Monday, August 3, 2020
Orion Group Holdings (ORN)
Solid Quarter Amidst COVID-19. Increasing EBITDA Estimate.
Orion Group Holdings, based in Houston, Texas, is a specialty construction company within the Marine and Industrial Construction sectors, with operations focused in the continental United States and Caribbean. Revenue is split roughly 50/50 between a Marine Construction segment that provides marine facility, pipeline and structural construction services and a Commercial Concrete segment that provides turnkey concrete services in the light commercial and structural construction markets.
Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.
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Another strong quarter driven by solid execution, especially in Concrete. 2Q2020 gross profit of $20.7 million and EBITDA of $12.6 million beat our estimates of $18.7 million and $10.5 million, respectively. Revenue was 8% higher than expected. Gross margin of 11.3% and EBITDA margin of 6.9% were ~30-70 basis points better than our estimates. Main driver was stronger-than-expected Concrete EBITDA margin of 3.0%. Marine profitability remained high due to strong execution and solid equipment utilization.
2Q2020 backlog dropped to $528 million versus $610 million in 1Q2020 and $572 million at year-end 2019. Marine dropped $50 million to $312 million and Concrete fell $31 million off a record level to $216 million. Industry fundamentals remain positive despite state level concerns about COVID-19. YTD successful bids total …
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