McDermott dives further into negative EBITDA territory for 3Q21

McDermott booked negative USD 141m of EBITDA in 3Q21, compared to negative USD 36m in the same period last year, according to two sources familiar with the company. The company credited the loss to labor losses, fixed cost contracts, and the supply chain crisis, the sources said. 

For the quarter ended 30 September, revenue totaled USD 1.208bn, compared to USD 1.36bn in 2Q21 and USD 1.43bn in 3Q20, the sources and an additional source familiar added. 

During the quarter, the construction services provider booked USD 2.3bn in new contract orders, the three sources said. 

The sources pointed out that booking the orders has never been an investor concern, but more so margins and order completion.

As of 30 September, liquidity totaled USD 1.21bn through USD 920m of cash and USD 290m of revolver availability.

McDermott emerged from Chapter 11 in 2020, after exchanging USD 3bn in prepetition secured term loans for a 94% equity stake. The plan was confirmed in March, and the ad hoc group of TL holders was advised by Davis Polk and Centerview, the latter of which is now serving as the company’s financial advisor.

The delevered balance sheet features a USD 500m Libor+ 400bps take-back exit TL due 2025 that’s quoted 43.5/47, down from the 46/49 context before earnings, according to a trader. 

2021 Debtwire

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