TORONTO, July 28,
2022 /CNW/ - Aecon Group Inc. (TSX: ARE) ("Aecon" or
the "Company") today reported results for the second quarter of
2022 with 22% year-to-date growth in revenue and backlog of
$6.6 billion as at June 30, 2022.
"Demand for Aecon's services across Canada continues to be strong, particularly in
smaller and medium sized projects," said Jean-Louis Servranckx, President and Chief
Executive Officer, Aecon Group Inc. "As we navigate through broader
economic challenges in the short-term, we are focused on ensuring
solid execution on our projects and selectively adding to backlog
through a disciplined bidding approach that supports long-term
margin improvement, supported by a diversified and strong level of
backlog, growing recurring revenue programs and ongoing recovery in
traffic at the Bermuda
airport."
HIGHLIGHTS
- Revenue for the three months ended June
30, 2022 of $1,123 million was
$152 million, or 16 per cent, higher
compared to the same period in 2021.
- Adjusted EBITDA of $38.5 million
for the three months ended June 30,
2022 (margin of 3.4 per cent) compared to Adjusted EBITDA of
$61.3 million (margin of 6.3 per
cent) in the same period in 2021, and operating profit of
$5.1 million compared to operating
profit of $34.6 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 second quarter of 2021, Adjusted EBITDA of
$38.5 million decreased by
$10.1 million and operating profit of
$5.1 million decreased by
$16.8 million for the three months
ended June 30, 2022 compared to the
same period in 2021.
- Net loss of $6.4 million (diluted
loss per share of $0.10) for the
three months ended June 30, 2022
compared to a net profit of $17.6
million (diluted earnings per share of $0.27) during the same period in 2021, before
adjusting for the impact of CEWS in 2021.
- Reported backlog as at June 30,
2022 of $6,605 million
compares to backlog of $6,524 million
as at June 30, 2021.
- New contract awards of $1,305
million were booked in the second quarter of 2022 compared
to $1,582 million in the same period
in 2021. Year-to-date new awards of $2,517
million increased by $722
million compared to $1,795
million in the prior period.
- Connect Cité, a 50/50 general partnership between Aecon and EBC
in which Aecon is the lead partner, finalized a $219 million contract with ADM Aéroports de
Montréal to build the Montréal-Trudeau International Airport Réseau
express métropolitain (REM) Station project in Québec, with
additional scope and related pricing being finalized through a
collaborative process.
- Aecon-Graham Joint Venture, a 50/50 consortium, was awarded a
$273 million design-build contract
for the Buffalo Pound Water Treatment Plant Renewal Project in
Saskatchewan.
- As previously noted, ONxpress Transportation Partners, a
consortium in which Aecon holds a 50 per cent interest in a civil
joint venture, which is undertaking construction, and a 28 per cent
interest in a 25-year operations and maintenance partnership,
executed an agreement with Metrolinx and Infrastructure Ontario to
deliver the multi-billion-dollar GO Rail Expansion On-Corridor
Works project in the Greater Golden Horseshoe Area. The contract
begins with a two-year collaborative development phase to finalize
the scope, commercial structure, and pricing of various elements of
the project. Certain construction and early works activities will
commence during this phase, with operations and maintenance
anticipated to commence in the second quarter of 2024. Further
information on the contract value and schedule will be disclosed
once the development phase is completed.
- Subsequent to quarter end, Aecon was named one of the Corporate
Knights 2022 Best 50 Corporate Citizens in Canada, recognizing corporate sustainability
leadership and progress in Environmental, Social and Governance
(ESG) performance relative to industry peers.
