remains on track to record revenues of £100m for 2023, “subject to various design completions and procurement permissions with revenues from the FSS and M55 contracts expected to increase significantly in the second half”.
The group has restated its projection that it will be generating £200m in revenue by 2024.
Among the highlights in the half-year report, Harland & Wolff said a deal for the mid-life upgrade and dry docking of a large vessel, is expected to generate between £60m and £70m.
The group also noted the outcome of the judicial review in respect of its gas storage project at Islandmagee, which ruled in the company’s favour.
"These are increasingly exciting times at Harland and Wolff - not just from a broad company perspective - but for each of our yards, the communities that they serve and of course, our workforce,” said group chief executive James Wood.
“The award this year of the FSS contract provides a substantial baseload over the next five years and will result in a transformation at Belfast which will become one the most modern shipyards from both a national and global perspective.
“Its facilities - as well as the group's skill base - are already attracting global clients especially with large and complex vessels dry docking in the Belfast Dock, demonstrated by both orders won and those in the pipeline.
“The opportunities within the energy and renewables markets are also substantial and will benefit all of the group's yards with their strategic locations and their ability to flex and scale production,” he added.
Mr Wood said the workforce “has scaled rapidly” and now totals 780 employees.
