TORONTO, Oct. 26,
2022 /CNW/ - Aecon Group Inc. (TSX: ARE) ("Aecon" or
the "Company") today reported results for the third quarter of 2022
with 19% year-to-date revenue growth and backlog of $6.3 billion as at September 30, 2022.
"Aecon continues to see strong demand for its services across
Canada, particularly in smaller
and medium sized projects," said Jean-Louis
Servranckx, President and Chief Executive Officer, Aecon
Group Inc. "With strong and diversified backlog in hand, as well as
the GO Rail Expansion On-Corridor Works project which is not yet in
backlog, robust demand for recurring revenue programs driven by the
utilities sector, and ongoing recovery in airport traffic in
Bermuda, Aecon is well positioned
for ongoing growth."
HIGHLIGHTS
- Revenue for the three months ended September 30, 2022 of $1,321 million was $157
million, or 14 per cent, higher compared to the same period
in 2021.
- Adjusted EBITDA of $92.6 million
for the three months ended September 30,
2022 (margin of 7.0 per cent) compared to Adjusted EBITDA of
$95.5 million (margin of 8.2 per
cent) in the same period in 2021, and operating profit of
$61.0 million compared to operating
profit of $63.7 million in the same
period in 2021.
- After adjusting for the impact of amounts related to the
Canada Emergency Wage Subsidy
("CEWS") program in the third quarter of 2021, Adjusted EBITDA of
$92.6 million increased by
$4.4 million and operating profit of
$61.0 million increased by
$4.6 million for the three months
ended September 30, 2022 compared to
the same period in 2021.
- Net profit of $34.5 million
(diluted earnings per share of $0.45)
for the three months ended September 30,
2022 compared to a net profit of $38.4 million (diluted earnings per share of
$0.56) during the same period in
2021, before adjusting for the impact of CEWS in 2021.
- Reported backlog as at September 30,
2022 of $6,275 million
compares to backlog of $6,043 million
as at September 30, 2021.
- New contract awards of $991
million were booked in the third quarter of 2022 compared to
$682 million in the same period in
2021. Year-to-date new awards of $3,507
million increased by $1,030
million, or 42 per cent, compared to $2,477 million in the 2021 year-to-date
period.
- Aecon was awarded two contracts with an aggregate value of
$127 million for the Savannah River
Nuclear Solutions (SRNS) Demolition and Removal and SRNS Temporary
HVAC projects in Aiken, South
Carolina.
- Aecon released its inaugural Reconciliation Action Plan,
reaffirming its commitment to collaboratively seek meaningful ways
to engage in reconciliation by continuously working in unison with
Indigenous Peoples.
- Aecon Sustainability Solutions was established as a
collaborative business model to provide a single point of entry to
Aecon's diverse capabilities as we advise and work with clients in
reaching their sustainability and energy transition goals.
CONSOLIDATED FINANCIAL HIGHLIGHTS(1)
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Three months
ended
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Nine months
ended
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$ millions (except
per share amounts)
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September
30
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September
30
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2022
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2021
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2022
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2021
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Revenue
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$
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1,320.5
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$
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1,163.4
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$
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3,429.7
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$
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2,888.8
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Gross profit
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118.6
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123.2
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257.3
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272.5
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Marketing, general and
administrative expense
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(42.5)
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(42.4)
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(148.3)
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(134.4)
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Income from projects
accounted for using the equity method
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5.0
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4.0
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11.8
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10.4
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Other income
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3.6
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0.9
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6.0
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6.0
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Depreciation and
amortization
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(23.8)
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(22.1)
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(70.2)
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(66.4)
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Operating
profit
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61.0
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63.7
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56.5
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88.1
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Finance
income
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0.6
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0.1
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0.9
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0.4
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Finance cost
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(15.1)
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(11.8)
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(40.1)
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(33.7)
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Profit before income
taxes
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46.5
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52.0
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17.2
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54.8
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Income expense
recovery
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(12.0)
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(13.5)
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(6.5)
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(17.2)
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Profit
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$
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34.5
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$
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38.4
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$
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10.7
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$
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37.6
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Gross profit
margin(4)
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9.0 %
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10.6 %
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7.5 %
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9.4 %
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MG&A as a
percent of revenue(4)
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3.2 %
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3.6 %
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4.3 %
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4.7 %
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Adjusted
EBITDA(2)
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$
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92.6
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$
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95.5
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$
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151.7
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$
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177.6
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Adjusted EBITDA
margin(3)
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7.0 %
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8.2 %
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4.4 %
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6.1 %
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Operating
margin(4)
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4.6 %
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5.5 %
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1.6 %
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3.0 %
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Earnings per share –
basic
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$
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0.57
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$
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0.64
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$
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0.18
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$
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0.62
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Earnings per share –
diluted
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$
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0.45
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$
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0.56
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$
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0.16
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$
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0.59
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Backlog(2)
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$
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6,275
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$
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6,043
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(1)
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This Press Release
Presents Certain Non-gaap and Supplementary Financial Measures, As
Well As Non-gaap Ratios to Assist Readers in Understanding the
Company's Performance (Gaap Refers to Canadian Generally Accepted
Accounting Principles). Further Details on These Measures and
Ratios Are Included in the "Non-gaap and Supplementary Financial
Measures" and "Reconciliations and Calculations" Sections of This
Press Release.
