Aecon Group Inc. ((TSE:ARE)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Aecon Group Inc.’s recent earnings call painted a picture of cautious optimism, as the company reported strong revenue growth and a record-setting backlog. While legacy projects continue to pose challenges, the overall sentiment suggests a balanced outlook with potential for improved profitability as these issues are resolved.
Record Backlog
Aecon announced a record backlog of $10.7 billion at the end of the second quarter, surpassing the previous high of $9.7 billion. This milestone reflects the company’s robust project pipeline and positions it well for future growth.
Significant Revenue Growth
The company reported revenue of $1.3 billion for the three months ending June 30, 2025, marking a substantial 52% increase compared to the same period in 2024. This growth underscores Aecon’s strong performance across its industrial, nuclear, and civil operations.
Improvements in Adjusted EBITDA
Aecon’s adjusted EBITDA saw a remarkable turnaround, reaching $41 million compared to a negative $154 million last year. The company also reported an operating profit of $2 million, a significant improvement from the operating loss of $166 million in the previous year.
New Contract Awards
The quarter saw new contract awards totaling $2.4 billion, primarily driven by the Darlington New Nuclear Project in Ontario. This influx of new contracts further strengthens Aecon’s project portfolio.
Legacy Project Challenges
Legacy projects continue to impact Aecon’s financial performance, with adjusted EBITDA and operating profit negatively affected by $237 million in legacy project losses in the second quarter of 2024. However, these losses were reduced to $39 million in the second quarter of 2025, indicating progress in resolving these issues.
Lower Concessions Segment Performance
The Concessions segment reported adjusted EBITDA of $16 million, down from $30 million last year. This decline was primarily due to the absence of last year’s gain on sale related to incremental proceeds from the partial sale of Skyport.
Challenges in Western Civil Projects
Performance issues in Western civil projects have impacted the overall margin pool associated with Aecon’s civil practice, highlighting an area for potential improvement.
Forward-Looking Guidance
Looking ahead, Aecon anticipates continued revenue growth in 2025, driven by its record backlog, strategic acquisitions, and a strong bid pipeline. The company expects its three remaining legacy projects to reach substantial completion by the end of 2025, aiming for improved profitability and margin predictability.
In conclusion, Aecon Group Inc.’s earnings call reflects a company on the path to recovery, with strong revenue growth and a record backlog setting the stage for future success. While challenges remain, particularly with legacy projects and certain segments, the overall sentiment is one of cautious optimism as Aecon works towards resolving these issues and enhancing profitability.