TORONTO, April 23, 2025 (GLOBE NEWSWIRE) — Aecon Group Inc. (TSX: ARE) (“Aecon” or the “Company”) today reported results for the first quarter of 2025.
“With record backlog of $9.7 billion, contributions from strategic acquisitions, solid recurring revenue, and a strong bid pipeline, revenue in 2025 is expected to be stronger than 2024,” said Jean-Louis Servranckx, President and Chief Executive Officer, Aecon Group Inc. “Aecon continues to maintain a disciplined capital allocation approach to deliver long-term shareholder value through acquisitions and divestitures, organic growth, dividends, capital investments, and common share buybacks on an opportunistic basis.”
HIGHLIGHTS
All quarterly financial information contained in this news release is unaudited.
- Revenue for the three months ended March 31, 2025 of $1,062 million was $215 million, or 25%, higher compared to the same period in 2024.
- Operating loss of $40.7 million for the three months ended March 31, 2025 compared to an operating loss of $4.2 million for the same period in 2024.
- Adjusted EBITDA(1)(2) of $3.6 million for the three months ended March 31, 2025 (Adjusted EBITDA margin(3) of 0.3%) compared to Adjusted EBITDA of $32.9 million (Adjusted EBITDA margin of 3.9%) in the same period in 2024. The decrease in the quarter was largely due to a negative gross profit of $28.6 million on a fixed price legacy project. The fixed price legacy projects are discussed in Section 5 “Recent Developments” and Section 10.2 “Contingencies” in the Company’s March 31, 2025 Management’s Discussion and Analysis (“MD&A”), and Section 13 “Risk Factors” in the 2024 Annual MD&A.
- Loss attributable to shareholders of $37.9 million (diluted loss per share of $0.60) for the three months ended March 31, 2025 compared to loss attributable to shareholders of $6.1 million (diluted loss per share of $0.10) in the same period in 2024.
- Reported backlog at March 31, 2025 of $9,696 million compared to backlog of $6,273 million at March 31, 2024. The March 31, 2025 balance represents the highest reported backlog in the history of Aecon. New contract awards of $4,096 million were booked in the first quarter of 2025 compared to $963 million in the same period in 2024.
- An Aecon joint operation was awarded a collaborative contract by Ontario Power Generation in the fourth quarter of 2024 which includes the definition phase work for the retube, feeder and boiler replacement of Units 5, 6, 7 and 8 at the Pickering Nuclear Generating Station in Ontario. Aecon holds a 50% interest in the joint operation and added approximately $500 million of additional contract scope to its Construction segment backlog in the first quarter of 2025.
- An Aecon-led consortium reached commercial close on the Scarborough Subway Extension Stations, Rail and Systems progressive design-build project. Aecon’s share of the target price contract is valued at over $2.8 billion and was added to backlog in the first quarter of 2025.
- On April 22, 2025, Aecon was recognized as one of Canada’s Greenest Employers by Mediacorp Canada Inc. as a leader in creating an organizational culture of environmental awareness. Aecon also released its sixth annual Sustainability Report, which is available at aecon.com/sustainability.
CONSOLIDATED FINANCIAL HIGHLIGHTS
| Three months ended | ||||||||||
| $ millions (except per share amounts) | March 31 | |||||||||
| 2025 | 2024 | |||||||||
| Revenue | $ | 1,061.7 | $ | 846.6 | ||||||
| Gross profit | 41.8 | 62.8 | ||||||||
| Marketing, general, and administrative expense | (56.9 | ) | (52.1 | ) | ||||||
| Income (loss) from projects accounted for using the equity method | (0.4 | ) | 2.3 | |||||||
| Other income | 0.8 | 1.7 | ||||||||
| Depreciation and amortization | (26.0 | ) | (18.8 | ) | ||||||
| Operating loss | (40.7 | ) | (4.2 | ) | ||||||
| Finance income | 1.6 | 3.2 | ||||||||
| Finance cost | (10.0 | ) | (5.7 | ) | ||||||
| Loss before income taxes | (49.2 | ) | (6.7 | ) | ||||||
| Income tax recovery | 11.1 | 0.6 | ||||||||
| Loss | (38.1 | ) | (6.1 | ) | ||||||
| Non-controlling interests | 0.1 | – | ||||||||
| Loss attributable to shareholders | $ | (37.9 | ) | $ | (6.1 | ) | ||||
| Gross profit margin(4) | 3.9 | % | 7.4 | % | ||||||
| MG&A as a percent of revenue(4) | 5.4 | % | 6.2 | % | ||||||
| Adjusted EBITDA(2) | $ | 3.6 | $ | 32.9 | ||||||
| Adjusted EBITDA Margin(3) | 0.3 | % | 3.9 | % | ||||||
| Operating margin(4) | (3.8 | )% | (0.5 | )% | ||||||
| Adjusted loss attributable to shareholders(2) | $ | (34.0 | ) | $ | (9.0 | ) | ||||
| Loss per share – basic | $ | (0.60 | ) | $ | (0.10 | ) | ||||
| Loss per share – diluted | $ | (0.60 | ) | $ | (0.10 | ) | ||||
| Adjusted loss per share − basic(2) | $ | (0.54 | ) | $ | (0.14 | ) | ||||
| Adjusted loss per share − diluted(2) | $ | (0.54 | ) | $ | (0.14 | ) | ||||
| Backlog (at end of period) | $ | 9,696 | $ | 6,273 | ||||||
(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” and “Reconciliations and Calculations” sections of this press release.