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(2)
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This is a non-GAAP
financial measure. Refer to the "Non-GAAP and Supplementary
Financial Measures" and "Reconciliations and Calculations" sections
of this press release for more information on each non-GAAP
financial measure.
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(3)
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This is a non-GAAP
ratio. Refer to the "Non-GAAP and Supplementary Financial Measures"
and "Reconciliations and Calculations" sections of this press
release for more information on each non-GAAP ratio.
|
(4)
|
This is a
supplementary financial measure. Refer to the "Non-GAAP and
Supplementary Financial Measures" and "Reconciliations and
Calculations" sections of this press release for more information
on each supplementary financial measure.
|
Revenue for the three months ended September
30, 2022 of $1,321 million was
$157 million, or 14%, higher compared
to the third quarter of 2021. In the Construction segment, higher
revenue of $156 million was driven by
increases in civil ($167 million),
utilities ($22 million), and nuclear
operations ($9 million), partially
offset by lower revenue in industrial ($29
million) and urban transportation solutions ($13 million). In the Concessions segment, revenue
was unchanged quarter-over-quarter. Inter-segment revenue
eliminations decreased by $1 million
due to lower revenue between the Construction segment and
Corporate.
Operating profit of $61.0 million
for the three months ended September 30,
2022 decreased by $2.7 million
compared to an operating profit of $63.7
million in the same period in 2021. The largest driver of
the period-over-period change was lower gross profit of
$4.6 million. Included in gross
profit in the third quarter of 2021 was a net positive impact from
subsidy related to the Canada
Emergency Wage Subsidy ("CEWS") program ($7.3 million in the three-month period ended
September 30, 2021), recorded as cost
recovery within gross profit in the Construction segment. After
adjusting for the impact of CEWS amounts reported in the third
quarter of 2021, gross profit in the third quarter of 2022
increased by $2.7 million compared to
the same period in 2021. In the Construction segment, gross profit
increased by $4.1 million from higher
volume partially offset by lower gross profit margin primarily from
pipeline activity in industrial operations. In the Concessions
segment, gross profit decreased by $1.4
million, primarily from a reduction in results from airport
operations at the Bermuda
International Airport.
MG&A for the three months ended September 30, 2022 increased by $0.1 million compared to the same period in 2021,
and MG&A as a percentage of revenue for the third quarter
decreased from 3.6% in 2021 to 3.2% in 2022.
Reported backlog as at September 30,
2022 of $6,275 million
compares to backlog of $6,043 million
as at September 30, 2021. New
contract awards of $991 million and
$3,507 million were booked in the
third quarter and year-to-date, respectively, in 2022 compared to
$682 million and $2,477 million in the same periods in 2021.
REPORTING SEGMENTS
Aecon reports its financial performance on the basis of two
segments: Construction and Concessions.
CONSTRUCTION SEGMENT
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Three months
ended
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Nine months
ended
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$
millions
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September
30
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September
30
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2022
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2021
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2022
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2021
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Revenue
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$
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1,298.8
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$
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1,142.4
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$
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3,374.5
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$
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2,841.2
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Gross
profit
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$
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108.2
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$
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111.4
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$
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234.2
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$
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253.4
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Adjusted
EBITDA(1)
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$
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82.0
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$
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82.1
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$
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135.0
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$
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155.1
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Operating
profit
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$
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63.4
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$
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63.4
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$
|
77.3
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$
|
104.7
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Gross profit
margin(3)
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8.3 %
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9.7 %
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6.9 %
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8.9 %
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Adjusted EBITDA
margin(2)
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6.3 %
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7.2 %
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4.0 %
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5.5 %
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Operating
margin(3)
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4.9 %
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5.6 %
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2.3 %
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3.7 %
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Backlog(1)
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$
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6,179
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$
|
5,965
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(1)
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This is a non-GAAP
financial measure. Refer to the "Non-GAAP And Supplementary
Financial Measures" and "Reconciliations and Calculations" sections
of this press release for more information on each non-GAAP
financial measure.
