Business

Share trading is suspended at H&W as two-year losses mount to £113m

Company ‘encouraged’ by threefold growth in sales as it seeks assurances on £200m loan guarantee

Harland & Wolff has secured a first order in the US, just months after opening an office in Miami
The owners of the H&W shipyard in Belfast posted a three-fold increase in sales, but two-year losses mount to £113m
By Gary McDonald

Trading on shares on the AIM-listed Belfast shipyard owner Harland & Wolff Holdings were temporarily suspended first thing on Monday after the company reported a 2023 loss of £43 million, which follows a £70m loss the previous year.

But the company said it was “highly encouraged” by a threefold growth in revenues from £27.75m to £86.91m as it seeks to achieve the critical mass required to get to cash break-even levels.

Directors also said that company remains “on track” to achieve revenue of £200 million in its current financial year following key contract wins, notably on the £750m Fleet Solid Support Programme and the £61m SeaRose Midlife extension.

H&W says it also expects a decision on a £200m loan guarantee facility to be made once a new government is in place after the general election.

It is seeking the backing of UK Export Finance (UKEF) under its Export Development Guarantee (EDG) Scheme, which offers lenders a guarantee of up to 80% on the risk of their loan.

But directors warned: “Should there be any material delays to securing the facility post the general election, the company’s ability to execute new and large contracts would be adversely affected.”

H&W said it was able to reduce its full-year operating loss by 136% to £24.71m compared to a 2022 operating loss of £58.51m.

While the decrease in loss Eis movement in the right direction towards break-even and profitability”, the company’s interest burden increased from £12.29m to £18.37m.

H&W upsized its credit facility with Riverstone Credit Partners from $35 million to $115 million as at end-June 2024, and net debt at December 2023 stood at £92.38m compared to £81.13 million at the end of 2022.

This credit facility matures on December 31 this year, and as well as its discussions with UK Export Finance, it is talking to other counter-parties to refinance the Riverstone credit facility and obtain further working capital for its growing order book.

Those contracts have led to headcount across all H&W’s yards growing over the financial year from 1,010 to 1,512.

Harland & Wolff Group Holdings, which owns the famous Belfast shipyard, reported rising revenues in the first half of 2023, but its losses still came in at around £16m. Picture by Mal McCann.
Harland & Wolff Group Holdings, which owns the famous Belfast shipyard, reported rising revenues in 2023, but its losses still came in at £43m. Picture: Mal McCann.

Arun Raman, group chief finance officer at Harland & Wolff, said: “I am highly encouraged by the growth in revenues from FY22 to FY23 as we seek to achieve the critical mass required to get to cash break-even at EBITDA levels.

“Our financing costs are high, exacerbated by the rises in the base rate in FY23 and it is crucial to close the UKEF facility as soon as possible in order to provide the stable long-term working capital needed for securing large, multi-year contracts.

“Our engagement with UK Government continues in order to bring this deal to closure.”