TORONTO, July 22, 2021 /CNW/ - July
22, 2021: Aecon Group Inc. (TSX: ARE) ("Aecon" or the
"Company") today reported results for the second quarter of 2021
with significant year-over-year increases in revenue, Adjusted
EBITDA, and earnings per share, with backlog of $6.5 billion as at June
30, 2021.
"During the quarter, new awards of nearly $1.6 billion resulted from strong demand for
Aecon's services across Canada in
smaller and medium sized projects, and also incorporated a number
of multi-year projects in the nuclear, civil operations and urban
transportation systems, and industrial sectors – illustrating the
diversity of Aecon's backlog by scale, duration, geography, and
sector," said Jean-Louis Servranckx,
President & Chief Executive Officer, Aecon Group Inc. "Aecon's
overall outlook for 2021 remains positive as construction continues
on a number of projects that ramped up in 2019 and 2020, backed by
the level of backlog and new awards achieved during the first half
of 2021 and the strong demand environment for Aecon's services
going forward, including recurring revenue programs."
HIGHLIGHTS
- Revenue for the three months ended June
30, 2021 of $971 million was
$192 million, or 25 per cent, higher
compared to the same period in 2020.
- Adjusted EBITDA of $61.3 million
for the second quarter of 2021 (margin of 6.3 per cent) improved by
$36.9 million compared to Adjusted
EBITDA of $24.4 million (margin of
3.1 per cent) in the second quarter of 2020.
- Operating profit of $34.6 million
for the three months ended June 30,
2021 compared to an operating loss of $0.8 million in the same period in 2020.
- Net income of $17.6 million
(diluted earnings per share of $0.27)
for the second quarter increased by $23.8
million compared to a net loss of $6.2 million (diluted loss per share of
$0.10) in the same period in
2020.
- Reported backlog as at June 30,
2021 of $6,524 million
compares to backlog of $7,255 million
as at June 30, 2020.
- New contract awards of $1,582
million were booked in the second quarter of 2021, compared
to $1,080 million in the same period
in 2020.
- Aecon consortiums were awarded several multi-year projects in
the second quarter:
-
- West End Connectors, a consortium in which Aecon holds a 40 per
cent interest, reached financial close on the $729 million Eglinton Crosstown West Extension
Advance Tunnel project in Toronto.
- The Steam Generator Replacement Team ("SGRT"), a joint venture
in which Aecon holds a 50 per cent interest, was awarded an
approximately $350 million contract
to replace steam generators at Units 3 and 4 of the Bruce Nuclear
Generating Station in Kincardine,
Ontario.
- Red River Solutions, a joint venture in which Aecon holds a 50
per cent interest, was awarded a $272
million design-build contract by the City of Winnipeg for the North End Sewage
Treatment Plant Upgrade: Headworks Facilities Project in
Manitoba.
- Aecon's alliance agreements with Enbridge Gas Inc. were
extended until the end of 2023, representing additional recurring
revenue opportunities in utilities operations, building on a
20-year relationship with Enbridge.
- Aecon completed a two-year extension of its $600 million revolving credit facility which now
matures on June 30, 2025. As part of
the extension, Aecon became the first Canadian construction company
to incorporate a sustainability-linked facility which is tied to
the Company's core environmental, social and governance ("ESG")
objectives.