|
(2)
|
This is a non-GAAP
ratio. Refer to the "Non-GAAP And Supplementary Financial Measures"
and "Reconciliations and Calculations" sections of this press
release for more information on each non-GAAP ratio.
|
(3)
|
This is a
supplementary financial measure. Refer to the "Non-GAAP And
Supplementary Financial Measures" and "Reconciliations and
Calculations" sections of this press release for more information
on each supplementary financial measure.
|
Revenue in the Construction segment for the three months ended
September 30, 2022 of $1,299 million was $156
million, or 14%, higher compared to the same period in 2021.
Revenue was higher in civil operations ($167
million) driven by an increase in both major projects and
roadbuilding construction work; in utilities operations
($22 million) primarily due to an
increase in telecommunications and high-voltage electrical
transmission work; and in nuclear operations ($9 million) driven by a higher volume of
refurbishment work at nuclear generating stations located in
Ontario. Partially offsetting
these increases was lower revenue in industrial operations
($29 million) driven primarily by
decreased activity on mainline pipeline work in western
Canada and in urban transportation
solutions ($13 million) primarily
from a decrease in light rail transit ("LRT") work in Ontario.
Operating profit in the Construction segment of $63.4 million in the three months ended
September 30, 2022 was unchanged
compared to the same period in 2021. Construction segment operating
profit in the third quarter of 2021 included a net positive impact
from amounts related to the CEWS program totalling $7.3 million recorded as cost recovery within
gross profit. After adjusting for the impact of CEWS amounts
reported in the third quarter of 2021, operating profit in the
third quarter of 2022 increased by $7.3
million. This increase resulted in part from higher gross
profit ($4.1 million after adjusting
for the impact of CEWS in the third quarter of 2021), due to
increased revenue partially offset by lower gross profit margin
primarily from pipeline activity in industrial operations. Also
positively impacting operating profit in the period was lower
MG&A ($2.6 million), an increase
in gains on the sale of equipment and other assets ($1.6 million), higher income from projects
accounted for using the equity method ($0.2
million), partially offset by higher depreciation and
amortization expense ($1.2 million)
related to increased equipment utilization.
Construction backlog as at September 30,
2022 was $6,179 million, which
was $214 million higher than the same
time last year. Backlog increased period-over-period in civil
operations ($513 million), industrial
($72 million), and nuclear
($46 million), and decreased in urban
transportation solutions ($399
million), and utilities ($18
million). New contract awards totaled $966 million in the third quarter of 2022 and
$3,438 million year-to-date, compared
to $657 million and $2,424 million, respectively, in the same periods
last year. During the first nine months of 2022, Aecon was awarded
a number of projects including the Kingstown Port Modernisation
Project Works, Lot 1: Primary Cargo Port in Saint Vincent and the
Grenadines, the Interstate-90 /
State Road-18 to Deep Creek Interchange Improvements and Widening
project near Snoqualmie,
Washington, and two contracts for the Savannah River Nuclear
Solutions (SRNS) Demolition and Removal and SRNS Temporary HVAC
projects in Aiken, South Carolina.
In addition, an Aecon joint venture was awarded the contract for
the Buffalo Pound Water Treatment Plant Renewal project in
Saskatchewan, an Aecon partnership
was awarded a contract for the Montréal-Trudeau International
Airport REM Station project in Québec, and an Aecon partnership was
awarded the Annacis Water Supply Tunnel project in British Columbia.
CONCESSIONS SEGMENT
|
|
|
Three months
ended
|
|
|
Nine months
ended
|
|
|
$
millions
|
|
September
30
|
|
|
September
30
|
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
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Revenue
|
$
|
21.8
|
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$
|
21.7
|
|
$
|
55.4
|
|
$
|
50.0
|
|
|
Gross
profit
|
$
|
10.4
|
|
$
|
11.8
|
|
$
|
22.7
|
|
$
|
19.3
|
|
|
Income from projects
accounted for using the equity method
|
$
|
3.4
|
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$
|
2.5
|
|
$
|
10.2
|
|
$
|
8.2
|
|
|
Adjusted
EBITDA(1)
|
$
|
20.7
|
|
$
|
21.8
|
|
$
|
51.7
|
|
$
|
47.5
|
|
|
Operating
profit
|
$
|
8.3
|
|
$
|
8.9
|
|
$
|
15.1
|
|
$
|
9.5
|
|
|
Backlog(1)
|
|
|
|
|
|
|
$
|
96
|
|
$
|
78
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
This is a non-GAAP financial measure. Refer to the "Non-GAAP And
Supplementary Financial Measures" and "Reconciliations and
Calculations" sections of this press release for more information
on each non-GAAP financial measure.
