TORONTO, May 7, 2013 /CNW/ - Aecon Group Inc. (TSX: ARE)
today reported results for the first quarter of 2013.
As previously announced, Aecon is reporting its 2013 financial
performance on the basis of four segments: Infrastructure, Energy,
Mining, and Concessions. Previously, the Company reported its
results within three segments: Infrastructure, Industrial and
Concessions. (The 2012 results have been restated to conform with
the new reporting segments for 2013).
HIGHLIGHTS
- First quarter revenue of $567
million rose by $81 million,
or 17 per cent, driven by increases in the utilities sector in the
Energy segment and strong growth in volume in the Mining
segment.
- Operating loss for the period increased by $13.8 million from $17.3
million in the prior year to $31.1
million for the first quarter of 2013; a profit increase in
the Mining segment was more than offset by higher operating losses
in the Infrastructure and Energy segments due to a one-time project
provision. Operating losses are typical of first quarter
results due to the seasonal nature of the Canadian construction
business; excluding the provision, operating profit improved by
$5.6 million over the same quarter of
2012, and significant progress was made year over year from both a
revenue and margin perspective.
- Backlog of $2.1 billion at
March 31, 2013 versus $2.4 billion at March 31,
2012. Aecon announced today $375 million in various awards, to be booked for
the second quarter, including:
-
- Approximately $215 million in
Energy related work in Western
Canada, including a significant $250
million award to a joint venture between Aecon and its
partner ($125 million to Aecon's
account) to engineer and construct an industrial facility, that
includes pipe fabrication and module assembly work; and
$90 million of work for the
construction of a mill upgrade; and
- Approximately $160 million in
Transportation-related awards, including $83
million of which is related to building the extension of the
407 Express Toll Route (ETR) to connect with the new Highway 407
East. Under contract with 407 ETR, Aecon will be working to
extend the 407 ETR by 3 kilometres, building 11 major bridge
structures, as well as building a new interchange at Brock
Road.
- Increased dividend for 2013 took effect with the first payment
of $0.08 cents per share (increased
from $0.07 cents per quarter) paid on
April 1, 2013 to shareholders of
record on March 22, 2013.
"Our balanced and diversified portfolio will hold us in good
stead through the course of 2013 and beyond," said John M. Beck, Chairman and Chief Executive
Officer. "Based on the quality of work in our current
backlog, recent awards, ongoing growth in our recurring revenues,
and substantial projects that we are currently bidding on in our
core segments, we maintain our positive outlook and target of 9 per
cent EBITDA margin in 2015."
CONSOLIDATED FINANCIAL HIGHLIGHTS |
|
|
|
|
|
|
|
$ millions (except per share
amounts) (1)(2) |
|
|
Three
months ended
March 31 |
|
|
|
2013 |
|
|
2012 |
|
|
|
|
|
|
|
Revenue |
|
$ |
567.4 |
|
$ |
486.4 |
Gross profit |
|
|
22.5 |
|
|
30.6 |
Marketing, general and administrative
expenses |
|
|
(44.8) |
|
|
(39.3) |
Income from projects accounted for
using the equity method |
|
|
8.4 |
|
|
6.4 |
Foreign exchange gains |
|
|
0.1 |
|
|
- |
Gain on sale of assets and
investments |
|
|
0.2 |
|
|
0.6 |
Depreciation and amortization |
|
|
(17.5) |
|
|
(15.6) |
Operating
loss(3) |
|
|
(31.1) |
|
|
(17.3) |
Financing costs, net |
|
|
(8.7) |
|
|
(8.1) |
Fair value loss on convertible
debentures |
|
|
(2.2) |
|
|
(2.8) |
Loss before income taxes |
|
|
(42.0) |
|
|
(28.2) |
Income tax recovery |
|
|
12.1 |
|
|
8.6 |
Loss |
|
$ |
(29.9) |
|
$ |
(19.6) |
|
|
|
|
|
|
|
Adjusted
loss(4) |
|
$ |
(28.3) |
|
$ |
(17.6) |
|
|
|
|
|
|
|
Gross profit margin |
|
|
4.0% |
|
|
6.3% |
MG&A as a percent of
revenue |
|
|
7.9% |
|
|
8.1% |
EBITDA(5) |
|
|
(11.3) |
|
|
(0.4) |
EBITDA Margin |
|
|
(2.0)% |
|
|
(0.1)% |
Operating margin |
|
|
(5.5)% |
|
|
(3.6)% |
Loss per share - basic |
|
$ |
(0.56) |
|
$ |
(0.37) |
Loss per share - diluted |
|
$ |
(0.56) |
|
$ |
(0.37) |
|
|
|
|
|
|
|
Adjusted loss per share -
basic |
|
$ |
(0.53) |
|
$ |
(0.33) |
Adjusted loss per share -
diluted |
|
$ |
(0.53) |
|
$ |
(0.33) |
|
|
|
|
|
|
|
Backlog |
|
$ |
2,073 |
|
$ |
2,379 |
|
|
|
|
|
|
|
(1) This press release presents
certain non-GAAP and additional GAAP (GAAP refers to Canadian
Generally Accepted Accounting Principles) financial measures to
assist readers in understanding the Company's performance.
