Stuart Olson reports another tough quarter, but expects rebound in second half of 2019

CALGARY—Stuart Olson Inc. reported its second quarter financials Aug. 7, with results slipping nearly across the board.

The Alberta-based contractor generated revenue of $239.5 million over the three month period, versus $249.3 million in the same quarter of 2018. It said its Industrial Group’s completion of two major projects last year was the primary cause of the decline.

Earnings also fell. Stuart Olson said it lost eight cents per share on the quarter, compared with a gain of four cents per share last year.

“For the first half of 2019, we faced pressures related to increased competitive market conditions and a capital spending slowdown by our integrated oil sands customers as a result of the mandatory Alberta oil production curtailment policy, which impacted our net earnings, adjusted EBITDA and contract revenue year-over-year,” David LeMay, the company’s president and CEO, said in a release.

New contracts added to its backlog were one bright spot for the company in the second quarter. As of June 30, the builder’s backlog stood at $1.7 billion, up from $1.6 billion three months before. Among the highlights on the quarter were mining construction projects in Saskatchewan and Ontario, a fire hall project in Ontario and a healthcare facility in Alberta.

The company is also expecting better results over the final six months of the year.

“We expect to deliver year-over-year increases in contract revenue, adjusted EBITDA and net earnings in the second half of 2019, as we anticipate increased activity levels resulting from our geographic and sector diversification strategies,” LeMay said. “Our operating groups also continue to pursue a significant number of project opportunities.”

Breaking down expectations for its business division, Stuart Olson forecast “meaningfully higher” revenue for its Industrial Group, “modestly higher” revenue for its Buildings Group and “slightly higher” revenue for its Commercial Systems Group.