Orion Marine: Full Year Growth Expected
Orion Marine Group, Inc., a heavy civil marine contractor serving the infrastructure sector, has announced an update on the Company’s outlook and end markets.
“As 2014 concludes and the Company begins a new year, it is pleased with both its strong levels of asset utilization during the fourth quarter of 2014 and its bid market outlook for 2015,” they stated.
As mentioned previously, improved asset utilization, partially as a result of an increase in U.S. Army Corps of Engineers lettings, benefited the Company in the fourth quarter. Also, as expected, the expansion project for the Port of Houston was a solid contributor to utilization in the fourth quarter.
During the fourth quarter the Company bid on approximately $290 million worth of opportunities and was successful on approximately $60 million, representing a win rate of approximately 21%. Additionally, the Company currently has approximately $230 million worth of bids outstanding, of which it is the apparent low bidder on approximately $50 million.
As the Company looks towards 2015, it believes that market opportunity exists to support continued growth. While there are some gaps to fill in project schedules in the first half of the year, the Company believes there are sufficient bid opportunities to see full year growth in 2015.
Federal & State Update
“The Company was pleased that Congress funded the Federal Government, including the Corps, for the balance of its fiscal 2015 year, prior to the expiration of the continuing resolution last month,” they said.
This should allow the Corps to put projects out for bid on a more consistent, predictable schedule over the course of the next nine months. Preliminary advertisement schedules provided by the Corps for fiscal 2015 indicate the Company may see increased bid opportunities year over year.
Additionally, the Company continues to see a steady level of bid opportunities from state departments of transportation related to bridge construction, ferry landings, maintenance and repair.
Local & Private Update
Port expansion and infrastructure improvements continue to be a source of strong bid opportunities for the Company. As the use of waterborne transportation to move goods and people steadily continues to increase along with general vessel size, the Company expects demand for deepening projects, infrastructure improvements and maintenance services to remain strong for the foreseeable future.
Private sector opportunities continue, as demand for expanded waterside infrastructure remains strong. With a portion of this demand being driven by energy related customers, the Company is closely monitoring the market for any effect the recent drop in oil and gas prices may have on future bid opportunities.
The Company has not seen a drop off in the amount of work it is currently tracking and expects demand to remain strong for the foreseeable future as year over year the amount of bid activity in this sector has increased. The Company believes this is a function of record levels of domestic energy production coupled with a lack of growth in the country’s refining capacity and the waterside infrastructure that supports it.
Orion Marine will continue to closely monitor the market for any impact the energy markets may have on its future bid activity.