|
Aecon holds a 100% interest in Bermuda Skyport Corporation Limited
("Skyport"), the concessionaire responsible for the Bermuda airport's operations, maintenance and
commercial functions, and the entity managing and coordinating the
overall delivery of the Bermuda
International Airport Redevelopment Project over a 30-year
concession term that commenced in 2017. Aecon's participation in
Skyport is consolidated and, as such, is accounted for in the
consolidated financial statements by reflecting, line by line, the
assets, liabilities, revenue and expenses of Skyport. However,
Aecon's concession participation in the Eglinton Crosstown LRT,
Finch West LRT, Gordie Howe International Bridge, and Waterloo LRT
projects are joint ventures that are accounted for using the equity
method.
For the three months ended September 30,
2022, revenue in the Concessions segment of $22 million was unchanged compared to the same
period in 2021, while for the nine months ended September 30, 2022, revenue of $55 million was $5
million higher when compared to the same period in 2021.
Higher revenue for the nine months ended in 2022 was primarily due
to an increase in commercial flight operations at the Bermuda International Airport. Commercial
flight operations in Bermuda
continue to operate at a reduced volume due to COVID-19 compared to
pre-pandemic levels but have partially recovered from the more
severe impacts experienced in 2020 and 2021.
Operating profit in the Concessions segment for the three months
ended September 30, 2022 decreased by
$0.6 million compared to the same
period in 2021 primarily due to higher operating costs in the
current period at the Bermuda
International Airport. Operating profit for the nine months ended
September 30, 2022 increased by
$5.6 million, compared to the same
period in 2021 primarily as a result of an improvement in airport
operations at the Bermuda
International Airport.
Except for Operations and Maintenance ("O&M") activities
under contract for the next five years and that can be readily
quantified, Aecon does not include in its reported backlog expected
revenue from concession agreements. As such, while Aecon expects
future revenue from its concession assets, no concession backlog,
other than from such O&M activities for the next five years, is
reported.
OUTLOOK
Demand for Aecon's services across Canada continues to be strong, particularly in
smaller and medium sized projects, as evidenced by year-to-date
revenue growth of 19% and higher new project awards of 42%. In
addition, during 2022, an Aecon consortium was selected to deliver
the transformative, multi-billion-dollar long-term GO Rail
Expansion On-Corridor Works project in Ontario under a progressive design, build,
operate and maintain contract model which begins with a two-year
development phase leading into the main construction scope and a
25-year operations and maintenance component, none of which is yet
reflected in backlog. Aecon is also pre-qualified on a number of
project bids due to be awarded during the next twelve months and
has a strong pipeline of opportunities to further add to backlog
over time. With backlog of $6.3
billion and recurring revenue programs continuing to see
robust demand, driven by the utilities sector and ongoing recovery
in airport traffic in Bermuda,
Aecon is confident in strong revenue growth over the next few
years.
While volatile global and Canadian economic conditions are
impacting inflation, interest rates, and overall supply chain
efficiency, these factors have largely been and will continue to be
reflected in the pricing and commercial terms of the Company's
recent and prospective project awards and bids. However, certain
ongoing joint venture projects that were bid some years ago have
experienced impacts related, in part, to those factors, that will
require satisfactory resolution of claims with the respective
clients – see Section 13 "Risk Factors" in the third quarter 2022
Management's Discussion and Analysis ("MD&A") regarding the
risk on four large fixed-price legacy projects entered into in 2018
or earlier by joint ventures in which Aecon is a participant.
In the Construction segment, with strong demand, growing
recurring revenue programs, and diverse backlog in hand, Aecon is
focused on ensuring solid execution on its projects and selectively
adding to backlog through a disciplined bidding approach that
supports long-term margin improvement in this segment.
In the Concessions segment, in addition to expecting a gradual
recovery in travel through the Bermuda International Airport during the
balance of 2022 and through 2023, there are a number of
opportunities to add to the existing portfolio of Canadian and
international concessions in the next 12 to 24 months, including in
innovative projects with private sector clients that support a
collective focus on sustainability and the transition to a net-zero
economy.
