As of 31 December 2017, Philly Shipyard had an order backlog of USD 187.7 million. The contract with Matson (Hulls 029-030) provides for shipbuilding activity with delivery dates through Q1 2019.
On 20 November 2017, Philly Shipyard delivered Hull 028, the final product tanker in the four-ship order for Philly Tankers, a Jones Act shipping company that is majority-owned (but not controlled) by Philly Shipyard.
This vessel was delivered to Kinder Morgan, as assignee of Philly Tankers, ten days before its contract delivery date. At the end of the fourth quarter of 2017, Philly Shipyard was building two containerships under contract with Matson (Hulls 029-030).
During Q4 2017, the main engine was installed on Hull 029 and production activities continued on Hull 030.
In addition, during Q4 2017, Philly Shipyard continued design, planning and procurement activities related to the construction of up to four additional state-of-the-art, cost-effective and environment-friendly vessels for the Hawai’i containership trade.
By year-end, Philly Shipyard had ordered all major long-lead items for the first pair of these vessels (Hulls 031-032). During Q1 2018, this project was placed on hold and the Letter of Intent (LOI) between Philly Shipyard and TOTE for the construction and sale of these vessels expired in accordance with its terms.
While Philly Shipyard continues to actively seek the new orders and capital necessary to build Hulls 031 and 032, the delay it has experienced thus far has caused it, and will continue to cause it, to experience a slowdown of various departments.
Due to this interruption of Philly Shipyard’s building program, it is necessary to temporarily cease certain operations and place some employees in a layoff status. Accordingly, Philly Shipyard has reduced and will continue to adjust its workforce in line with its backlog.