Aecon reports full year results for 2012

TORONTO, March 12, 2013 /CNW/ - Aecon Group Inc. (TSX: ARE) today reported 
results for the fourth quarter and full year 2012 showing margin trends 
continued to be positive while revenue in 2012 was slightly higher than the 
same period a year ago. 
"We are pleased to have made significant improvements in our financial 
performance through the course of 2012 and remain focused on execution and a 
disciplined approach in working toward our target of 9 per cent EBITDA margin 
in 2015. The steady progress that we are making particularly reflects 
improved volume and margins in our mining operations as well as increased 
contributions from our Industrial business," said John M. Beck, Chairman and 
Chief Executive Officer. "We enter 2013 with confidence in our three 
strategic core markets: infrastructure, energy and mining." 
HIGHLIGHTS 


    --  Due to higher margins, gross profit for the year ended December
        31, 2012, increased by $40.9 million to $315.0 million on
        revenues of $2,946.8 million compared to $274.1 million on
        revenues of $2,896.2 million in 2011.
    --  Adjusted EBITDA (excluding gains on sale of assets and
        investments) increased by 17 per cent to $172.4 million for the
        year ($147.2 million in 2011) due primarily to improved margins
        (adjusted EBITDA margin of 5.9 per cent in 2012 versus 5.1 per
        cent in 2011).
    --  Adjusted profit attributable to shareholders (excluding fair
        value gain on convertible debentures) of $74.8 million ($1.18
        per diluted share) for 2012 was recorded compared to $54.5
        million ($0.84 per diluted share) in 2011.
    --  Backlog of $2.43 billion at year end 2012 versus $2.39 billion
        in 2011.
    --  Subsequent to year end, Aecon announced that the new Quito
        International Airport successfully commenced commercial flight
        operations.
    --  Annual dividend is increased to $0.32 per share ($0.08 per
        quarter) from $0.28 per share ($0.07 per quarter).

CONSOLIDATED FINANCIAL HIGHLIGHTS
                                                                       
                          Three months ended              Year ended

$millions (except per
share amounts)( (1))           December 31               December 31
                           2012        2011         2012          2011

Revenue                 $  948.7   $   790.3    $ 2,946.8     $ 2,896.2

Gross profit               110.4       112.7        315.0         274.1

Marketing, general                            
and administrative
expenses                  (38.5)      (41.6)      (157.2)       (138.8)

Income from                                   
construction projects
accounted for using
the equity method            5.8         3.7         14.4          14.1

Foreign exchange                              
gains                        0.3         0.2          0.2           0.3

Gain on sale of                               
assets and
investments                  0.1         1.0          0.9          15.9

Other gains (losses)           -       (2.5)            -         (2.5)

EBITDA((2))                 78.1        73.6        173.3         163.1

Depreciation and                              
amortization              (17.8)      (16.8)       (63.6)        (62.5)

Operating profit((3))       60.3        56.8        109.8         100.5

Financing expense,                            
net                        (5.1)       (9.8)       (27.1)        (31.2)

Fair value gain on                            
convertible
debentures                   3.9       (0.3)          4.3           4.3

Profit before income                          
taxes                       59.1        46.7         86.9          73.6

Income tax expense         (0.6)       (9.8)        (5.9)        (11.4)

Profit attributable                           
to non-controlling
interests                  (2.1)       (0.3)        (3.0)         (4.6)

Profit attributable                           
to shareholders         $   56.4   $    36.7    $    78.0     $    57.6

Adjusted profit                               
attributable to
shareholders((4))       $   53.5   $    36.9    $    74.8     $    54.5

Adjusted EBITDA((5))    $   78.0   $    72.6    $   172.4     $   147.2
                                                                       
                                                                       

Gross profit margin        11.6%       14.3%        10.7%          9.5%

MG&A as a percent of                          
revenue                     4.1%        5.3%         5.3%          4.8%

