Aecon Updates Backlog to $2.663 Billion
TORONTO, June 18, 2012 /CNW/ - Aecon Group Inc. (TSX: ARE) today announced that its backlog stood at $2.663 billion as at May 31, 2012, compared with $2.379 billion that was reported at the end of the first quarter (March 31, 2012).
During its Investor Day to be held in Toronto today (and webcast between 1:00-5:00 p.m.), the Company will outline its current strategy and strengths that it expects will generate growing revenues and earnings.
"Aecon stands not only poised to deliver but is generating stronger results," said John M. Beck, Chairman and Chief Executive Officer. "Our $2.663 billion backlog embeds improved margins than previously achieved as a result of our disciplined bidding approach, the strong market sectors in which we have positioned ourselves, and our capabilities to self-perform a comprehensive range of construction services across Canada. Our focus on execution - including cost control, risk management and synergy opportunities within our business units - is expected to lead us on a path of sustainable growth in earnings."
The Company's backlog as at May 31, 2012, is broken down as follows:
Not included in backlog, but important to Aecon's business and prospects due to the significant volumes involved, are the expected revenues from its growing alliances and supplier-of-choice arrangements where the amount and/or value of work to be carried out is not specified. This additional work, or 'soft backlog', is now expected to be approximately $500-$600 million on an annual basis. This represents between 15 and 20 per cent of Aecon's business today and underlines the emergence of the recurring maintenance and construction service business that it is providing among its broad-based clients.
David Smales, Executive Vice President and CFO, said: "We expect steady margin growth over the next few years. This is linked to ongoing growth in backlog contract margin and supported by internal and external factors, including improved operational efficiency, mix of work - larger turnkey projects, growth in mining and less traditional general construction work - and market opportunities such as increased demand for construction services in areas of Aecon's core capabilities and the strong recovery in industrial markets across Canada."
BUSINESS UNIT HIGHLIGHTS OF INVESTOR DAY PRESENTATIONS
- Work is underway on approximately $70 million of new awards in the transportation sector in Ontario.
- The Edmonton Alberta Henday ring road joint venture is currently completing design, permitting, finalizing contracts and locating utilities with construction expected to begin in Q4 2012. Aecon has a 22.5 per cent interest in the integrated joint venture.
- Near to medium term opportunities being pursued for mainline pipeline contracts through Aecon's strategic alliance with RB Somerville.
- Additional fabrication work for the oil sands has recently been awarded with a value of approximately $75 million.
- Started work since the beginning of the year on three new contracts for Cameco Corporation, Laricina Energy Ltd. and Suncor Energy with a combined value of over $100 million including:
- An underground mechanical installation at Cameco's Cigar Lake project in northern Saskatchewan. Cigar Lake is the world's largest undeveloped high-grade uranium deposit.
- A multi-discipline field work contract for Laricina Energy at the Germain SAGD project, 130 kilometres southwest of Fort McMurray, Alberta.
- A multi-trade field contract at Suncor's McKay River facility, north of Fort McMurray, Alberta.
- New Quito International Airport targeted for opening in October 2012.
- Recent transaction by CCR S.A. for 45.5 per cent interest in Quito Airport concession valued at US $140 million. Aecon holds an equivalent stake in the concession.
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.
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: the timing of projects, unanticipated costs and expenses, general market and industry conditions 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, performance, prospects, 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.For further information: