Orion (ORN) Wins Multiple Deals for Concrete & Marine Units
Orion (ORN) is set to benefit from multiple contracts in the Concrete and Marine segments.
Orion Group Holdings, Inc. ORN has won several contracts under the Concrete and Marine segments for a combined value of approximately $44 million.
Under the Concrete unit, Orion received three contracts in the Dallas area and two in the Houston market. The first three contracts include data-center expansion, the construction of two cast-in-place retirement residential buildings, and a cold storage facility, valued at $3.8 million, $4.3 million and $5.6 million, respectively. The last two contracts under the segment, valued at $5.1 million and $9.2 million, respectively, include the construction of tilt-wall warehouses and a mixed-use office-retail-residential building. All five projects are expected to begin in first-quarter 2022. The first three contracts are likely to be completed in fourth-quarter 2022, while the other two are anticipated to be completed in first-quarter 2023.
Within the Marine business, the company won two project works within Texas market, worth $7.1 million and $4.1 million. The $7.1 million contract is provided by the U.S. Army Corps of Engineers for dredging in the Freeport Harbor Channel. The other contract is provided by a local port for a pipeline removal project. The first project work is set to be started in first-quarter 2022 and the other one is to begin late in fourth-quarter 2021. The works are likely to finish in second-quarter 2022. It has won a 5.2 million award for installing a bulkhead wall for shore protection, which is likely to commence in first-quarter 2022 with the work completed in second-quarter 2022.
Contract Wins to Boost Profitability
Orion derives revenues from various marine construction, dredging, turnkey concrete services and other specialty services contracts. These projects are of typically short duration and usually span for less than a year.
For the first nine months of 2021, contract revenues declined 18.7% year over year. The downside was primarily caused by severe winter weather in February, reduction in project activity in the marine segment and lower production volumes in the concrete segment due to weather-related impacts in the second quarter. Nonetheless, backlogs at September-end increased from the prior-year levels backed by improved macroeconomic environment and a potential infrastructure bill. The company remains optimistic about the robust project pipeline with good opportunities available in 2022.
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Shares of this Zacks Rank #3 (Hold) company have surged 1.2% compared with the industry’s 38.1% rally in the past year.
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