Southland Holdings, Inc. (NYSE American: SLND and SLND WS), a prominent provider of specialized infrastructure construction services, released its financial results for the second quarter ended June 30, 2023. The report showcased both challenges and opportunities for the company in the current market landscape.
Revenue Decline: In Q2 2023, Southland Holdings reported total revenue of $257 million, representing a 5.9% decrease from the $273 million reported in the same quarter of the previous year. This decline reflects the challenges faced by the company during this period.
Gross Loss: Perhaps the most concerning aspect of Southland’s Q2 2023 report was the gross loss of $34 million. This is a stark contrast to the $38 million in gross profit recorded during the same quarter in 2022. The substantial swing from profit to loss underscores the difficulties Southland faced in maintaining profitability.
Net Loss Attributable to Stockholders: Southland Holdings reported a net loss attributable to stockholders of $13 million, or $(0.27) per share, for Q2 2023. This stands in stark contrast to the net income of $19 million reported for the same quarter in 2022. The shift to a net loss is concerning for shareholders and investors.
Adjusted Net Loss and EBITDA: Adjusted net loss for Q2 2023 was reported at $35 million, or $(0.76) per share. This contrasts with an adjusted net income of $19 million in Q2 2022. Additionally, the adjusted EBITDA for Q2 2023 showed a negative $42 million, compared to $35 million in the previous year. These figures highlight the substantial challenges Southland faced in the second quarter of 2023.
Backlog Growth: Despite the financial setbacks, Southland Holdings showed promise in its backlog, which stood at an impressive $2.7 billion, marking a 36% increase from $2.0 billion in June 2022. This increase in backlog demonstrates the company’s ability to secure future projects and provides hope for a potential turnaround.
Positive Cash Flow: One positive note in the Q2 2023 report was the positive cash flow from operating activities, which amounted to $24 million. This suggests that, despite financial losses, Southland maintained the ability to generate cash from its core operations.
In conclusion, Southland Holdings faced significant challenges in Q2 2023, with declining revenues, gross losses, and net losses. However, the company’s growing backlog and positive cash flow signal the potential for a recovery in the future. Shareholders and investors will likely keep a close eye on the company’s strategic initiatives and financial performance in the coming quarters to gauge its ability to rebound from the setbacks reported in this quarter.