(2) 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.
(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 March 31, 2025 of $1,062 million was $215 million, or 25%, higher compared to the same period in 2024. Revenue was higher in the Construction segment by $214 million driven by increases in nuclear ($125 million), industrial ($65 million), utilities ($15 million), and civil operations ($11 million), partially offset by lower revenue in urban transportation solutions ($2 million). This higher revenue was driven primarily by an increased volume of refurbishment work at nuclear generating stations in Ontario and the U.S., and from a higher volume of field construction work at industrial facilities in western Canada. In the Concessions segment, revenue was lower by $1 million primarily from a decrease in management and development fees related to light rail transit (“LRT”) projects.
Operating loss of $40.7 million for the three months ended March 31, 2025 was unfavourable by $36.5 million compared to an operating loss of $4.2 million in the same period in 2024. The decline in the period was driven by a decrease in gross profit of $21.0 million. In the Construction segment, lower gross profit of $20.6 million resulted primarily from lower gross profit margin in civil operations and urban transportation solutions which more than offset the positive impact of higher volume and gross profit in nuclear, industrial, and utilities operations. The lower gross profit in the first quarter of 2025 in civil operations was impacted primarily by negative gross profit of $28.6 million on a fixed price legacy project and weaker gross profit in civil operations in western Canada. The fixed price legacy projects are discussed in Section 5 “Recent Developments” and Section 10.2 “Contingencies” in the Company’s March 31, 2025 MD&A, and Section 13 “Risk Factors” in the 2024 Annual MD&A. In urban transportation solutions, the decrease in gross profit in the period results from lower gross profit margin from LRT projects as these projects advance towards substantial completion. In the Concessions segment, gross profit decreased by $0.5 million primarily from lower management and development fees from LRT projects.
Marketing, general and administrative expense (“MG&A”) increased in the first quarter of 2025 by $4.8 million compared to the same period in 2024, primarily from higher costs related to business acquisitions of $2.7 million, as well as higher personnel costs associated with the expansion of U.S. operations. However, MG&A as a percentage of revenue decreased from 6.2% in the first quarter of 2024 to 5.4% in the first quarter of 2025 which reflects the effect of higher revenue period-over-period.
Reported backlog at March 31, 2025 of $9,696 million compared to backlog of $6,273 million at March 31, 2024. The March 31, 2025 balance represents the highest reported backlog in the history of Aecon. New contract awards of $4,096 million were booked in the first quarter of 2025 compared to $963 million in the same period in 2024.
REPORTING SEGMENTS
Aecon reports its financial performance on the basis of two segments: Construction and Concessions, which are described in the Company’s March 31, 2025 MD&A.
CONSTRUCTION SEGMENT
Financial Highlights
| Three months ended | |||||||||
| $ millions | March 31 | ||||||||
| 2025 | 2024 | ||||||||
| Revenue | $ | 1,057.4 | $ | 843.8 | |||||
| Gross profit | $ | 43.0 | $ | 63.6 | |||||
| Adjusted EBITDA(1) | $ | (1.1 | ) | $ | 27.8 | ||||
| Operating profit (loss) | $ | (29.9 | ) | $ | 7.4 | ||||
| Gross profit margin(3) | 4.1 | % | 7.5 | % | |||||
| Adjusted EBITDA margin(2) | (0.1 | )% | 3.3 | % | |||||
| Operating margin(3) | (2.8 | )% | 0.9 | % | |||||
| Backlog (at end of period) | $ | 9,677 | $ | 6,169 | |||||
(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.