EBITDA margin               8.2%        9.3%         5.9%          5.6%

Adjusted EBITDA                               
margin                      8.2%        9.2%         5.9%          5.1%

Operating margin            6.4%        7.2%         3.7%          3.5%

Earnings per share -                          
basic                   $   1.07   $    0.69    $    1.47     $    1.07

Earnings per share -                          
diluted                 $   0.72   $    0.49    $    1.18     $    0.84
                                                                       

Adjusted earnings per                         
share- basic((6))       $   1.01   $    0.69    $    1.41     $    1.01

Adjusted earnings per                         
share- diluted((6))     $   0.72   $    0.49    $    1.18     $    0.84
                                                                       

Backlog                                         $   2,428     $   2,390
                                                                       

(1)  This press release presents certain non-GAAP and additional GAAP
     (GAAP refers to Canadian Generally Accepted Accounting
     Principles) financial measures to assist readers in understanding
     the Company's performance.  Non-GAAP financial measures are
     measures that either exclude or include amounts that are not
     excluded or included in the most directly comparable measures
     calculated
     and presented in accordance with GAAP. Further details on non-GAAP
     and additional GAAP measures are included in the Company's
     year end Management's Discussion and Analysis and available
     through the System for Electronic Document Analysis and Retrieval
     at
     www.sedar.com.

(2)  "EBITDA" represents earnings or losses before net financing
     expense, the fair value gain (loss) on convertible debentures,
     income taxes,
     depreciation and amortization, and non-controlling interests.

(3)  "Operating profit (loss)" represents the profit (loss) from
     operations before net financing expense, income taxes and
     non-controlling interests.

(4)  "Adjusted profit (loss) attributable to shareholders" represents
     the profit (loss) attributable to shareholders adjusted to exclude
     the
     after-tax fair value gain (loss) on the embedded derivative
     portion of Aecon's convertible debentures.

(5)  "Adjusted EBITDA" represents EBITDA adjusted to exclude the gain
     (loss) on sales of assets and investments.

(6)  "Adjusted earnings (loss) per share" represents earnings (loss)
     per share calculated using adjusted profit (loss) attributable to
     shareholders.
      

Revenue and operating profit (loss) by segment for the years ended December 
31, 2012 and 2011 are set out and discussed in the tables and sections below:
                     

$ millions( )                            For the year ended
                                               December 31
                             Revenue        Operating profit (loss)
                       2012        2011       2012             2011

Infrastructure( ) $ 1,897.1   $ 1,904.7   $   59.5   $         64.9

Industrial( )       1,014.0       918.3       57.9             30.2

Concessions( )         42.2        81.2       25.1             35.9

Other costs and                                     
eliminations((1))     (6.5)       (8.0)     (32.7)           (30.5)

Consolidated( )   $ 2,946.8   $ 2,896.2   $  109.8   $        100.5
                                                                   

((1)) The Other costs and eliminations category includes corporate and
      other costs that are not
      directly allocable to segments and also includes inter-segment
      eliminations.
       

Backlog reached $2.428 billion at December 31, 2012 compared to $2.390 billion 
for 2011, with the extended duration of work beyond the next twelve months 
representing 42 per cent versus 38 per cent at year end 2011.

Not included in backlog, but important to Aecon's prospects due to the 
significant volume involved, is the expected revenue from Aecon's growing 
alliances and supplier-of-choice arrangements where the amount and/or value of 
work to be carried out is not specified. In 2012, this additional work 
represented approximately 25 per cent of overall revenue.

OPERATING AND FINANCIAL RESULTS

"Aecon's operational performance in 2012 sets the foundation for us to 
continue making progress on all fronts," said Teri McKibbon, Chief Operating 
Officer. "Strong performance in mining, industrial operations and continued 
improvements in buildings operations - along with a solid backlog and 
significant bidding activity - bodes well for our ongoing performance going 
forward."

