Revenue falls but Aecon Group Q3 profit of $39.5M beats prior-year result

TORONTO – Aecon Group Inc. (TSX:ARE) saw an increase in third-quarter profit even as the construction and infrastructure development company reported softer revenues in the period.

Aecon said net profits in the three months to Sept. 30 were $39.5 million or 49 cents per diluted share, up from $34.4 million or 53 cents in the same 2013 quarter. The improved results included a fair value gain on convertible debentures of $8.7 million, versus a $2.8-million loss in the prior-year period.

Revenue contracted to $840.4 million from $897.3 million, largely because of what the company said was longer than anticipated ramp-up on new projects as a result of externally-driven delays.

“An overall more cautious approach is being adopted by clients to moving projects forward at a normal pace,” the company said in its earnings release, issued Monday after markets closed.

“This trend has continued into the early part of the fourth quarter with ongoing uncertainty being seen in the broader Canadian economy, in large part linked to weakness in the resource sector.”

President and CEO Teri McKibbon said the quarterly results were “consistent with seasonally stronger results posted in the second half of the year for the construction industry in Canada.”

“We anticipate that Aecon will complete 2014 with another year of solid financial performance through a continued focus on execution and margins,” McKibbon added.

Among highlights of the quarter, Aecon said it won new contract awards of $818 million, up from $772 million in the year-earlier period and that its backlog as of Sept. 30 was $2.7 billion, up 28 per cent from $2.1 billion at same point in 2013.