(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” section of this press release for more information on each supplementary financial measure.
Revenue in the Construction segment for the three months ended March 31, 2025 of $1,057 million was $214 million, or 25%, higher compared to the same period in 2024. Construction segment revenue was higher in nuclear operations ($125 million) driven by an increased volume of refurbishment work at nuclear generating stations in Ontario and the U.S., in industrial operations ($65 million) primarily from a higher volume of field construction work at industrial facilities in western Canada, in utilities operations ($15 million) from an increased volume of electrical transmission work in the U.S. which benefited from the acquisition of Xtreme in the second half of 2024 and from an increase in battery energy storage system work, and in civil operations ($11 million) primarily from a higher volume of roadbuilding and foundations construction work. Partially offsetting these increases was lower revenue in urban transportation solutions ($2 million) largely from a lower volume of LRT work in Ontario and Québec as three projects near completion.
Operating loss in the Construction segment of $29.9 million in the first three months of 2025 was unfavourable by $37.3 million compared to an operating profit of $7.4 million in the first three months of 2024. The lower operating profit was largely driven by lower gross profit margin in civil operations which resulted from negative gross profit in the first quarter of 2025 of $28.6 million on a fixed price legacy project and weaker gross profit in civil operations in western Canada. The fixed price legacy projects are discussed in Section 5 “Recent Developments” and Section 10.2 “Contingencies” in the March 31, 2025 MD&A, and Section 13 “Risk Factors” in the 2024 Annual MD&A. Operating profit was also lower in urban transportation solutions due to a lower gross profit margin on the remaining LRT work being performed as these projects advance towards substantial completion, and lower in utilities where an increase in gross profit was more than offset by $7.8 million of higher amortization of acquisition-related intangible assets and higher costs related to business acquisitions included in MG&A, both related to the Xtreme and Ainsworth Power Construction transactions. These decreases offset higher operating profit in nuclear operations from higher volume and gross profit margin, and higher operating profit in industrial due to the impact of higher volume in the period.
Construction backlog at March 31, 2025 was $9,677 million compared to $6,169 million at the same time in 2024. Backlog increased period-over-period in urban transportation solutions ($3,192 million) and nuclear ($968 million), while backlog decreased in civil ($331 million), industrial ($317 million), and utilities operations ($4 million). New contract awards of $4,093 million in the first quarter of 2025 were $3,133 million higher than the same period in 2024. During the first three months of 2025, an Aecon-led consortium reached commercial close on a progressive design-build project for the Scarborough Subway Extension. As well, a joint operation in which Aecon is a participant was awarded a contract for the definition phase of refurbishment work on four units at the Pickering Nuclear Generating Station in Ontario.
CONCESSIONS SEGMENT
Financial Highlights
| Three months ended | |||||||||
| $ millions | March 31 | ||||||||
| 2025 | 2024 | ||||||||
| Revenue | $ | 1.6 | $ | 3.0 | |||||
| Gross loss | $ | (1.2 | ) | $ | (0.7 | ) | |||
| Income from projects accounted for using the equity method | $ | 0.2 | $ | 2.2 | |||||
| Adjusted EBITDA(1) | $ | 12.8 | $ | 17.6 | |||||
| Operating profit (loss) | $ | (1.7 | ) | $ | 1.1 | ||||
| Backlog (at end of period) | $ | 19 | $ | 104 | |||||
(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 currently holds a 50.1% interest in Skyport, the concessionaire responsible for the Bermuda airport’s operations, maintenance, and commercial functions, and the entity that will manage and coordinate 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 accounted for using the equity method. Aecon’s concession participation in the Eglinton Crosstown LRT, Finch West LRT, Gordie Howe International Bridge, Waterloo LRT, and the GO Expansion On-Corridor Works projects are joint ventures that are also accounted for using the equity method.
For the three months ended March 31, 2025, revenue in the Concessions segment of $2 million was $1 million lower than the same period in 2024 primarily due to lower management and development fees related to LRT projects.