As of September 30, 2022, Aecon
had a committed revolving credit facility of $600 million, of which $210 million was drawn, and $3 million was utilized for letters of credit.
The Company has no debt or working capital credit facility
maturities until the second half of 2023, except equipment loans
and leases in the normal course.
CONSOLIDATED RESULTS
The consolidated results for the three and nine months ended
September 30, 2022 and 2021 are
available at the end of this news release.
CONSOLIDATED BALANCE SHEETS
|
|
September
30
|
|
December
31
|
$
thousands (unaudited)
|
|
2022
|
|
2021
|
|
|
|
|
|
Cash and cash
equivalents and restricted cash
|
$
|
582,820
|
$
|
630,691
|
Other current
assets
|
|
1,854,160
|
|
1,515,025
|
Property, plant and
equipment
|
|
397,076
|
|
379,506
|
Other long-term
assets
|
|
840,963
|
|
761,595
|
Total
Assets
|
$
|
3,675,019
|
$
|
3,286,817
|
|
|
|
|
|
Current portion of
long-term debt – recourse
|
$
|
60,000
|
$
|
58,568
|
Current portion of
long-term project debt – non-recourse
|
|
3,387
|
|
2,957
|
Other current
liabilities
|
|
1,695,149
|
|
1,407,994
|
Long-term debt –
recourse
|
176,066
|
166,327
|
Long-term project debt
– non-recourse
|
380,124
|
354,580
|
Long-term portion of
convertible debentures
|
|
177,620
|
|
173,898
|
Other long-term
liabilities
|
|
232,169
|
|
208,927
|
|
|
|
|
|
Equity
|
|
950,504
|
|
913,566
|
Total Liabilities
and Equity
|
$
|
3,675,019
|
$
|
3,286,817
|
CONFERENCE CALL
A conference call and live webcast has been scheduled for
10 a.m. (Eastern Time) on Thursday,
October 27, 2022. Participants should dial 1-833-950-0062 or
1-226-828-7575 at least 10 minutes prior to the conference time.
The conference ID is 929102. An accompanying presentation of
the third quarter 2022 financial results will be available after
market close on October 26, 2022 at
www.aecon.com/investing.
A live webcast of the conference call will also be available at
www.aecon.com/InvestorCalendar.
Participants should join the webcast at least 15 minutes prior
to the conference time to register and install any necessary
software. For those unable to attend the call, a replay will be
available after 2 p.m. on
October 27, 2022 at 1-866-813-9403 or
1-929-458-6194, or online until midnight on November 24, 2022. The access code is
523531. A replay of the webcast will also be
available within 24 hours following the call.
ABOUT AECON
As a Canadian leader in construction and infrastructure
development with global expertise, Aecon Group Inc. (TSX: ARE)
strives to be the number one Canadian infrastructure company and is
proud to be recognized as one of the Best Employers and Best 50
Corporate Citizens in Canada.
Aecon safely, profitably and sustainably delivers integrated
solutions to private and public-sector clients through its
Construction segment in the Civil, Urban Transportation, Nuclear,
Utility and Industrial sectors, and provides project development,
financing, investment and management services through its
Concessions segment. Join our online community on Twitter,
LinkedIn, Facebook, Instagram and TikTok @AeconGroupInc.
NON-GAAP AND SUPPLEMENTARY
FINANCIAL MEASURES
This press release presents certain non-GAAP and supplementary
financial measures, as well as non-GAAP ratios to assist readers in
understanding the Company's performance (GAAP refers to Canadian
Generally Accepted Accounting Principles). These measures do not
have any standardized meaning and therefore are unlikely to be
comparable to similar measures presented by other issuers and
should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with GAAP.
Management uses these non-GAAP and supplementary financial
measures, as well as certain non-GAAP ratios to analyze and
evaluate operating performance. Aecon also believes the financial
measures defined below are commonly used by the investment
community for valuation purposes, and are useful complementary
measures of profitability, and provide metrics useful in the
construction industry. The most directly comparable measures
calculated in accordance with GAAP are profit (loss) attributable
to shareholders or earnings (loss) per share.
Throughout this press release, the following terms are used,
which are not found in the Chartered Professional Accountants of
Canada Handbook and do not have a standardized meaning under
GAAP.
Non-GAAP Financial Measures
A non-GAAP financial measure: (a) depicts the historical or
expected future financial performance, financial position or cash
flow of the Company; (b) with respect to its composition, excludes
an amount that is included in, or includes an amount that is
excluded from, the composition of the most comparable financial
measure presented in the primary consolidated financial statements;
(c) is not presented in the primary financial statements of the
Company; and (d) is not a ratio.
