The following is a summary of the Aecon Group Inc. (AEGXF) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Aecon Group Inc. reported a Q3 2024 revenue of $1.3 billion, up 3% from Q3 2023.

• Adjusted EBITDA was $127 million with a margin of 10%, compared to $32 million and a margin of 2.6% in Q3 2023, largely due to improvement from legacy projects.

• Operating profit was $81 million, down from $140 million in Q3 2023, primarily due to the net impact from legacy losses last year and the gain from the sale of a 49.9% interest in Skyport.

• The company has a reported backlog of $6 billion, with new contract awards of $1.1 billion in the quarter.

Business Progress:

• Aecon is focusing on growing in the decarbonization and energy transition sectors, expanding both in the U.S. and international markets.

• Development phase work is underway on major projects including the GO Expansion on Corridor Works project, the Scarborough Subway Extension, and the U.S. Virgin Islands Airport Redevelopment Project.

• Aecon's progressive design-build projects are expected to move into the construction phase between 2025 and 2026.

• Aecon entered into a definitive purchase agreement to acquire United Engineers & Constructors Inc., a nuclear and conventional power contractor, to enhance capabilities and access to the U.S. market.

Opportunities:

• The company anticipates revenue growth beginning in 2025, supported by a strong backlog and robust demand for Aecon's services across Canada.

• Opportunities for the Concessions segment to grow through additional Canadian and international projects, including projects with private sector clients focused on sustainability and the transition to a net-zero economy.

Risks:

• The remaining three legacy projects represent a potential risk, with Aecon focused on driving these projects to substantial completion by 2025. Continued attention is on managing the completion and satisfactory resolution of claims associated with these projects.

• Revenue in 2024 is impacted by the sales of previously held assets and the nearing completion of several large projects.

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