Operating loss in the Concessions segment was $1.7 million for the three months ended March 31, 2025 compared to an operating profit of $1.1 million in the first three months of 2024 for a decrease in operating profit of $2.8 million. This decrease was primarily due to lower management and development fees on a development phase project and LRT projects all nearing completion, partially offset by improved operating results at Skyport.
OUTLOOK
With record reported backlog of $9.7 billion at the end of the first quarter of 2025, recurring revenue programs continuing to see solid demand, a strong bid pipeline, and the impact of strategic acquisitions completed in the second half of 2024, revenue in 2025 is expected to be stronger than 2024. Revenue growth is expected in most of the Construction sectors.
In the Construction segment, demand for Aecon’s services across Canada, as well as increasingly in select U.S. and international markets, continues to be strong. Development phase work is ongoing in consortiums in which Aecon is a participant to deliver several significant long-term progressive design-build projects of various sizes. In the first quarter of 2025, an Aecon-led consortium completed the collaborative development phase and reached commercial close on the Scarborough Subway Extension progressive design-build transit project. The implementation phase of the project will now commence under a target price contract. As well, other projects currently being delivered using progressive design-build or alliance models and projects are also expected to move into construction in 2025 and 2026. In addition, an Aecon joint operation was recently awarded a collaborative contract by Ontario Power Generation which includes the definition phase work for the retube, feeder and boiler replacement of Units 5, 6, 7 and 8 at the Pickering Nuclear Generating Station in Ontario.
In the Concessions segment, there are several opportunities to add to the existing portfolio of Canadian and international concessions in the next 12 to 24 months, including projects with private sector clients that support a collective focus on sustainability, as well as private sector development expertise and investment to support aging infrastructure, mobility, connectivity, and population growth. An Aecon-led consortium was selected by the U.S. Virgin Islands Port Authority to redevelop the Cyril E. King Airport in St. Thomas and the Henry E. Rohlsen Airport in St. Croix under a collaborative Design, Build, Finance, Operate, and Maintain Public-Private Partnership model, which is expected to reach financial close in 2025.
Operating profitability in recent years was negatively impacted by the four fixed price legacy projects. The three remaining legacy projects are expected to reach substantial completion by the end of the third quarter of 2025 and this is anticipated to lead to improved profitability and margin predictability. Until the three remaining projects are complete and the related claims have been resolved, there is a risk that profitability could also be negatively impacted by these projects in future periods – see Section 5 “Recent Developments” and Section 10.2 “Contingencies” in the March 31, 2025 MD&A and Section 13 “Risk Factors” in the 2024 Annual MD&A regarding the risk on certain large fixed price legacy projects entered into in 2018 or earlier by joint operations in which Aecon is a participant. As such, the completion and satisfactory resolution of claims on the three remaining legacy projects with respective clients remains a critical focus for the Company and its partners. Management will also be monitoring the impact of announced or threatened tariffs or non-tariff measures on the Company’s operations. The introduction of these measures could cause increased purchased material costs and/or reduced availability.
Aecon plans to maintain a disciplined capital allocation approach focused on long-term shareholder value through acquisitions and divestitures, organic growth, dividends, capital investments, and common share buybacks on an opportunistic basis. Aecon is also focused on making strategic investments in its operations to support access and entry into new markets and increase operational effectiveness. Capital expenditures in 2025 are expected to be moderately higher than in 2024.
CONSOLIDATED RESULTS
The consolidated results for the three months ended March 31, 2025 and 2024 are available at the end of this news release.
CONSOLIDATED BALANCE SHEET
| March 31 | December 31 | |||
| $ thousands | 2025 | 2024 | ||
| Cash and cash equivalents | $ | 385,601 | $ | 438,025 |
| Other current assets | 1,987,183 | 1,790,589 | ||
| Property, plant and equipment | 372,125 | 360,022 | ||
| Other long-term assets | 636,397 | 637,588 | ||
| Total Assets | $ | 3,381,306 | $ | 3,226,224 |
| Current portion of long-term debt – recourse | $ | 41,321 | $ | 40,765 |
| Preferred Shares of Aecon Utilities | 159,310 | 160,300 | ||
| Other current liabilities | 1,785,647 | 1,742,363 | ||
| Long-term debt – recourse | 109,339 | 110,804 | ||
| Other long-term liabilities | 364,550 | 209,556 | ||
| Total Equity | 921,139 | 962,436 | ||
| Total Liabilities and Equity | $ | 3,381,306 | $ | 3,226,224 |
CONFERENCE CALL
A conference call and live webcast has been scheduled for 9 a.m. (Eastern Time) on Thursday, April 24, 2025. A live webcast of the conference call can be accessed using this link and will be available at www.aecon.com/InvestorCalendar. Participants can also dial-in to the conference call and pre-register using this link. After registering, an email will be sent, including dial-in details and a unique access code required to join the live call. Please ensure you have registered at least 15 minutes prior to the conference call time.