CONSOLIDATED FINANCIAL HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
$ millions (except
per share amounts)
|
|
June
30
|
|
June
30
|
|
|
|
|
2021
|
|
|
2020
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
971.3
|
|
$
|
779.4
|
$
|
1,725.3
|
|
$
|
1,527.0
|
|
|
Gross
profit
|
|
91.8
|
|
|
53.8
|
|
149.2
|
|
|
115.1
|
|
|
Marketing, general
and administrative expense
|
|
(44.3)
|
|
|
(40.5)
|
|
(92.0)
|
|
|
(90.8)
|
|
|
Income from projects
accounted for using the equity method
|
|
3.8
|
|
|
2.7
|
|
6.4
|
|
|
5.5
|
|
|
Other
income
|
|
4.7
|
|
|
2.6
|
|
5.0
|
|
|
2.0
|
|
|
Depreciation and
amortization
|
|
(21.4)
|
|
|
(19.4)
|
|
(44.3)
|
|
|
(42.2)
|
|
|
Operating profit
(loss)
|
|
34.6
|
|
|
(0.8)
|
|
24.4
|
|
|
(10.4)
|
|
|
Finance
income
|
|
0.1
|
|
|
0.2
|
|
0.3
|
|
|
0.7
|
|
|
Finance
cost
|
|
(11.1)
|
|
|
(6.8)
|
|
(21.8)
|
|
|
(12.7)
|
|
|
Profit (loss)
before income taxes
|
|
23.7
|
|
|
(7.4)
|
|
2.8
|
|
|
(22.4)
|
|
|
Income tax (expense)
recovery
|
|
(6.1)
|
|
|
1.3
|
|
(3.7)
|
|
|
4.8
|
|
|
Profit
(loss)
|
$
|
17.6
|
|
$
|
(6.2)
|
$
|
(0.8)
|
|
$
|
(17.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
margin(4)
|
|
9.5%
|
|
|
6.9%
|
|
8.6%
|
|
|
7.5%
|
|
|
MG&A as a
percent of revenue(4)
|
|
4.6%
|
|
|
5.2%
|
|
5.3%
|
|
|
5.9%
|
|
|
Adjusted
EBITDA(2)
|
|
61.3
|
|
|
24.4
|
|
82.1
|
|
|
43.6
|
|
|
Adjusted EBITDA
margin(3)
|
|
6.3%
|
|
|
3.1%
|
|
4.8%
|
|
|
2.9%
|
|
|
Operating
margin(4)
|
|
3.6%
|
|
|
(0.1)%
|
|
1.4%
|
|
|
(0.7)%
|
|
|
Earnings (loss)
per share - basic
|
$
|
0.29
|
|
$
|
(0.10)
|
$
|
(0.01)
|
|
$
|
(0.29)
|
|
|
Earnings (loss)
per share - diluted
|
$
|
0.27
|
|
$
|
(0.10)
|
$
|
(0.01)
|
|
$
|
(0.29)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Backlog(2)
|
|
|
|
|
|
$
|
6,524
|
|
$
|
7,255
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
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" section of this press release.
|
(2)
|
This is a non-GAAP
financial measure. Refer to the "Non-GAAP and Supplementary
Financial Measures" section of this press release for more
information on each non-GAAP financial measure.
|
(3)
|
This is a non-GAAP
ratio. Refer to the "Non-GAAP and Supplementary Financial Measures"
section 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" section of this press release for
more information on each supplementary financial
measure.
|
Revenue for the three months ended June
30, 2021 of $971 million was $192 million, or 25%,
higher compared to the second quarter of 2020. Although revenue in
the second quarter of 2021 continued to be negatively impacted by
COVID–19, particularly in certain end market sectors, revenue for
the three months ended June 30, 2021
was higher in the Construction segment ($177 million), driven
by higher revenue in nuclear operations ($98 million), civil
operations and urban transportation systems ($54 million), and
utilities ($43 million). These increases were partially offset
by lower revenue in industrial operations ($18 million). In
the Concessions segment, revenue for the three months ended
June 30, 2021 was higher by
$8 million compared to the same period in 2020 primarily due
to a gradual improvement in commercial flight operations related to
the Bermuda International Airport
Redevelopment Project. Inter-segment revenue eliminations decreased
by $7 million, primarily due to lower revenue between the
Concessions and Construction segments related to the Bermuda International Airport Redevelopment
Project.
Operating profit of $34.6 million for the three months ended
June 30, 2021 increased by
$35.4 million compared to an
operating loss of $0.8 million
in the same period in 2020, driven by an increase in gross profit
of $38.0 million. In the Construction
segment, gross profit in the second quarter of 2021 increased by
$27.6 million primarily from higher
volume and gross profit margin in nuclear, civil operations and
urban transportation systems, and utilities. These increases were
partially offset by lower volume and gross profit margin from
industrial operations. In the Concessions segment, gross profit
increased by $10.6 million, primarily
at the Bermuda International
Airport Redevelopment Project from an increase in airport
operations compared to the second quarter of 2020 when all
commercial flight operations were suspended for reasons related to
the COVID-19 pandemic.
Reported backlog as at June 30,
2021 of $6,524 million
compares to backlog of $7,255 million as at June 30, 2020. New contract awards of
$1,582 million were booked in the
second quarter of 2021 compared to $1,080
million in the same period in 2020.
REPORTABLE SEGMENTS
Aecon reports its financial performance on the basis of two
segments: Construction and Concessions.