While operating profit increased by $9.3 million to $109.8 million for 2012, 
the comparison of year-over-year results was significantly impacted by gains 
from the sale of assets and investments in 2011 ($11.5 million from Israel 
alone) as well as operating profits from operations in Israel ($6.8 million) 
prior to their sale in September 2011. After adjusting for gains from the 
sale of assets and investments and operating profits from operations in Israel 
in 2011, operating profit for 2012 was $31.1 million higher than 2011.

Adjusted EBITDA (excluding gains on sale of assets and investments) increased 
by 17 per cent to $172.4 million for the year ($147.2 million in 2011) due 
primarily to improved margins (adjusted EBITDA margin of 5.9 per cent in 2012 
versus 5.1 per cent in 2011).

For the year ended December 31, 2012, Aecon operated in three principal 
segments within the construction and infrastructure development industry: 
Infrastructure, Industrial and Concessions.

INFRASTRUCTURE SEGMENT

The Infrastructure segment includes all aspects of civil construction from 
highways, bridges and tunnels to airports, marine facilities, transit and 
power projects as well as utilities and pipeline construction, buildings 
construction and mining operations.

INFRASTRUCTURE

Financial Highlights
                                                                     
                           Three months ended           Year ended

$ millions( )                   December 31             December 31
                           2012        2011        2012        2011 
                                                                     

Revenue( )               $ 601.4   $    553.2   $ 1,897.1   $ 1,904.7

Gross profit( )          $  54.6   $     73.5   $   160.7   $   151.1

EBITDA( )                $  45.0   $     58.4   $   105.7   $   110.4

Adjusted EBITDA( )       $  44.8   $     57.4   $   104.7   $   105.8

Operating profit( )      $  31.0   $     45.8   $    59.5   $    64.9
                                                                     

EBITDA margin( )            7.5%        10.6%        5.6%        5.8%

Adjusted EBITDA margin                                     
( )                         7.4%        10.4%        5.5%        5.6%

Operating margin( )         5.2%         8.3%        3.1%        3.4%

Backlog( )                                      $   1,677   $   1,516
                                                                     

The increase in gross profit within Infrastructure was due primarily to a 
strong performance from Mining operations, reflecting ongoing growth in the 
oil sands, as well as from improvements in Utilities operations. These 
improvements were partly offset by lower gross profit from Transportation and 
Heavy Civil operations.

For the three months and year ended December 31, 2012, the operating profit in 
the Infrastructure segment increased/(decreased) over the same periods last 
year as follows:
                                                                   
                                 Three months ended     Year ended

$ millions                            December 31       December 31
                                                                   

Transportation( )              $              (0.4)   $      (12.8)

Heavy Civil( )                               (12.1)          (16.5)

Utilities( )                                   2.4            (3.2)

Mining( )                                                          

  Ongoing operations( )                        9.8            36.1 

  Gain on sale of equipment( )                (1.1)           (4.3)

Social Infrastructure( )                     (13.4)           (4.7)
                                                                   

Decrease in Infrastructure                           
operating profit( )            $             (14.8)   $       (5.4)
                                                       

For the year ended December 31, 2012, the decline in operating profit 
reflected lower profits in the Heavy Civil sector due to a number of 
significant projects closed out during the year. This included construction 
of the New Quito Airport where a combination of lower revenue and lower margin 
resulted in an approximate $24 million year-over-year decline in Heavy Civil 
operating profit. While this was largely offset by the release of certain 
project contingencies related to Quito in the Concessions segment and of 
income taxes related to the project, it had an adverse impact on 
Infrastructure profit and margin.

In addition, lower volume and margin in Transportation and Social 
Infrastructure were contributing factors. Increased profits in Mining 
operations in Western Canada were due to higher volume and margin and improved 
equipment utilization.