An accompanying presentation of the first quarter 2025 financial results will also be available after market close on April 23, 2025 at www.aecon.com/investing. For those unable to attend, a replay will be available within one hour following the live webcast and conference call at the same webcast link above.
AECON 2025 ANNUAL MEETING OF SHAREHOLDERS
Aecon’s Annual Meeting of Shareholders will be held on Tuesday, June 3, 2025. Additional details will be set out in the Notice of Annual Meeting of Shareholders and Management Information Circular which will be filed on SEDAR+ prior to the meeting.
ABOUT AECON
Aecon Group Inc. (TSX: ARE) is a North American construction and infrastructure development company with global experience. Aecon 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, management, and operations and maintenance services through its Concessions segment. Join our online community on X, LinkedIn, Facebook, and Instagram @AeconGroupInc.
For further information:
Adam Borgatti
SVP, Corporate Development and Investor Relations
416-297-2600
[email protected]
Nicole Court
Vice President, Corporate Affairs
416-297-2600
[email protected]
NON-GAAP AND SUPPLEMENTARY FINANCIAL MEASURES
The 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 IFRS Accounting Standards). 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.
Throughout this press release, the following terms are used, which 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 financial statements of the Company; and (d) is not a ratio.
Non-GAAP financial measures and ratios 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, costs related to business acquisitions including: costs related to advisory, legal and other transaction fees; changes in the fair value of contingent consideration; and contingent consideration classified as compensation per IFRS; costs associated with the remediation of properties sold; 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). The most directly comparable measure calculated in accordance with IFRS is operating profit.
- “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).
- “Adjusted Profit (Loss) Attributable To Shareholders” represents profit (loss) attributable to shareholders adjusted where applicable to exclude unrealized gains or losses on derivative financial instruments, costs related to business acquisitions including: amortization of acquisition-related intangible assets; costs related to advisory, legal and other transaction fees; changes in the fair value of contingent consideration; and contingent consideration classified as compensation per IFRS; costs associated with the remediation of properties sold; and where applicable the income tax effect of these adjustments (refer to the “Reconciliations and Calculations” section of this press release for a quantitative reconciliation to the most comparable financial measure). The most comparable IFRS measures for Adjusted Profit (Loss) Attributable to Shareholders is Profit (Loss) Attributable To Shareholders.
- “Adjusted Earnings Per Share – Basic” and “Adjusted Earnings Per Share – Diluted” are calculated by dividing Adjusted Profit (Loss) Attributable To Shareholders (defined above) by the basic and diluted weighted average number of shares outstanding, respectively. The most comparable IFRS measure for Adjusted Earnings Per Share is earnings per share (refer to the “Reconciliations and Calculations” section of this press release for a quantitative reconciliation to the most comparable financial measure).
Management uses the above non-GAAP financial measures to analyze and evaluate operating performance. Aecon also believes the above financial measures 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. These non-GAAP financial measures exclude items which management believes will allow investors a consistent way to analyze Aecon’s financial performance, allow for better analysis of core operating income and business trends, and improve comparability of companies within the industry.
Primary Financial Statements
Primary financial statement means 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 in the Company’s consolidated statements of income and are not meant to be a substitute for other subtotals or totals presented in accordance with GAAP, but rather should be evaluated in conjunction with such GAAP measures.
- “Backlog” (Remaining Performance Obligations) 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.
Remaining Performance Obligations, i.e. Backlog, is presented in the notes to the Company’s annual consolidated financial statements and is not meant to be a substitute for other amounts presented in accordance with GAAP, but rather should be evaluated in conjunction with such GAAP 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 and is not disclosed in the financial statements of the Company.
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.
Management uses the above non-GAAP ratio to analyze and evaluate operating performance. The most directly comparable measures calculated in accordance with GAAP are gross profit and operating profit that can be used to calculate gross profit margin and operating margin.