Non-GAAP financial measures are measures that either exclude or
include amounts that are not excluded or included in the most
directly comparable measures calculated and presented in accordance
with GAAP. Further details on non-GAAP and additional GAAP measures
are included in the Company's Management's Discussion and Analysis
and available through the System for Electronic Document Analysis
and Retrieval at www.sedar.com.
(2) Certain 2012 amounts in this press
release have been restated due to the adoption of IFRS 11,
"Joint Arrangements" and IAS 19 (2011), "Employee
Benefits". See Note 4 "New Accounting Standards" in the
March 31, 2013 Consolidated Financial
Statements for further details.
(3) "Operating profit (loss)"
represents the profit (loss) from operations, before net financing
expense, income taxes and non-controlling interests.
(4) "Adjusted profit (loss)"
represents the profit (loss) adjusted to exclude the after-tax fair
value gain (loss) on the embedded derivative portion of Aecon's
convertible debentures.
(5) "EBITDA" represents operating
profit (loss) adjusted to exclude depreciation and amortization,
the gain (loss) on sales of assets and investments, and net income
(loss) from projects accounted for using the equity method, but
including "JV EBITDA" from projects accounted for using the equity
method. "JV 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.
Revenue and operating profit (loss) by segment
for the three months ended March 31,
2013 and 2012 are set out and discussed in the tables and
sections below:
$ millions |
|
|
|
|
For
the period ended
March 31, 2013 |
|
|
Revenue |
|
|
Operating profit (loss) |
|
|
2013 |
|
|
2012 |
|
|
2013 |
|
|
2012 |
Infrastructure |
$ |
149.7 |
|
$ |
188.2 |
|
$ |
(33.6) |
|
$ |
(20.8) |
Energy |
|
248.0 |
|
|
163.4 |
|
|
(13.4) |
|
|
(3.7) |
Mining |
|
171.5 |
|
|
135.0 |
|
|
18.7 |
|
|
13.0 |
Concessions |
|
0.6 |
|
|
0.6 |
|
|
6.2 |
|
|
2.8 |
Other costs and
eliminations(1) |
|
(2.4) |
|
|
(0.8) |
|
|
(9.0) |
|
|
(8.7) |
Consolidated |
$ |
567.4 |
|
$ |
486.4 |
|
$ |
(31.1) |
|
$ |
(17.3) |
|
|
|
|
|
|
|
|
|
|
|
|
(1) The Other costs and
eliminations category includes corporate and other costs that are
not directly allocable to segments and also includes inter-segment
eliminations.
Aecon reported backlog of $2.073
billion at March 31, 2013
compared to $2.379 billion at the end
of the first quarter of 2012. New contract awards of
$212 million were booked in the first
quarter of 2013 compared to $492
million in the first quarter of 2012, the main difference
being the award of a significant power project in Q1 2012.