Non-GAAP financial measures presented and discussed in this
press release are as follows:
- "Adjusted EBITDA" represents operating profit (loss)
adjusted to exclude depreciation and amortization, the gain (loss)
on sale of assets and investments, and net income (loss) from
projects accounted for using the equity method, but including
"Equity Project EBITDA" from projects accounted for using the
equity method (Refer to the "Reconciliations and Calculations"
section of this press release for a quantitative reconciliation to
the most comparable financial measure).
- "Equity Project EBITDA" represents Aecon's
proportionate share of the earnings or losses from projects
accounted for using the equity method before depreciation and
amortization, finance income, finance cost and income tax expense
(recovery) (Refer to the "Reconciliations and Calculations" section
of this press release for a quantitative reconciliation to the most
comparable financial measure).
- "Backlog" means the total value of work that has not yet
been completed that: (a) has a high certainty of being performed as
a result of the existence of an executed contract or work order
specifying job scope, value and timing; or (b) has been awarded to
Aecon, as evidenced by an executed binding letter of intent or
agreement, describing the general job scope, value and timing of
such work, and where the finalization of a formal contract in
respect of such work is reasonably assured. Operations and
maintenance ("O&M") activities are provided under contracts
that can cover a period of up to 30 years. In order to provide
information that is comparable to the backlog of other categories
of activity, Aecon limits backlog for O&M activities to the
earlier of the contract term and the next five years.
Primary financial statements
Primary financial statements include any of the following: the
consolidated balance sheets, the consolidated statements of income,
the consolidated statements of comprehensive income, the
consolidated statements of changes in equity, and the consolidated
statements of cash flows.
Key financial measures presented in the primary financial
statements of the Company and discussed in this press release are
as follows:
- "Gross profit" represents revenue less direct costs and
expenses. Not included in the calculation of gross profit are
marketing, general and administrative expense ("MG&A"),
depreciation and amortization, income (loss) from projects
accounted for using the equity method, other income (loss), finance
income, finance cost, income tax expense (recovery), and
non-controlling interests.
- "Operating profit (loss)" represents the profit (loss)
from operations, before finance income, finance cost, income tax
expense (recovery) and non-controlling interests
The above measures are presented on the face of the Company's
consolidated statements of income and are not meant to be a
substitute for other subtotals or totals presented in accordance
with IFRS, but rather should be evaluated in conjunction with such
IFRS measures.
Non-GAAP Ratios
A non-GAAP ratio is a financial measure presented in the form of
a ratio, fraction, percentage or similar representation and that
has a non-GAAP financial measure as one of its components.
A non-GAAP ratio presented and discussed in this press release
is as follows:
- "Adjusted EBITDA margin" represents Adjusted EBITDA
as a percentage of revenue.
Supplementary Financial Measures
A supplementary financial measure: (a) is, or is intended to be,
disclosed on a periodic basis to depict the historical or expected
future financial performance, financial position or cash flow of
the Company; (b) is not presented in the financial statements of
the Company, (c) is not a non-GAAP financial measure; and (d) is
not a non-GAAP ratio.
Key supplementary financial measures presented discussed in this
press release are as follows:
- "Gross profit margin" represents gross profit as a
percentage of revenue.
- "Operating margin" represents operating profit (loss) as
a percentage of revenue.
- "MG&A as a percent of revenue" represents marketing,
general and administrative expense as a percentage of revenue.