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 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 ended March 31, 2025 and 2024:
| $ millions | ||||||||||||||||||||||||||
| Three months ended March 31, 2025 | Three months ended March 31, 2024 | |||||||||||||||||||||||||
| Construction | Concessions | Other costs and eliminations | Consolidated | Construction | Concessions | Other costs and eliminations | Consolidated | |||||||||||||||||||
| Operating profit (loss) | $ | (29.9) | $ | (1.7) | $ | (9.1) | $ | (40.7) | $ | 7.4 | $ | 1.1 | $ | (12.7) | $ | (4.2) | ||||||||||
| Depreciation and amortization | 25.0 | 0.1 | 0.9 | 26.0 | 18.6 | 0.1 | 0.2 | 18.8 | ||||||||||||||||||
| (Gain) on sale of assets | (1.1) | – | – | (1.1) | (1.1) | – | – | (1.1) | ||||||||||||||||||
| Costs related to business acquisitions(2) | 2.7 | – | – | 2.7 | – | – | – | – | ||||||||||||||||||
| (Income) loss from projects accounted for using the equity method | 0.5 | (0.2) | – | 0.4 | (0.1) | (2.2) | – | (2.3) | ||||||||||||||||||
| Equity Project EBITDA(1) | 1.8 | 14.6 | – | 16.4 | 2.9 | 18.7 | – | 21.6 | ||||||||||||||||||
| Adjusted EBITDA(1) | $ | (1.0) | $ | 12.8 | $ | (8.2) | $ | 3.6 | $ | 27.8 | $ | 17.6 | $ | (12.5) | $ | 32.9 | ||||||||||
(1) This is a non-GAAP financial measure. Refer to the “Non-GAAP and Supplementary Financial Measures” in this press release for more information on each non-GAAP financial measure
(2) Costs related to business acquisitions includes costs related to advisory, legal, and other transaction fees; changes in the fair value of contingent consideration; and contingent consideration classified as compensation per IFRS
Set out below is the calculation of Equity Project EBITDA by segment for the three months ended March 31, 2025 and 2024:
| $ millions | ||||||||||||||||||||||||||
| Three months ended March 31, 2025 | Three months ended March 31, 2024 | |||||||||||||||||||||||||
| 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 | $ | 1.8 | $ | 10.5 | $ | – | $ | 12.3 | $ | 2.9 | $ | 14.9 | $ | – | $ | 17.8 | ||||||||||
| Depreciation and amortization | – | 4.1 | – | 4.1 | – | 3.8 | – | 3.8 | ||||||||||||||||||
| Equity Project EBITDA(2) | $ | 1.8 | $ | 14.6 | $ | – | $ | 16.4 | $ | 2.9 | $ | 18.7 | $ | – | $ | 21.6 | ||||||||||
(1) Refer to Note 9 “Projects Accounted for Using the Equity Method” in the March 31, 2025 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.
Set out below is the calculation of Adjusted Profit (Loss) Attributable to Shareholders and Adjusted Earnings (Loss) per Share for the most recent eight quarters:
| $ millions | ||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||
| Quarter 1 | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | Quarter 3 | Quarter 2 | |||||||||||||||||||
| Profit (loss) attributable to shareholders | $ | (37.9) | $ | 14.0 | $ | 56.5 | $ | (123.9) | $ | (6.1) | $ | 9.7 | $ | 133.4 | $ | 28.2 | ||||||||||
| Unrealized (gain) on derivative financial instruments | (2.4) | (4.3) | (7.3) | (3.7) | (4.3) | (2.9) | – | – | ||||||||||||||||||
| Amortization of acquisition related intangible assets | 5.1 | 3.1 | 3.0 | 0.3 | 0.3 | 0.4 | 0.4 | 0.4 | ||||||||||||||||||
| Costs related to business acquisitions(2) | 2.7 | 4.3 | 5.6 | – | – | – | – | – | ||||||||||||||||||
| Income tax effect of the above items | (1.4) | (0.8) | (0.4) | 0.9 | 1.0 | 0.7 | (0.1) | (0.1) | ||||||||||||||||||
| Adjusted profit (loss) attributable to shareholders (1) | $ | (34.0) | $ | 16.3 | $ | 57.5 | $ | (126.4) | $ | (9.0) | $ | 7.8 | $ | 133.7 | $ | 28.5 | ||||||||||
| Adjusted earnings (loss) per share – basic(1) | $ | (0.54) | $ | 0.26 | $ | 0.92 | $ | (2.03) | $ | (0.14) | $ | 0.13 | $ | 2.17 | $ | 0.46 | ||||||||||
| Adjusted earnings (loss) per share – diluted(1) | (0.54) | 0.25 | 0.86 | (2.03) | (0.14) | 0.12 | 1.63 | 0.38 | ||||||||||||||||||
(1) This is a non-GAAP financial measure. Refer to Section 4 “Non-GAAP and Supplementary Financial Measures” in this press release for more information on each non-GAAP financial measure.