CONSOLIDATED FINANCIAL HIGHLIGHTS(1)
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Three months
ended
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Six months
ended
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$ millions (except
per share amounts)
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June
30
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June
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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1,123.2
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$
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971.3
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$
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2,109.2
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$
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1,725.3
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Gross profit
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77.5
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91.9
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138.6
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149.2
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Marketing, general and
administrative expense
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(52.7)
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(44.3)
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(105.8)
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(92.0)
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Income from projects
accounted for using the equity method
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3.7
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3.8
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6.8
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6.4
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Other income
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0.1
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4.7
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2.3
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5.0
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Depreciation and
amortization
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(23.6)
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(21.4)
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(46.5)
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(44.2)
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Operating profit
(loss)
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5.1
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34.6
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(4.6)
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24.4
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Finance
income
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0.2
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0.1
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0.3
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0.3
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Finance cost
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(13.2)
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(11.1)
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(25.0)
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(21.8)
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Profit (loss) before
income taxes
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(8.0)
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23.7
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(29.3)
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2.8
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Income tax (expense)
recovery
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1.6
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(6.1)
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5.5
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(3.7)
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Profit
(loss)
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$
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(6.4)
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$
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17.6
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$
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(23.8)
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$
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(0.8)
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Gross profit
margin(4)
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6.9 %
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9.5 %
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6.6 %
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8.6 %
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MG&A as a
percent of revenue(4)
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4.7 %
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4.6 %
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5.0 %
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5.3 %
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Adjusted
EBITDA(2)
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$
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38.5
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$
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61.3
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$
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59.1
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$
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82.1
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Adjusted EBITDA
margin(3)
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3.4 %
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6.3 %
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2.8 %
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4.8 %
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Operating
margin(4)
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0.5 %
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3.6 %
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(0.2) %
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1.4 %
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Earnings (loss) per
share – basic
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$
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(0.10)
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$
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0.29
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$
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(0.39)
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$
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(0.01)
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Earnings (loss) per
share – diluted
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$
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(0.10)
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$
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0.27
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$
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(0.39)
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$
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(0.01)
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Backlog(2)
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$
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6,605
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$
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6,524
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(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.
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(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.
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(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.
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(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.
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Revenue for the three months ended June 30,
2022 of $1,123 million was
$152 million, or 16%, higher compared
to the second quarter of 2021. In the Construction segment, higher
revenue of $150 million was driven by
increases in civil ($52 million),
industrial ($40 million), utilities
($26 million), nuclear ($25 million), and urban transportation solutions
($7 million). In the Concessions
segment, higher revenue of $2 million
was primarily due to an increase in commercial flight operations at
the Bermuda International
Airport.
Operating profit of $5.1 million
for the three months ended June 30,
2022 decreased by $29.5
million compared to an operating profit of $34.6 million in the same period in 2021. The
largest element of the period-over-period change was lower gross
profit of $14.4 million. Included in
gross profit in the second quarter of 2021 was a net positive
impact from subsidy related to the Canada Emergency Wage Subsidy ("CEWS") program
($12.7 million in the three-month
period ended June 30, 2021), recorded
as cost recovery within gross profit in the Construction segment.
After adjusting for the impact of CEWS amounts reported in the
second quarter of 2021, gross profit in the second quarter of 2022
decreased by $1.7 million compared to
the same period in 2021. In the Construction segment, gross profit
decreased by $2.6 million primarily
from lower gross profit margin in urban transportation solutions
driven by an unfavourable margin adjustment on a light rail transit
("LRT") project in the quarter, as well as from lower gross profit
margin in civil and nuclear operations. These decreases were
partially offset by higher volume in each operating sector within
the Construction segment and higher gross profit margin in
industrial and utilities operations. In the Concessions segment,
gross profit increased by $0.7
million, primarily from an improvement in results from
airport operations at the Bermuda
International Airport.
MG&A for the three months ended June
30, 2022 increased by $8.4
million compared to the same period in 2021, primarily due
to higher personnel costs, project pursuit and bid costs, and other
discretionary costs. MG&A as a percentage of revenue for the
second quarter increased from 4.6% in 2021 to 4.7% in 2022.
Reported backlog as at June 30,
2022 of $6,605 million
compares to backlog of $6,524 million
as at June 30, 2021. New contract
awards of $1,305 million were
booked in the second quarter of 2022 compared to $1,582 million in the same period in 2021.
REPORTING SEGMENTS
Aecon reports its financial performance on the basis of two
segments: Construction and Concessions.