RECONCILIATIONS AND
CALCULATIONS
Set out below is the calculation of Adjusted EBITDA by segment
for the three months and nine months ended September 30, 2022 and 2021:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
millions
|
|
|
Three months ended
September 30, 2022
|
Nine months ended
September 30, 2022
|
|
|
|
|
Construction
|
Concessions
|
Other costs
and
eliminations
|
Consolidated
|
Construction
|
Concessions
|
Other costs
and
eliminations
|
Consolidated
|
|
|
|
Operating profit
(loss)
|
$
|
63.4
|
$
|
8.3
|
$
|
(10.8)
|
$
|
60.9
|
$
|
77.3
|
$
|
15.1
|
$
|
(35.9)
|
$
|
56.5
|
|
|
|
Depreciation and
amortization
|
|
17.7
|
|
5.5
|
|
0.6
|
|
23.8
|
|
53.2
|
|
16.1
|
|
1.0
|
|
70.3
|
|
|
|
(Gain) on sale of
assets
|
|
(2.5)
|
|
-
|
|
-
|
|
(2.5)
|
|
(4.9)
|
|
-
|
|
-
|
|
(4.9)
|
|
|
|
Income from projects
accounted for using the equity method
|
|
(1.6)
|
|
(3.4)
|
|
-
|
|
(5.0)
|
|
(1.6)
|
|
(10.2)
|
|
-
|
|
(11.8)
|
|
|
|
Equity Project
EBITDA(1)
|
|
5.0
|
|
10.4
|
|
-
|
|
15.4
|
|
10.9
|
|
30.7
|
|
-
|
|
41.6
|
|
|
|
Adjusted
EBITDA(1)
|
$
|
82.0
|
$
|
20.7
|
$
|
(10.2)
|
$
|
92.6
|
$
|
135.0
|
$
|
51.7
|
$
|
(35.0)
|
$
|
151.7
|
|
|
|
|
$
millions
|
|
|
Three months ended
September 30, 2021
|
Nine months ended
September 30, 2021
|
|
|
|
Construction
|
Concessions
|
Other costs
and
eliminations
|
Consolidated
|
Construction
|
Concessions
|
Other costs
and
eliminations
|
Consolidated
|
|
|
Operating profit
(loss)
|
$
|
63.4
|
$
|
8.9
|
$
|
(8.7)
|
$
|
63.6
|
$
|
104.7
|
$
|
9.5
|
$
|
(26.1)
|
$
|
88.1
|
|
|
Depreciation and
amortization
|
|
16.6
|
|
5.3
|
|
0.3
|
|
22.2
|
|
49.6
|
|
15.7
|
|
1.1
|
|
66.4
|
|
|
(Gain) on sale of
assets
|
|
(1.0)
|
|
-
|
|
-
|
|
(1.0)
|
|
(6.6)
|
|
-
|
|
-
|
|
(6.6)
|
|
|
Income from projects
accounted for using the equity method
|
|
(1.5)
|
|
(2.5)
|
|
-
|
|
(4.0)
|
|
(2.1)
|
|
(8.3)
|
|
-
|
|
(10.4)
|
|
|
Equity Project
EBITDA(1)
|
|
4.6
|
|
10.1
|
|
-
|
|
14.7
|
|
9.5
|
|
30.6
|
|
-
|
|
40.1
|
|
|
Adjusted
EBITDA(1)
|
$
|
82.1
|
$
|
21.8
|
$
|
(8.4)
|
$
|
95.5
|
$
|
155.1
|
$
|
47.5
|
$
|
(25.0)
|
$
|
177.6
|
|
(1) This is
a non-GAAP financial measure. Refer to the "Non-GAAP and
Supplementary Financial Measures" section in this press release for
more information on each non-GAAP financial measure.
|
Set out below is the calculation of Equity Project EBITDA by
segment for the three months and nine months ended September 30, 2022 and 2021:
$
millions
|
|
|
|
Three months ended
September 30, 2022
|
|
Nine months ended
September 30, 2022
|
|
|
Aecon's
proportionate share of projects accounted for using the equity
method (1)
|
Construction
|
Concessions
|
Other costs
and
eliminations
|
Consolidated
|
Construction
|
Concessions
|
Other costs
and
eliminations
|
Consolidated
|
|
|
Operating
profit
|
$
|
4.8
|
$
|
10.4
|
$
|
-
|
$
|
15.2
|
$
|
10.4
|
$
|
30.7
|
$
|
-
|
$
|
41.1
|
|
|
Depreciation and
amortization
|
|
0.2
|
|
-
|
|
-
|
|
0.2
|
|
0.5
|
|
-
|
|
-
|
|
0.5
|
|
|
Equity Project
EBITDA(2)
|
$
|
5.0
|
$
|
10.4
|
$
|
-
|
$
|
15.4
|
$
|
10.9
|
$
|
30.7
|
$
|
-
|
$
|
41.6
|
|
$
millions
|
|
|
|
Three months ended
September 30, 2021
|
|
Nine months ended
September 30, 2021
|
|
|
Aecon's
proportionate share of projects accounted for using the equity
method (1)
|
Construction
|
Concessions
|
Other costs and
eliminations
|
Consolidated
|
Construction
|
Concessions
|
Other costs and
eliminations
|
Consolidated
|
|
|
Operating
profit
|
$
|
4.4
|
$
|
10.1
|
$
|
-
|
$
|
14.5
|
$
|
9.1
|
$
|
30.6
|
$
|
-
|
$
|
39.7
|
|
|
Depreciation and
amortization
|
|
0.2
|
|
-
|
|
-
|
|
0.2
|
|
0.4
|
|
-
|
|
-
|
|
0.4
|
|
|
Equity Project
EBITDA(2)
|
$
|
4.6
|
$
|
10.1
|
$
|
-
|
$
|
14.7
|
$
|
9.5
|
$
|
30.6
|
$
|
-
|
$
|
40.1
|
|
(1)
|
Refer to Note 10
"Projects Accounted for Using the Equity Method" in the September
30, 2022 interim condensed consolidated financial
statements.