(2) Costs related to business acquisitions includes costs related to advisory, legal and other transaction fees; changes in the fair value of contingent consideration; and contingent consideration classified as compensation per IFRS.
STATEMENT ON FORWARD-LOOKING INFORMATION
The information in this press release includes certain forward-looking statements which may constitute forward-looking information under applicable securities laws. These forward-looking statements are based on currently available competitive, financial, and economic data and operating plans but are subject to known and unknown risks, assumptions 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: expectations regarding the financial risks and impact of the fixed price legacy projects and the expected timelines of such projects; backlog and estimated duration; the impact of certain contingencies on Aecon (see: Section 10.2 “Contingencies” in the Company’s 2024 Management’s Discussion and Analysis for the fiscal year ended December 31, 2024 (the “2024 MD&A”)); the uncertainties related to the unpredictability of global economic conditions; its belief regarding the sufficiency of its current liquidity position including sufficiency of its cash position, unused credit capacity, and cash generated from its operations; its strategy of seeking to differentiate its service offering and execution capability and the expected results therefrom; its efforts to maintain a conservative capital position; expectations regarding revenue and future revenue growth and the impact therefrom; expectations regarding profitability and margin predictability; expectations regarding capital expenditures; expectations regarding the pipeline of opportunities available to Aecon; the use of collaborative models and expected results therefrom; infrastructure commitments; statements regarding the various phases of projects for Aecon and expectations regarding project timelines; its strategic focus on projects linked to decarbonization, energy transition and sustainability, and the opportunities arising therefrom; communities sharing in the benefits and opportunities associated with Aecon’s work, including commitments to publish information with respect to reconciliation and targets including Indigenous suppliers; expectations regarding access to new markets through strategic investments; expectations regarding opportunities to add to the existing portfolio of Canadian and international concessions in the next 12 to 24 months; expectations regarding growth, and the acceleration thereof, of Aecon in Canada and the U.S.; and the effective transition and collaboration with United Engineers & Constructors Inc. (“United”) and United management. Forward-looking statements may in some cases be identified by words such as “will,” “plans,” “schedule,” “forecast,” “outlook,” “completing,” “mitigating,” “potential,” “possible,” “maintain,” “seek,” “cost savings,” “synergies,” “strategy,” “goal,” “indicative,” “may,” “could,” “might,” “can,” “believes,” “expects,” “anticipates,” “aims,” “assumes,” “upon,” “commences,” “estimates,” “projects,” “intends,” “prospects,” “targets,” “occur,” “continue,” “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 risk of not being able to drive a higher margin mix of business by participating in more complex projects, achieving operational efficiencies and synergies, and improving margins; the risk of not being able to meet contractual schedules and other performance requirements on large, fixed priced contracts; the risks associated with a third party’s failure to perform; the risk of not being able to meet its labour needs at reasonable costs; possibility of gaps in insurance coverage; the risk of not being able to address any supply chain issues which may arise and pass on costs of supply increases to customers; the risks associated with international operations and foreign jurisdiction factors; the risk of not being able, through its joint ventures or joint operations, to enter into implementation phases of certain projects following the successful completion of the relevant development phase; the risk of not being able to execute its strategy of building strong partnerships and alliances; the risk of not being able to execute its risk management strategy; the risk of not being able to grow backlog across the organization by winning major projects; the risk of not being able to maintain a number of open, recurring, and repeat contracts; the risk of not being able to identify and capitalize on strategic operational investments; the risk of not being able to accurately assess the risks and opportunities related to its industry’s transition to a lower-carbon economy; the risk of not being able to oversee, and where appropriate, respond to known and unknown environmental and climate change-related risks, including the ability to recognize and adequately respond to climate change concerns or public, governmental, and other stakeholders’ expectations on climate matters; the risk of not