Atkinsrealis ((TSE:ATRL)) has held its Q4 earnings call. Read on for the main highlights of the call.
The recent earnings call for AtkinsRéalis painted a picture of robust growth and strategic alignment, despite some challenges. The company showcased impressive revenue growth and backlog, particularly in its nuclear and services segments. Strategic decisions, such as the sale of Highway 407 and the acquisition of David Evans, underscore the company’s focus on strengthening its core areas. However, challenges with LSTK projects and regional revenue declines slightly tempered the overall positive sentiment.
Record High Revenue and Backlog
AtkinsRéalis Services achieved a record high revenue of $9.3 billion in 2024, marking an over 15% organic growth. The backlog also saw significant growth, totaling more than $17 billion by year-end, which is a 25% increase from the previous year.
Nuclear Segment Growth
The nuclear segment experienced remarkable growth, with revenue increasing by 64% to $464 million in the quarter. The backlog for this segment rose to $3.2 billion, reflecting a 70% increase from the previous year-end.
Successful Strategic Transactions
The company made strategic moves, including the sale of its interest in Highway 407, expected to generate approximately $2.8 billion. This aligns with AtkinsRéalis’ focus on engineering services and the nuclear business.
Strong Cash Flow Generation
AtkinsRéalis demonstrated its cash-generating capability by producing over $500 million in net cash from operating activities in 2024.
Expansion and Acquisitions
The acquisition of David Evans Enterprises is set to bolster the company’s presence on the U.S. West Coast, aligning with its strategy to acquire firms with strong local customer ties.
Challenges with LSTK Projects
The company faced challenges with LSTK projects, reporting a negative adjusted EBIT of $84 million due to increased commissioning costs on the Trillium Line project and future delay provisions on the Eglinton project.
Decline in Engineering Services Regions Revenue
Revenue in the Engineering Services regions declined by 3% to $1.7 billion, attributed to strong growth in the fourth quarter of 2023 and the completion of major projects.
Flat Organic Revenue Growth in Canada
Organic revenue growth in Canada was flat for the year, with a significant contraction of 11% in the fourth quarter due to the early completion of a project in 2024.
Temporary Decline in U.K. Revenue
The U.K. experienced flat organic revenue growth in the fourth quarter, impacted by temporary government project pipeline uncertainties leading to award deferrals.
Forward-Looking Guidance
Looking ahead to 2025, AtkinsRéalis provided optimistic guidance, anticipating organic revenue growth of 7% to 9% in engineering services, with an adjusted EBITDA margin of 16% to 17%. The nuclear segment is expected to continue its growth trajectory, with projected revenue between $1.6 billion and $1.7 billion and an adjusted EBIT margin of 12% to 14%. Strategic initiatives, including the sale of Highway 407 and the acquisition of David Evans Enterprises, are expected to enhance the company’s operational footprint and financial performance.
In conclusion, the earnings call for AtkinsRéalis highlighted a strong performance with significant growth in key segments and strategic moves to bolster its core business areas. While challenges in certain projects and regions were noted, the overall sentiment remained positive, with forward-looking guidance suggesting continued growth and expansion in 2025.