Mr. Beck added: "In addition to the growth that Aecon has
experienced in recurring revenue - now representing approximately
25 per cent of our annual revenues - we expect quarter-to-quarter
variability in our backlog such as we've reported today because of
the nature of the larger projects that we are working through, and
importantly those that we are currently bidding on. Given the
active nature of the pipeline of projects we are currently bidding
on, we remain confident in our revenue outlook for 2013 and
beyond."
It is important to note that Aecon does not report as backlog
the significant and increasing number of contracts and arrangements
in hand where the exact amount of work to be performed cannot be
reliably quantified or where a minimum number of units at the
contract specified price per unit is not guaranteed. Therefore, the
effective backlog within each of the Company's segments at any
given time is greater than what is reported.
OPERATING AND FINANCIAL RESULTS
"Our operational performance in the first quarter was pretty
steady across the board," said Teri
McKibbon, Chief Operating Officer. "We remain
committed to the ongoing initiatives to continually improve our
focus on execution and operating margins by investing in our risk
management and project execution capabilities."
Revenue for the first quarter of 2013 increased by 17 per cent
to $567 million compared to
$486 million, and was driven by
increases in the utilities sector in the Energy segment and strong
growth in volume in the Mining segment. Operating losses are
typical of first quarter results due to the seasonal nature of the
Canadian construction business, and for the first quarter of 2013,
operating loss increased by $13.8
million from $17.3 million in
the prior year to $31.1
million. There was one particular project that
adversely impacted the results of the Energy and Mining segments;
excluding this one project, operating profit improved by
$5.6 million over the same quarter of
2012, and significant progress was made year over year from both a
revenue and margin perspective.
REPORTING SEGMENTS
Aecon is reporting its 2013 financial performance on the basis
of four segments: Infrastructure, Energy, Mining, and
Concessions.
INFRASTRUCTURE SEGMENT
The Infrastructure segment includes all aspects of the
construction of both public and private infrastructure, primarily
in Canada, and on a selected
basis, internationally. The Infrastructure segment focuses
primarily on the transportation, heavy civil and social
infrastructure sectors.
|
|
|
|
|
|
Financial Highlights |
|
|
|
|
|
|
|
Three Months Ended |
$ millions |
|
March
31 |
|
|
2013 |
|
|
2012 |
|
|
|
|
|
|
Revenue |
$ |
149.7 |
|
$ |
188.2 |
Gross profit |
$ |
(15.1) |
|
$ |
(5.4) |
EBITDA |
$ |
(29.7) |
|
$ |
(16.5) |
Operating loss |
$ |
(33.6) |
|
$ |
(20.8) |
|
|
|
|
|
|
EBITDA margin |
|
(19.8)% |
|
|
(8.8)% |
Operating margin |
|
(22.5)% |
|
|
(11.0)% |
Backlog |
$ |
1,021 |
|
$ |
1,201 |
|
|
|
|
|
|
The operating loss in the Infrastructure segment of $33.6 million increased by $12.9 million over the same period in the prior
year; this was primarily due to this segment's share ($9.7 million) of a $19.4
million one-time provision on a project. In addition,
there were lower volumes and margins from the Social Infrastructure
sector where the Company has re-focused its operations related to
the buildings business in Quebec
and Ontario, and several projects
related to mechanical operations were completed in 2012 in
Western Canada. These were
partly offset by margin improvements in Heavy Civil operations.
Infrastructure backlog at March 31,
2013 was $1,021 million, which
is $180 million lower than the same
time last year primarily due to significant Heavy Civil project
work off in 2012 including the Quito airport and Autoroute 30 projects. New
contract awards totaled $49 million
in the first quarter 2013 compared to $46
million in the prior year.
