Aecon revenue drops, but backlog rises to record during quarter dominated by COVID-19

The company saw delays or suspensions of work on numerous big-ticket projects across Canada

Aecon Group Inc. swung to a loss of $6.2 million and saw revenues decline to $779 million for the second quarter of 2020 — a three month period that saw widespread economic fallout from the COVID-19 pandemic.

The loss compares to a gain of $20.4 million for the same quarter last year and a decline in revenue of about 10 per cent. At the same time, the contractor reported a record backlog of $7.25 billion, earning more than $1 billion in new work during the first three months of the year.

Jean-Louis Servranckx, the company’s president and CEO, said its results during the tough quarter highlight the resilience and diversity of Aecon’s portfolio.

“Aecon continues to monitor developments and mitigate risks related to the COVID-19 pandemic and the impact on our projects, operations, supply chain, and most importantly our employees,” he said in a release. “Moving forward, we expect the demand for our services to remain strong with federal and provincial governments across Canada identifying investment in infrastructure to be a key source of economic stimulus.”

Among other slowdowns tied to the pandemic, Aecon said it saw lower revenues in its civil work and urban transportation projects across Canada. It pointed to work suspensions on Montreal’s REM light rail project and the Site C dam in B.C., as well as schedule delays to a major nuclear refurbishment project at Ontario’s Darlington facility, as several projects to face challenges. It added an increase in roadbuilding projects in both eastern and western Canada partially offset these issues.

The company anticipates work to ramp back up throughout the second half of the year, but also cautioned procurement delays on “certain projects” the company expected to bid on could delay future revenues.

Aecon also disclosed a previously unannounced acquisition of “certain telecommunications assets” from Winnipeg-based Powerland, a Winnipeg-based IT solutions provider in its quarterly report.

“This niche acquisition further builds on Aecon’s position as a leading provider of end-to-end telecommunications infrastructure services across Canada, with significant growth opportunities and investments underway and forecasted in this sector,” the company said.