Infrastructure backlog at December 31, 2012 rose to $1,677 million - an 
increase of $161 million or 11 percent - as compared to $1,516 million in 
2011. New contract awards totaled $2,058 million in 2012 compared to $1,391 
million in the prior year.

INDUSTRIAL SEGMENT

Industrial operations include all of Aecon's industrial manufacturing and 
construction activities including in-plant construction, fabrication of 
specialty pipe, assembly of custom module units and the design and manufacture 
of once-through heat recovery steam generators.

INDUSTRIAL

Financial Highlights
                                                                   
                           Three months ended          Year ended

$ millions                      December 31           December 31
                           2012        2011        2012       2011 
                                                                   

Revenue                  $ 339.4   $    230.1   $ 1,014.0   $ 918.3

Gross profit             $  42.8   $     32.7   $   122.6   $  91.2

EBITDA                   $  25.8   $     17.4   $    65.4   $  38.4

Adjusted EBITDA          $  26.0   $     17.4   $    65.5   $  38.7

Operating profit         $  23.9   $     15.5   $    57.9   $  30.2
                                                                   

EBITDA margin               7.6%         7.6%        6.5%      4.2%

Adjusted EBITDA margin      7.6%         7.6%        6.5%      4.2%

Operating margin            7.0%         6.7%        5.7%      3.3%

Backlog                                         $     751   $   874
                                                                   

The improvements in the Industrial segment resulted from improved margins and 
higher volume in the resources and commodity mining sector in Western Canada 
operations as well as increased volume from Central Canada's fabrication 
operations.

For the three months and year ended December 31, 2012, the operating profit in 
the Industrial segment increased/(decreased) over the same periods last year 
as follows:
                                                                       
                                     Three months ended     Year ended

$ millions                                December 31       December 31
                                                                       

Heavy Industrial (Construction and                       
Fabrication)                       $                7.5   $        31.3

IST                                                 0.9           (3.6)

Increase in Industrial operating                         
profit                             $                8.4   $        27.7
                                                             

Industrial backlog at December 31, 2012 was $123 million lower than the same 
time last year primarily due to lower backlog in Heavy Industrial operations. 
Most of the reduction in new awards reflects the year-over-year impact of 
several large multi-year project awards received in the second half of 2011.

CONCESSIONS SEGMENT

The Concessions segment includes the development, operation and financing of 
infrastructure projects by way of public-private partnership, 
build-own-operate-transfer or other alternative financing contract structures.

CONCESSIONS 
Financial Highlights 
                                                                 
                           Three months ended        Year ended

$ millions                      December 31          December 31
                            2012        2011      2012      2011 
                                                                 

Revenue                  $   10.6   $    10.6   $  42.2   $  81.2

Gross profit             $   13.0   $     6.3   $  31.7   $  31.8

EBITDA                   $   12.3   $     5.0   $  28.1   $  39.3

Adjusted EBITDA          $   12.3   $     5.0   $  28.1   $  27.8

Operating profit         $   12.3   $     4.1   $  25.1   $  35.9
                                                                 

EBITDA margin              116.3%       47.4%     66.5%     48.4%

Adjusted EBITDA margin     116.3%       47.4%     66.5%     34.2%

Operating margin           116.3%       39.0%     59.5%     44.2%
                                                                 

For the three months and year ended December 31, 2012, the operating profit in 
the Concessions segment increased/(decreased) over the same periods last year 
as follows:
                                                                       
                                   Three months ended       Year ended

$ millions                             December 31          December 31
                                                                       

Quito Airport Concessionaire   $                  8.2     $         7.5

Cross Israel Highway                               -              (6.8)
Operator (sold in Q3 2011)

Gain on sale of investment                         -             (11.5)
in operator of CIH in 2011

Increase/(decrease) in         $                  8.2     $      (10.8)
Concessions operating profit
                                                             

The majority of the decrease in revenue and operating profit in the 
Concessions segment during the year ended December 31, 2012 is the result of 
the sale in the third quarter of 2011 of Aecon's interest in the operator of 
the Cross Israel Highway. The segment benefitted in 2012 from the release of 
contingencies related to the Quito airport project following substantial 
completion of the project during the fourth quarter.