CONSTRUCTION SEGMENT
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Three months
ended
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Six months
ended
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$
millions
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June
30
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June
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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1,104.2
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$
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954.6
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$
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2,075.8
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$
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1,698.7
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Gross
profit
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$
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69.5
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$
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84.7
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$
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125.9
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$
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142.1
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Adjusted
EBITDA(1)
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$
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33.7
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$
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50.9
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$
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53.0
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$
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73.0
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Operating
profit
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$
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12.7
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$
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37.3
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$
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13.9
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$
|
41.3
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Gross profit
margin(3)
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6.3 %
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8.9 %
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6.1 %
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8.4 %
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Adjusted EBITDA
margin(2)
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3.1 %
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5.3 %
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2.6 %
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4.3 %
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Operating
margin(3)
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1.1 %
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3.9 %
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0.7 %
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2.4 %
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Backlog(1)
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$
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6,512
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$
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6,450
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(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.
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(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.
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Revenue in the Construction segment for the three months ended
June 30, 2022 of $1,104 million was $150
million, or 16%, higher compared to the same period in 2021.
Revenue was higher in civil operations ($52
million) driven by an increase in major projects work; in
industrial operations ($40 million)
from a higher volume of field construction work at chemical and
mining facilities and from increased activity on mainline pipeline
work in western Canada; in
utilities operations ($26 million)
primarily due to an increase in high-voltage electrical
transmission and telecommunications work; in nuclear operations
($25 million) driven by a higher
volume of refurbishment work at nuclear generating stations
primarily in the U.S., and in urban transportation solutions
($7 million) from an increase in LRT
work in Québec.
Operating profit in the Construction segment of $12.7 million in the three months ended
June 30, 2022 decreased by
$24.6 million compared to an
operating profit of $37.3 million in
the same period in 2021. Construction segment operating profit in
the second quarter of 2021 included a net positive impact from
amounts related to the CEWS program totalling $12.7 million recorded as cost recovery within
gross profit. After adjusting for the impact of CEWS amounts
reported in the second quarter of 2021, operating profit in the
second quarter of 2022 decreased by $11.9
million. This decrease resulted in part from lower gross
profit ($2.5 million after adjusting
for the impact of CEWS in the second quarter of 2021), primarily
due to a decrease in gross profit margin in urban transportation
solutions driven by an unfavourable margin adjustment on a LRT
project in the quarter, as well as from lower gross profit margin
in civil and nuclear operations. These decreases were partially
offset by higher volume in each operating sector within the
Construction segment and higher gross profit margin in industrial
and utilities operations. Also negatively impacting operating
profit in the period was higher MG&A ($1.6 million), higher depreciation and
amortization expense ($2.2 million)
related to increased equipment utilization, a decrease in
non-recurring gains on the sale of equipment and other assets
($4.4 million) and lower income from
equity projects and impact of foreign exchange ($1.2 million).
Construction backlog as at June 30,
2022 was $6,512 million, which
was $62 million higher than the same
time last year. Backlog increased period-over-period in civil
operations ($522 million) and
industrial ($28 million), and
decreased in urban transportation solutions ($355 million), nuclear ($78 million), and utilities ($55 million). New contract awards totaled
$1,279 million in the second quarter
of 2022 and $2,472 million
year-to-date, compared to $1,567
million and $1,767 million,
respectively, in the same periods last year. During the first six
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 and the Interstate-90 / State
Road-18 to Deep Creek Interchange Improvements and Widening project
near Snoqualmie, Washington. 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
|
|
|
Six months
ended
|
|
|
$
millions
|
|
June
30
|
|
|
June
30
|
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
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Revenue
|
$
|
19.2
|
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$
|
17.0
|
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$
|
33.6
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$
|
28.3
|
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Gross
profit
|
$
|
7.9
|
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$
|
7.3
|
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$
|
12.4
|
|
$
|
7.5
|
|
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Income from projects
accounted for using the equity method
|
$
|
3.4
|
|
$
|
2.8
|
|
$
|
6.8
|
|
$
|
5.7
|
|
|
Adjusted
EBITDA(1)
|
$
|
17.4
|
|
$
|
16.2
|
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$
|
31.0
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$
|
25.7
|
|
|
Operating profit
(loss)
|
$
|
5.2
|
|
$
|
3.5
|
|
$
|
6.7
|
|
$
|
0.5
|
|
|
Backlog(1)
|
|
|
|
|
|
|
$
|
93
|
|
$
|
74
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|
|
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|
|
|
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|
|
|
|
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(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.