being able to meet its commitment to meeting its greenhouse gas emissions reduction, Board composition or Indigenous supplier targets; the risks of nuclear liability; the risks of cyber interruption or failure of information systems; the risks associated with the strategy of differentiating its service offerings in key end markets; the risks associated with undertaking initiatives to train employees; the risks associated with the seasonal nature of its business; the risks associated with being able to participate in large projects; the risks associated with legal proceedings to which it is a party; the ability to successfully respond to shareholder activism; the risk the increase in energy demand does not continue; risks associated with future pandemics, epidemics and other health crises and Aecon’s ability to respond to and implement measures to mitigate the impact of such pandemics or epidemics; the risk that the strategic partnership with Oaktree Capital Management, L.P.’s (“Oaktree”) will not realize the expected results and may negatively impact the existing business of Aecon Utilities Group Inc. (“Aecon Utilities”); the risk that Aecon Utilities will not realize the anticipated balance sheet flexibility with the completion of the Oaktree investment; the risk that Aecon Utilities will not realize opportunities to expand its geographic reach and range of services in the U.S; the risk of costs or difficulties related to the integration of Aecon and United, and of Aecon Utilities and Xtreme Powerline Construction (“Xtreme”), being greater than expected; the risk of the anticipated benefits and synergies from the United and Xtreme transactions not being fully realized or taking longer than expected to realize; the risk of being unable to retain key personnel, including management of United and Xtreme; the risk of being unable to maintain relationships with customers, suppliers or other business partners of United and Xtreme; and various other risk factors described in Aecon’s filings with the securities regulatory authorities, which are available under Aecon’s profile on SEDAR+ (www.sedarplus.ca), including the risk factors described in Section 13 – “Risk Factors” in the 2024 MD&A and in Aecon’s Management’s Discussion and Analysis for the fiscal quarter ended March 31, 2025, and in other filings made by Aecon with the securities regulatory authorities in Canada.
Forward-looking statements are presented for the purpose of helping investors and others in understanding certain key elements of Aecon’s current objectives, strategic priorities, expectations and plans, and to gather a better understanding of Aecon’s business and operating environment. These forward-looking statements are based on a variety of factors and assumptions including, but not limited to that: none of the risks identified above materialize, there are no unforeseen changes to economic and market conditions and no significant events occur outside the ordinary course of business and assumptions regarding the outcome of the outstanding claims in respect of the fixed price legacy projects being performed by joint ventures in which Aecon is a participant. These assumptions are based on information currently available to Aecon, including information obtained from third-party sources. While the Company believes that such third-party sources are reliable sources of information, the Company has not independently verified the information. The Company has not ascertained the validity or accuracy of the underlying economic assumptions contained in such information from third-party sources and hereby disclaims any responsibility or liability whatsoever in respect of any information obtained from third-party sources.
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 | |||||||
| FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024 | |||||||
| (in thousands of Canadian dollars, except per share amounts) | |||||||
| March 31 | March 31 | ||||||
| 2025 | 2024 | ||||||
| Revenue | $ | 1,061,650 | $ | 846,592 | |||
| Direct costs and expenses | (1,019,860 | ) | (783,806 | ) | |||
| Gross profit | 41,790 | 62,786 | |||||
| Marketing, general and administrative expense | (56,917 | ) | (52,075 | ) | |||
| Depreciation and amortization | (25,956 | ) | (18,843 | ) | |||
| Income (loss) from projects accounted for using the equity method | (354 | ) | 2,293 | ||||
| Other income | 751 | 1,658 | |||||
| Operating profit (loss) | (40,686 | ) | (4,181 | ) | |||
| Finance income | 1,576 | 3,159 | |||||
| Finance cost | (10,048 | ) | (5,672 | ) | |||
| Loss before income taxes | (49,158 | ) | (6,694 | ) | |||
| Income tax recovery | 11,080 | 577 | |||||
| Loss for the period | $ | (38,078 | ) | $ | (6,117 | ) | |
| Loss attributable to: | |||||||
| Aecon shareholders | (37,931 | ) | (6,117 | ) | |||
| Non-controlling interests | (147 | ) | – | ||||
| $ | (38,078 | ) | $ | (6,117 | ) | ||
| Basic loss per share | $ | (0.60 | ) | $ | (0.10 | ) | |
| Diluted loss per share | $ | (0.60 | ) | $ | (0.10 | ) | |