CONSTRUCTION SEGMENT
|
|
|
Three months
ended
|
|
|
Six months
ended
|
|
|
$
millions
|
|
June
30
|
|
|
June
30
|
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
954.6
|
|
$
|
777.8
|
|
$
|
1,698.7
|
|
$
|
1,513.2
|
|
|
Gross
profit
|
$
|
84.7
|
|
$
|
57.1
|
|
$
|
142.1
|
|
$
|
112.7
|
|
|
Adjusted
EBITDA(1)
|
$
|
50.9
|
|
$
|
27.7
|
|
$
|
73.0
|
|
$
|
44.2
|
|
|
Operating
profit
|
$
|
37.3
|
|
$
|
9.8
|
|
$
|
41.3
|
|
$
|
9.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
margin(3)
|
|
8.9%
|
|
|
7.3%
|
|
|
8.4%
|
|
|
7.5%
|
|
|
Adjusted EBITDA
margin(2)
|
|
5.3%
|
|
|
3.6%
|
|
|
4.3%
|
|
|
2.9%
|
|
|
Operating
margin(3)
|
|
3.9%
|
|
|
1.3%
|
|
|
2.4%
|
|
|
0.6%
|
|
|
Backlog(1)
|
|
|
|
|
|
|
$
|
6,450
|
|
$
|
7,192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
This is a non-GAAP
financial measure. Refer to the "Non-GAAP And Supplementary
Financial Measures" section 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"
section 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" section of this press release for
more information on each supplementary financial
measure.
|
Revenue in the Construction segment for the three months ended
June 30, 2021 of $955 million was $177
million, or 23%, higher compared to the same period in 2020.
Revenue was higher in nuclear operations ($98 million), driven by a ramp up in
refurbishment work at the Darlington and Kincardine nuclear generating stations, both
located in Ontario, in civil
operations and urban transportation systems ($54 million), driven by an increase in major
projects in both eastern and western Canada partially offset by lower roadbuilding
construction work, and in utilities operations ($43 million) primarily due to increased volume of
oil and gas distribution and telecommunications work partially
offset by lower high-voltage electrical transmission work. These
increases were partially offset by lower revenue in industrial
operations ($18 million) primarily
due to decreased activity on mainline pipeline work in western
Canada.
Operating profit in the Construction segment of $37.3 million in the three months ended
June 30, 2021 increased by
$27.5 million compared to an
operating profit of $9.8 million in
the same period in 2020. Second quarter operating profit increased
due to higher volume and gross profit margin in nuclear, civil
operations and urban transportation systems, and utilities. These
increases were partially offset by lower volume and gross profit
margin from industrial operations.
Construction backlog as at June 30,
2021 was $6,450 million,
which was $742 million lower than the same time last year.
Backlog decreased period-over-period in civil operations and urban
transportation systems ($519 million), industrial
($155 million), and nuclear ($138 million), and increased
in utilities ($70 million). New contract awards totaled
$1,567 million in the second
quarter of 2021 and $1,767 million year-to-date, compared to
$1,074 million and $1,970 million, respectively, in the same
periods last year. During the first six months of 2021, a number of
Aecon consortiums were awarded multi-year projects including the
replacement of steam generators at Units 3 and 4 of the nuclear
generating station in Kincardine,
Ontario, construction of the Eglinton Crosstown West
Extension Advance Tunnel project in Toronto, Ontario, and the North End Sewage
Treatment Plant Upgrade: Headworks Facilities Project in
Winnipeg, Manitoba.
CONCESSIONS SEGMENT
|
|
|
Three months
ended
|
|
|
Six months
ended
|
|
|
$
millions
|
|
June
30
|
|
|
June
30
|
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
17.0
|
|
$
|
8.5
|
|
$
|
28.3
|
|
$
|
35.6
|
|
|
Gross
profit
|
$
|
7.3
|
|
$
|
(3.3)
|
|
$
|
7.5
|
|
$
|
2.4
|
|
|
Income from
projects accounted for using the equity method
|
$
|
2.8
|
|
$
|
2.3
|
|
$
|
5.7
|
|
$
|
5.6
|
|
|
Adjusted
EBITDA(1)
|
$
|
16.2
|
|
$
|
4.8
|
|
$
|
25.7
|
|
$
|
19.1
|
|
|
Operating profit
(loss)
|
$
|
3.5
|
|
$
|
(2.3)
|
|
$
|
0.5
|
|
$
|
0.2
|
|
|
Backlog(1)
|
|
|
|
|
|
|
$
|
74
|
|
|
63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
This is a non-GAAP
financial measure. Refer to Section 4 "Non-GAAP and Supplementary
Financial Measures" in this MD&A 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 Light
Rail Transit ("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 June 30,
2021, revenue in the Concessions segment of $17 million
was $8 million higher compared to the same period in 2020.
Higher revenue in the second quarter was due to an increase in
airport operations at the Bermuda
International Airport Redevelopment Project compared to the second
quarter of 2020 when all commercial flight operations were
suspended for reasons related to the COVID-19 pandemic
($13 million), partially offset by lower construction revenue
related to this project which was substantially completed in the
fourth quarter of 2020 ($6 million). Notwithstanding the above
increase, for reasons related to COVID-19, commercial flight
operations in Bermuda continue to
operate at a reduced volume compared to pre-pandemic levels.