|
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 June 30,
2022, revenue in the Concessions segment of $19 million was $2
million higher compared to the same period in
2021. Higher revenue was primarily due to an increase in
commercial flight operations ($3
million) 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. Included in Concessions' revenue for the three
months ended June 30, 2022 was $nil
of construction revenue that was eliminated on consolidation as
inter-segment revenue (2021 - $0.2
million).
Operating profit in the Concessions segment for the three months
ended June 30, 2022 increased by
$1.7 million compared to the same
period in 2021. The higher operating profit occurred primarily as a
result of 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.
RISK FACTORS
Refer to the detailed discussion on Risk Factors as outlined in
the Company's 2021 Annual Management's Discussion and Analysis of
Operating Results and Financial Condition ("MD&A") dated
March 1, 2022. These risk factors
could materially and adversely affect the Company's future
operating results and could cause actual events to differ
materially from those described in forward-looking statements
relating to the Company. These risks and uncertainties which
management reviews on a quarterly basis, have not materially
changed in the period since March 1,
2022 except as described below and under "10.2
Contingencies" of the Q2 2022 MD&A.
Four large fixed-price legacy projects entered into in 2018 or
earlier by joint ventures of which Aecon is a participant,
including the CGL pipeline project, are being negatively impacted
due to additional costs for which the joint ventures assert that
the owners are contractually responsible, including for, among
other things, unforeseeable site conditions, third party delays,
COVID-19, supply chain disruptions, and inflation related to labour
and materials. During the second quarter of 2022 these impacts
became more pronounced and have resulted, or are now expected to
result, in increased costs to the relevant joint ventures above
those originally forecast, in some cases materially. Each relevant
joint venture has submitted, or is in the process of developing for
submission, claims for compensation for these additional costs.
Other than the CGL pipeline project, none are currently in
litigation or arbitration. While Aecon and its partners continue to
work toward resolution of these claims for additional costs with
the respective owners of these projects, delayed and/or
unfavourable outcomes, whether individually or in the aggregate,
could result in material impacts to Aecon's earnings, cash flow,
liquidity and financial position. The fact that there are four
projects experiencing similar impacts concurrently elevates this
risk. While the Company believes each relevant joint venture has a
strong claim to recover at least a substantial portion of these
costs, the ultimate outcome of these matters cannot be predicted at
this time. See "Section 10.2.
Contingences" of the Q2 2022 MD&A, and "Section 13 – Risk
Factors" of the Q2 2022 MD&A and the Q4 2021 MD&A,
including under the headings "Risks Related to the COVID-19
Pandemic and Associated Supports under Government Assistance
Programs", "Large Project Risk", "Contractual Factors", "Litigation
Risk and Claims Risk", "Increases in the Cost of Raw Materials",
"Ongoing Financing Availability", "Adjustments in Backlog" and
"Force Majeure Events".
DIVIDEND
Aecon's next quarterly dividend of 18.5
cents per share will be paid on October 4, 2022 to shareholders of record as of
September 23, 2022.
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 22% and higher new project awards of 40%. In
addition, during the second quarter, 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 also encompasses a 25-year operations and
maintenance component. 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 $6.6
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 above 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 2022 and
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 June 30, 2022, Aecon had a
committed revolving credit facility of $600
million, of which $220 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 six months ended
June 30, 2022 and 2021 are available
at the end of this news release.