ENERGY SEGMENT
The Energy segment encompasses a full suite of
service offerings to the energy sector including industrial
construction and manufacturing activities such as in-plant
construction, site construction and module assembly. The Energy
segment focuses primarily on the following sectors: oil and gas,
power generation, utilities, and energy support services.
|
|
|
|
|
|
Financial Highlights |
|
|
|
|
|
|
|
Three months ended |
$ millions |
|
March
31 |
|
|
2013 |
|
|
2012 |
|
|
|
|
|
|
Revenue |
$ |
248.0 |
|
$ |
163.4 |
Gross profit |
$ |
6.3 |
|
$ |
13.6 |
EBITDA |
$ |
(10.1) |
|
$ |
(0.7) |
Operating loss |
$ |
(13.4) |
|
$ |
(3.7) |
|
|
|
|
|
|
EBITDA margin |
|
(4.1)% |
|
|
(0.4)% |
Operating margin |
|
(5.4)% |
|
|
(2.3)% |
Backlog |
$ |
801 |
|
$ |
560 |
|
|
|
|
|
|
The operating loss in the Energy segment of $13.4 million compared to a loss of $3.7 million in the same period last year
reflecting this segment's share ($9.7
million) of the provision on one project. Higher
profits and margins were achieved from fabrication and module
assembly projects across Canada
but were offset by lower revenue in Central Canada construction and lower margins
in the power sector in Central
Canada.
Energy backlog at March 31, 2013
was $801 million - or $241 million higher - than the $560 million as at the end of the first quarter
of 2012, with most of the increase occurring in Utilities related
to pipeline work in Western
Canada. New contract awards of $51
million in the first quarter of 2013 were $253 million lower than the same period in 2012,
reflecting the year-over-year impact of a large multi-year award
booked in the first quarter of 2012 in the power sector in
Central Canada.
MINING SEGMENT
The Mining segment offers turn-key services
consolidating Aecon's mining capabilities and services across
Canada, including both mine-site
installations and contract mining. This segment offers
construction services that span the scope of a project's life
cycle, from resource extraction, to processing, and to
reclamation.
|
|
|
|
|
|
Financial Highlights |
|
|
|
|
|
|
|
Three months ended |
$ millions |
|
March
31 |
|
|
2013 |
|
|
2012 |
|
|
|
|
|
|
Revenue |
$ |
171.5 |
|
$ |
135.0 |
Gross profit |
$ |
31.4 |
|
$ |
22.6 |
EBITDA |
$ |
27.0 |
|
$ |
19.2 |
Operating profit |
$ |
18.7 |
|
$ |
13.0 |
|
|
|
|
|
|
EBITDA margin |
|
15.7% |
|
|
14.2% |
Operating margin |
|
10.9% |
|
|
9.6% |
Backlog |
$ |
251 |
|
$ |
618 |
|
|
|
|
|
|
The operating profit in the Mining segment of $18.7 million was $5.7
million higher than the same period last year, with the
majority of the period-over-period increase resulting from higher
volume.
Mining backlog at March 31, 2013
of $251 million was $367 million lower than the same time last year
as work progressed on several large projects throughout the past
year. New contract awards of $112
million in the first quarter of 2013 were $20 million lower than in the same period in
2012.
CONCESSIONS SEGMENT
The Concessions segment includes the
development, financing, construction and operation of
infrastructure projects by way of build-operate-transfer,
build-own-operate-transfer and other public-private partnership
contract structures.
|
|
|
|
|
|
Financial Highlights |
|
|
|
|
|
|
|
Three Months Ended |
$ millions |
|
March
31 |
|
|
2013 |
|
|
2012 |
|
|
|
|
|
|
Revenue |
$ |
0.6 |
|
$ |
0.6 |
Gross profit |
$ |
(0.1) |
|
$ |
(0.2) |
Income from projects accounted for
using the equity method |
$ |
7.0 |
|
$ |
4.2 |
EBITDA |
$ |
8.7 |
|
$ |
4.8 |
Operating profit |
$ |
6.2 |
|
$ |
2.8 |
|
|
|
|
|
|
With the adoption of IFRS 11 "Joint
Arrangements" on January 1, 2013,
Aecon's investment in the Quito
airport Concessionaire ("Quiport JV") is now reported using the
equity method of accounting. Previously Quiport JV was
reported using proportionate consolidation. Prior period
amounts for 2012 have been restated to reflect the same basis of
accounting. As a result of the change in accounting, revenue
reported in the Concessions segment for the first quarter of 2013
and 2012 is only $1 million.