Included in Concessions' revenue for the three months ended
June 30, 2021 was $0.2 million of construction revenue that
was eliminated on consolidation as inter-segment revenue (2020 -
$6.1 million).
Operating profit in the Concessions segment for the three months
ended June 30, 2021 increased by
$5.8 million compared to the
same period in 2020. The higher operating profit occurred primarily
in the Bermuda International
Airport Redevelopment Project and resulted from the above noted
changes in airport construction and operations.
Except for 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.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Aecon's financial position, liquidity and capital resources
remain strong, and are expected to be sufficient to finance its
operations and working capital requirements for the foreseeable
future. As at June 30, 2021, Aecon
had a committed revolving credit facility of $600 million, of
which $10 million was drawn and $10 million utilized for
letters of credit. On June 30, 2021,
Aecon completed a two-year extension of its revolving credit
facility which now matures on June 30,
2025. As part of the extension, the Company incorporated a
sustainability-linked facility which is tied to the Company's core
environmental, social and governance ("ESG") objectives. In the
first quarter of 2021, the performance security guarantee facility
provided by Export Development Canada to support letters of credit
was increased from $700 million to
$900 million. On June 30, 2021, this facility was extended to
June 30, 2023. This facility, when
combined with Aecon's committed revolving credit facility, provides
Aecon with committed credit facilities for working capital and
letter of credit requirements totaling $1,500 million. The Company has no debt or
working capital credit facility maturities until the second half of
2023, except equipment and property loans and leases in the normal
course. As at June 30, 2021, Aecon
was in compliance with all debt covenants related to its credit
facility.
DIVIDEND
Aecon's next quarterly dividend of 17.5
cents per share will be paid on October 4, 2021 to shareholders of record as of
September 24, 2021.
OUTLOOK
Aecon's overall outlook for 2021 remains positive, supported by
strong backlog, recurring revenue programs, and pipeline of bidding
opportunities for new work. During the second quarter, new awards
of almost $1.6 billion resulted from
strong demand for Aecon's services across Canada in smaller and medium sized projects,
and also incorporated a number of multi-year projects in the
nuclear, civil operations and urban transportation systems, and
industrial sectors. Aecon is also pre-qualified on a number of
large project bids due to be awarded over the next twelve to
eighteen months. Recurring revenue is expected to continue to grow
in both the utilities sector, based on the capital investment plans
of a number of key clients, particularly in telecommunications and
power-related work, and the Concessions segment as airport traffic
in Bermuda continues its recovery
from the impact of the COVID-19 pandemic. Furthermore, the Company
expects that demand for its services will remain healthy for the
foreseeable future as the federal government and provincial
governments across Canada have
identified investment in infrastructure as a key source of stimulus
as part of economic recovery plans.
While the COVID-19 pandemic is expected to continue to have some
impact in moderating overall revenue and profitability growth
expectations, the Company is encouraged by the generally positive
trend in the lifting of social and economic restrictions in recent
months in Canada. Although the
operating environment continues to be impacted by the requirement
to follow client decisions related to schedules or operating
policies or due to broader government directives to modify work
practices to meet relevant health and safety standards, the impact
on revenue is expected to lessen going forward if the current trend
continues. Until normal operations fully resume, however, there is
no guarantee that all related costs will be recovered and therefore
it is possible that future project margins could be impacted.
In the Concessions segment, commercial operations at the
Bermuda International Airport
continue to be challenged by COVID-19 related travel restrictions,
which have significantly impacted the aviation industry. An
increase in vaccination rates and the easing of travel restrictions
during the second quarter provided early signs of a rebound, from
very low levels, in passenger traffic for the aviation industry.
Increasing vaccination rates and easing travel restrictions in the
second half of the year are expected to lead to a corresponding
gradual improvement in travel through the Bermuda airport during the remainder of the
year and into 2022.
As noted above, the overall outlook for 2021 remains positive as
construction continues on a number of projects that ramped up in
2019 and 2020, and due to the level of backlog and new awards
during 2021 and the strong demand environment for Aecon's services
going forward, including recurring revenue programs, all subject to
the unknown impacts of COVID-19 going forward.
CONSOLIDATED RESULTS
The consolidated results for the three months ended June 30, 2021 and 2020 are available at the end
of this news release.