CONSOLIDATED BALANCE SHEETS
|
|
June
30
|
|
|
December
31
|
$
thousands (unaudited)
|
|
2022
|
|
|
2021
|
|
|
|
|
|
|
Cash and cash
equivalents and restricted cash
|
$
|
627,657
|
|
$
|
630,691
|
Other current
assets
|
|
1,688,768
|
|
|
1,515,025
|
Property, plant and
equipment
|
|
391,193
|
|
|
379,506
|
Other long-term
assets
|
|
801,670
|
|
|
761,595
|
Total
Assets
|
$
|
3,509,288
|
|
$
|
3,286,817
|
|
|
|
|
|
|
Current portion of
long-term debt – recourse
|
$
|
59,519
|
|
$
|
58,568
|
Current portion of
long-term project debt – non-recourse
|
|
3,184
|
|
|
2,957
|
Other current
liabilities
|
|
1,620,556
|
|
|
1,407,994
|
Long-term debt –
recourse
|
173,243
|
|
166,327
|
Long-term project debt
– non-recourse
|
358,577
|
|
354,580
|
Long-term portion of
convertible debentures
|
|
176,370
|
|
|
173,898
|
Other long-term
liabilities
|
|
217,544
|
|
|
208,927
|
|
|
|
|
|
|
Equity
|
|
900,295
|
|
|
913,566
|
Total Liabilities
and Equity
|
$
|
3,509,288
|
|
$
|
3,286,817
|
CONFERENCE CALL
A conference call and live webcast has been scheduled for
10 a.m. (Eastern Time) on Friday,
July 29, 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 646601. An accompanying presentation of
the second quarter 2022 financial results will be available after
market close on July 28, 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
July 29, 2022 at 1-866-813-9403 or
1-929-458-6194, or online until midnight on August 29, 2022. The access code is
082578. 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 and Instagram @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 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, finance income, finance cost and income tax expense
(recovery) (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 (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.
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" of
the 2022 Q2 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 six months
ended
|
|
|
|
June
30
|
|
June 30
|
June
30
|
|
June 30
|
|
|
|
2022
|
|
2021
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
1,123,238
|
|
$
|
971,286
|
$
|
2,109,152
|
|
$
|
1,725,316
|
Direct costs and
expenses
|
|
|
(1,045,709)
|
|
|
(879,416)
|
|
(1,970,531)
|
|
|
(1,576,113)
|
Gross
profit
|
|
|
77,529
|
|
|
91,870
|
|
138,621
|
|
|
149,203
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing, general and
administrative expense
|
|
|
(52,715)
|
|
|
(44,313)
|
|
(105,826)
|
|
|
(92,004)
|
Depreciation and
amortization
|
|
|
(23,595)
|
|
|
(21,399)
|
|
(46,469)
|
|
|
(44,247)
|
Income from projects
accounted for using the equity method
|
|
|
3,745
|
|
|
3,800
|
|
6,766
|
|
|
6,418
|
Other income
|
|
|
108
|
|
|
4,678
|
|
2,345
|
|
|
5,043
|
Operating profit
(loss)
|
|
|
5,072
|
|
|
34,636
|
|
(4,563)
|
|
|
24,413
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance
income
|
|
|
158
|
|
|
139
|
|
261
|
|
|
266
|
Finance cost
|
|
|
(13,186)
|
|
|
(11,071)
|
|
(24,973)
|
|
|
(21,846)
|
Profit (loss) before
income taxes
|
|
|
(7,956)
|
|
|
23,704
|
|
(29,275)
|
|
|
2,833
|
Income tax recovery
(expense)
|
|
|
1,605
|
|
|
(6,113)
|
|
5,481
|
|
|
(3,653)
|
Profit (loss) for
the period
|
|
$
|
(6,351)
|
|
$
|
17,591
|
$
|
(23,794)
|
|
$
|
(820)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
(loss) per share
|
|
$
|
(0.10)
|
|
$
|
0.29
|
$
|
(0.39)
|
|
$
|
(0.01)
|
Diluted earnings
(loss) per share
|
|
$
|
(0.10)
|
|
$
|
0.27
|
$
|
(0.39)
|
|
$
|
(0.01)
|
SOURCE Aecon Group Inc.