|
(2)
|
This is a non-GAAP
financial measure. Refer to the "Non-GAAP and Supplementary
Financial Measures" section in this press release for more
information on each non-GAAP financial measure.
|
STATEMENT ON FORWARD-LOOKING
INFORMATION
The information in this press release includes certain
forward-looking statements. These forward-looking statements are
based on currently available competitive, financial and economic
data and operating plans but are subject to risks and
uncertainties. Forward-looking statements may include, without
limitation, statements regarding the operations, business,
financial condition, expected financial results, performance,
prospects, ongoing objectives, strategies and outlook for Aecon,
including statements regarding the sufficiency of Aecon's liquidity
and working capital requirements for the foreseeable future.
Forward-looking statements may in some cases be identified by words
such as "will," "plans," "believes," "expects," "anticipates,"
"estimates," "projects," "intends," "should" or the negative of
these terms, or similar expressions. In addition to events beyond
Aecon's control, there are factors which could cause actual or
future results, performance or achievements to differ materially
from those expressed or inferred herein including, but not limited
to: the timing of projects, unanticipated costs and expenses, the
failure to recognize and adequately respond to climate change
concerns or public and governmental expectations on climate
matters, general market and industry conditions and operational and
reputational risks, including large project risk and contractual
factors, and risks relating to the COVID-19 pandemic. Risk factors
are discussed in greater detail in Section 13 – "Risk Factors" in
the Third Quarter 2022 MD&A and in the 2021 Annual MD&A
dated March 1, 2022 and available
through SEDAR at www.sedar.com. Except as required by applicable
securities laws, forward-looking statements speak only as of the
date on which they are made and Aecon undertakes no obligation to
publicly update or revise any forward-looking statement, whether as
a result of new information, future events or otherwise.
CONSOLIDATED
STATEMENTS OF INCOME
|
(in thousands of
Canadian dollars, except per share amounts)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended
|
For the nine months
ended
|
|
|
|
September
30
|
|
September 30
|
September
30
|
|
September 30
|
|
|
|
2022
|
|
2021
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
1,320,514
|
|
$
|
1,163,441
|
$
|
3,429,666
|
|
$
|
2,888,757
|
Direct costs and
expenses
|
|
|
(1,201,882)
|
|
|
(1,040,191)
|
|
(3,172,413)
|
|
|
(2,616,304)
|
Gross
profit
|
|
|
118,632
|
|
|
123,250
|
|
257,253
|
|
|
272,453
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing, general and
administrative expense
|
|
|
(42,479)
|
|
|
(42,376)
|
|
(148,305)
|
|
|
(134,380)
|
Depreciation and
amortization
|
|
|
(23,775)
|
|
|
(22,111)
|
|
(70,244)
|
|
|
(66,358)
|
Income from projects
accounted for using the equity method
|
|
|
5,033
|
|
|
3,957
|
|
11,799
|
|
|
10,375
|
Other income
|
|
|
3,618
|
|
|
934
|
|
5,963
|
|
|
5,977
|
Operating
profit
|
|
|
61,029
|
|
|
63,654
|
|
56,466
|
|
|
88,067
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance
income
|
|
|
619
|
|
|
137
|
|
880
|
|
|
403
|
Finance cost
|
|
|
(15,146)
|
|
|
(11,820)
|
|
(40,119)
|
|
|
(33,666)
|
Profit before income
taxes
|
|
|
46,502
|
|
|
51,971
|
|
17,227
|
|
|
54,804
|
Income tax
expense
|
|
|
(12,013)
|
|
|
(13,542)
|
|
(6,532)
|
|
|
(17,195)
|
Profit for the
period
|
|
$
|
34,489
|
|
$
|
38,429
|
$
|
10,695
|
|
$
|
37,609
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
$
|
0.57
|
|
$
|
0.64
|
$
|
0.18
|
|
$
|
0.62
|
Diluted earnings per
share
|
|
$
|
0.45
|
|
$
|
0.56
|
$
|
0.16
|
|
$
|
0.59
|
SOURCE Aecon Group Inc.