Operating profit of $6.2
million for the first quarter of 2013 was $3.4 million higher than the same period last
year, reflecting higher revenue in Quiport JV following the
transition of operations from the old Quito airport to the new Quito airport in February 2013 and year-over-year passenger
growth.
DIVIDEND
As previously announced, the annual dividend is $0.32 per share to be paid in four quarterly
payments of $0.08 cents per share.
The increased dividend for 2013 took effect with the first payment
of $0.08 cents per share (increased
from $0.07 cents per quarter) paid on
April 1, 2013 to shareholders of
record on March 22, 2013.
CONSOLIDATED RESULTS
The consolidated results for the three months ended March 31, 2013 and 2012 are available at the end
of this news release.
BALANCE SHEET HIGHLIGHTS |
|
|
|
|
|
|
March 31 |
|
Dec. 31 |
(in thousands of Canadian dollars)
(unaudited) |
|
2013 |
|
2012 |
|
|
|
|
|
Cash |
$ |
84,541 |
$ |
66,977 |
Other current assets |
|
922,003 |
|
996,836 |
Property, plant and equipment |
|
498,729 |
|
508,553 |
Other long-term assets |
|
308,940 |
|
291,247 |
Total Assets |
$ |
1,814,213 |
$ |
1,863,613 |
|
|
|
|
|
Current liabilities |
$ |
824,404 |
$ |
834,849 |
Long-term debt |
|
135,213 |
|
146,048 |
Convertible debentures |
|
256,856 |
|
253,189 |
Other long-term liabilities |
|
86,266 |
|
86,369 |
|
|
|
|
|
Equity |
|
511,474 |
|
543,158 |
Total Liabilities and Equity |
$ |
1,814,213 |
$ |
1,863,613 |
CONFERENCE CALL
A conference call has been scheduled for Wednesday, May 8, 2013 at 10 a.m. (ET) to discuss Aecon's 2013 first
quarter financial results. Participants should dial 416-981-9035 or
1-800-381-7839 at least 10 minutes prior to the conference time. A
replay will be available after 12
p.m. at 1-800-558-5253 or 416-626-4100 until midnight on
May 15, 2013. The reservation number
is 21655433.
ABOUT AECON
Aecon Group Inc. is a Canadian leader in construction and
infrastructure development providing integrated turnkey services to
private and public sector clients. Aecon is pleased to be
consistently recognized as one of the Best Employers in
Canada.
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. 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:
interest and foreign exchange rates, global equity and capital
markets, business competition and operational and reputational
risks, including Large Project Risk and Contractual Factors.
Readers are referred to the specific risk factors relating to and
affecting Aecon's business and operations as filed by Aecon
pursuant to applicable securities laws. 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. 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. 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 |
|
|
March 31 |
March 31 |
|
|
2013 |
2012 |
|
|
|
|
|
|
Revenue |
$ |
567,439 |
$ |
486,425 |
Direct costs and expenses |
|
(544,934) |
|
(455,846) |
Gross profit |
|
22,505 |
|
30,579 |
|
|
|
|
|
|
Marketing, general and administrative
expenses |
|
(44,814) |
|
(39,347) |
Depreciation and amortization |
|
(17,511) |
|
(15,558) |
Income from projects accounted for
using the equity method |
|
8,422 |
|
6,399 |
Other income |
|
297 |
|
624 |
Operating loss |
|
(31,101) |
|
(17,303) |
|
|
|
|
|
|
Finance income |
|
532 |
|
883 |
Finance costs |
|
(9,277) |
|
(9,021) |
Fair value loss on convertible
debentures |
|
(2,156) |
|
(2,762) |
Loss before income taxes |
|
(42,002) |
|
(28,203) |
Income tax recovery |
|
12,090 |
|
8,614 |
Loss for the period |
$ |
(29,912) |
$ |
(19,589) |
|
|
|
|
|
|
Basic earnings per share |
$ |
(0.56) |
$ |
(0.37) |
Diluted earnings per share |
$ |
(0.56) |
$ |
(0.37) |
|
|
|
|
|
SOURCE Aecon Group Inc.