CONSOLIDATED BALANCE SHEET
|
|
June
30
|
|
June
30
|
$
thousands
|
|
2021
|
|
2020
|
|
|
|
|
|
Cash and cash
equivalents and restricted cash
|
$
|
650,729
|
$
|
769,478
|
Other current
assets
|
|
1,491,535
|
|
1,431,532
|
Property, plant and
equipment
|
|
372,235
|
|
362,177
|
Other long-term
assets
|
|
708,873
|
|
724,212
|
Total
Assets
|
$
|
3,223,372
|
$
|
3,287,399
|
|
|
|
|
|
Current portion of
long-term debt - recourse
|
$
|
53,260
|
$
|
56,568
|
Other current
liabilities
|
|
1,413,463
|
|
1,473,034
|
Long-term debt -
recourse
|
|
167,052
|
|
143,534
|
Long-term project
debt - non-recourse
|
|
349,436
|
|
358,871
|
Long-term portion of
convertible debentures
|
|
171,460
|
|
169,057
|
Other long-term
liabilities
|
|
209,348
|
|
212,228
|
|
|
|
|
|
Equity
|
|
859,353
|
|
874,107
|
Total Liabilities
and Equity
|
$
|
3,223,372
|
$
|
3,287,399
|
CONFERENCE CALL
A conference call and live webcast has been scheduled for
10 a.m. (Eastern Time) on Friday,
July 23, 2021. Participants should dial 1-877-823-8624 or
647-689-5656 at least 10 minutes prior to the conference time.
The conference ID is 5117389. An accompanying
presentation of the second quarter 2021 financial results will be
available after market close on July 22,
2021 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 July 23,
2021 at 1-800-585-8367 or 416-621-4642 until midnight on
August 6, 2021. The conference ID
is 5117389. 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 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 and Instagram
@AeconGroup.
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 Section 9 - "Quarterly Financial Data" in
the Company's Management's Discussion and Analysis ("MD&A")
available through the System for Electronic Document Analysis and
Retrieval at www.sedar.com. 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, net
financing expense and income taxes (refer to Section 9 - "Quarterly
Financial Data" in the Company's MD&A available through the
System for Electronic Document Analysis and Retrieval at
www.sedar.com. 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 or losses from projects
accounted for using the equity method, foreign exchange, net
financing expense, gain (loss) on sale of assets and investments,
income taxes, and non-controlling interests.
- "Operating profit (loss)" represents the profit (loss)
from operations, before net financing expense, income taxes 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 International Financial Reporting Standards ("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.
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 Management's Discussion and Analysis filed on February 25, 2021. 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, except as required by applicable law.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands of
Canadian dollars, except per share amounts)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended
|
For the six months
ended
|
|
June
30
|
June 30
|
June
30
|
June 30
|
|
2021
|
2020
|
2021
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
971,286
|
$
|
779,448
|
$
|
1,725,316
|
$
|
1,526,963
|
Direct costs and
expenses
|
|
(879,416)
|
|
(725,614)
|
|
(1,576,113)
|
|
(1,411,913)
|
Gross
profit
|
|
91,870
|
|
53,834
|
|
149,203
|
|
115,050
|
|
|
|
|
|
|
|
|
|
Marketing, general
and administrative expense
|
|
(44,313)
|
|
(40,450)
|
|
(92,004)
|
|
(90,830)
|
Depreciation and
amortization
|
|
(21,399)
|
|
(19,394)
|
|
(44,247)
|
|
(42,175)
|
Income from projects
accounted for using the equity method
|
|
3,800
|
|
2,650
|
|
6,418
|
|
5,541
|
Other
income
|
|
4,678
|
|
2,587
|
|
5,043
|
|
1,990
|
Operating profit
(loss)
|
|
34,636
|
|
(773)
|
|
24,413
|
|
(10,424)
|
|
|
|
|
|
|
|
|
|
Finance
income
|
|
139
|
|
163
|
|
266
|
|
746
|
Finance
cost
|
|
(11,071)
|
|
(6,804)
|
|
(21,846)
|
|
(12,745)
|
Profit (loss)
before income taxes
|
|
23,704
|
|
(7,414)
|
|
2,833
|
|
(22,423)
|
Income tax (expense)
recovery
|
|
(6,113)
|
|
1,251
|
|
(3,653)
|
|
4,846
|
Profit (loss) for
the period
|
$
|
17,591
|
$
|
(6,163)
|
$
|
(820)
|
$
|
(17,577)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
(loss) per share
|
$
|
0.29
|
$
|
(0.10)
|
$
|
(0.01)
|
$
|
(0.29)
|
Diluted earnings
(loss) per share
|
$
|
0.27
|
$
|
(0.10)
|
$
|
(0.01)
|
$
|
(0.29)
|
SOURCE Aecon Group Inc.