Philly Shipyard, Inc. (PSI), the sole operating subsidiary of Philly Shipyard ASA (XOAX: PHLY), announced on Apr 17 the authorization by the U.S. Department of Transportation’s Maritime Administration (MARAD) and subsequent order from TOTE Services, LLC (TOTE Services) for the construction of one additional National Security Multi-Mission Vessel (NSMV) – marking the fifth and final NSMV in the training ship series.
This modern vessel will replace the aging training vessel at California State University Maritime Academy in Vallejo, California.
Construction of the new vessel (NSMV 5) is expected to commence in 2023. The contractual delivery date for NSMV 5 is set in 2026.
The order was placed under the April 2020 contract with TOTE Services, which allows for the construction of up to five NSMVs. The initial award included the first two vessels in the NSMV program (NSMVs 1 and 2). The next two vessels in the NSMV program (NSMVs 3 and 4) were ordered in January 2021.
Today’s award for NSMV 5 is valued at approximately USD 300 million, bringing the total order intake under the contract for the five-ship program to be approximately USD 1.5 billion.
As announced in November 2021, PSI’s order backlog also includes a contract from Great Lakes Dredge & Dock Company, LLC to construct one Jones Act-compliant Subsea Rock Installation Vessel (SRIV), with a contract value of approximately USD 200 million. The SRIV will be constructed in between NSMVs 4 and 5.
“It is truly a great day for Philly Shipyard as we are now responsible for building the complete series of the NSMV program – a physical symbol of MARAD’s investment in the future of maritime education and training,” said Steinar Nerbovik, President and CEO of Philly Shipyard. “The NSMV program continues to mark a turning point in our Company’s transformation to serve both commercial and government markets.”
Mr. Nerbovik continued, “I would like to thank both TOTE Services and MARAD for their continued support. This award increases our order backlog to six vessels, which includes five NSMVs and one SRIV. Together with our union partners, workforce, and supplier network, our current backlog reinforces that shipbuilding is here to stay in Philadelphia.”
The NSMVs will be owned by MARAD, which developed the initial concept for the design. Construction of the NSMVs will not require any third-party financing.
Keel laying of NSMV 1 occurred in December 2021 and full production start of NSMV 2 occurred in November 2021 in accordance with plan. Pre-production activities on NSMVs 3 and 4 and SRIV 1 are ongoing.
The contract for the NSMV program has allowed Philly Shipyard to reconstitute its workforce as production ramps up. The total workforce at Philly Shipyard is currently around 1,200. It is expected that operations at Philly Shipyard will reach full capacity in mid-2022
ABOUT PHILLY SHIPYARD
Philly Shipyard ASA is a holding company with headquarters in Oslo, Norway, and an operating subsidiary in Philadelphia, PA, USA. Philly Shipyard ASA has been listed on Euronext Expand Oslo since December 2007. Aker Capital AS, a wholly-owned subsidiary of Aker ASA, is the majority shareholder, holding 57.56% of the shares as of 31 December 2020.
