Higher margin industrial work boosts Bird Construction’s net income in Q2
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Bird Construction Inc. brought in less revenue in the second quarter of 2020, but higher margin work in the industrial sector helped push its net income higher.
The company said Aug. 11 it recorded net income of $5.6 million, or 13 cents per share, compared to $1 million, or two cents per share in the same quarter last year. Revenues slid to $282.8 million on the quarter, compared to $315.4 million a year earlier.
Bird credited growth in its higher-margin industrial work program for the improved profitability.
“Our company has shown resilience in the second quarter with its seventh sequential quarter where our trailing twelve month adjusted EBITDA has improved,” Teri McKibbon, the company’s president and CEO, said in a release. “The credit has to go to our field staff that safely worked through the height of the pandemic and ensured that our company delivered its projects,”
The Mississauga-based contractor said provincially-required measures to protect against COVID-19 have eased to varying degrees, but the pandemic’s duration and impact on its workforce, supply chain and project sites remains unknown.
“The health and safety of employees is paramount and, as a result of the pandemic, the company has increased health and safety initiatives such as physical distancing and added additional measures to normal safety protocols,” Bird said in a release. “The situation remains extremely fluid; however, the company responded to the challenges presented in the first half of 2020 and is well-positioned to respond to fluctuating scenarios in the near term.”
Bird noted some contract awards expected in the first half of 2020 have been delayed as a result of the pandemic. At the end of June, the company’s backlog stood at $1.65 billion, up from $1.38 billion a year earlier.
“Our near record backlog and pending backlog will provide ample work at good margins to help the company be considerably more profitable in 2020 than recent years despite a projected decline in revenue year-over-year,” McKibbon said.
After the close of the Q2, Bird also announced a major acquisition that will shake up the Canadian construction industry. On July 29, the company agreed to purchase Calgary-based Stuart Olson Inc. The deal, expected to close later this year, will create a contractor with a workforce of approximately 5,000 and a backlog of about $3 billion.