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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