DIVIDEND INCREASE 
Aecon's Board of Directors approved an increase in the dividend to be paid to 
all holders of Aecon Common Shares. The annual dividend will increase to $0.32 
per share (from $0.28 per share) to be paid in four quarterly payments of 
$0.08 cents per share (from $0.07 per share). The first increased quarterly 
dividend payment will be paid on April 1, 2013 to shareholders of record on 
March 22, 2013.

CONSOLIDATED RESULTS

The consolidated results for the three months and years ended December 31, 
2012 and 2011 are available at the end of this news release.

Balance Sheet Highlights                                            
                                           December 31   December 31

(in thousands of Canadian dollars)                2012          2011
(unaudited)
                                                                    

Cash and cash equivalents and restricted $     106,210 $     221,290
cash

Other current assets                         1,022,417       842,959

Property, plant and equipment                  508,849       482,148

Other long-term assets                         491,806       437,698

Total Assets                             $   2,129,282 $   1,984,095
                                                                    

Current liabilities                      $     873,951 $     791,836

Non-recourse project debt                      156,041       137,078

Long-term debt                                 146,048       142,581

Convertible debentures                         253,189       251,429

Other long-term liabilities                    150,485       171,294
                                                                    

Equity                                         549,568       489,877

Total Liabilities and Equity             $   2,129,282 $   1,984,095
                                                          

CONFERENCE CALL

A conference call has been scheduled for Wednesday, March 13, 2013 at 9:00 
a.m. (ET) to discuss Aecon's 2012 year end financial results. Participants 
should dial 416-981-9012 or 1-800-379-4140 at least 10 minutes prior to the 
conference time. A replay will be available after 11:00 a.m. at 1-800-558-5253 
or 416-626-4100 until midnight on March 20, 2013. The reservation number is 
21649205.

ABOUT AECON

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.

STATEMENT ON FORWARD-LOOKING INFORMATION

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: interest and foreign exchange rates, global 
equity and capital markets, business competition 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, financial condition, expected 
financial results, performance, prospects, ongoing objectives, 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.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands of Canadian dollars, except per share amounts) (unaudited)
                                                                           
                     For the three months
                             ended                    For the year ended
                  December 31   December 31     December 31     December 31
                         2012          2011            2012            2011
                                                                           

Revenue           $   948,702   $   790,340   $   2,946,796   $   2,896,167

Direct costs and
expenses            (838,346)     (677,596)     (2,631,791)     (2,622,034)

Gross profit          110,356       112,744         315,005         274,133
                                                                           

Marketing,
general and
administrative
expenses             (38,457)      (41,618)       (157,191)       (138,832)

Depreciation and
amortization         (17,772)      (16,772)        (63,562)        (62,548)

Income from
construction
projects
accounted for
using the equity
method                  5,757         3,742          14,440          14,058

Other income
(loss)                    408       (1,249)           1,072          13,721

Operating profit       60,292        56,847         109,764         100,532
                                                                           

Finance income            495           535           2,135           5,679

Finance costs         (5,598)      (10,358)        (29,275)        (36,923)

Fair value gain
(loss) on
convertible
debentures              3,944         (275)           4,260           4,269

Profit before
income taxes           59,133        46,749          86,884          73,557

Income tax
expense                 (577)       (9,794)         (5,943)        (11,414)

Profit for the
period            $    58,556   $    36,955   $      80,941   $      62,143

Attributable to:                                                           

  Shareholders    $    56,427   $    36,699   $      77,978   $      57,553

  Non-controlling
  interests             2,129           256           2,963           4,590
                  $    58,556   $    36,955   $      80,941   $      62,143
                                                                           
                                                                           

Basic earnings
per share         $      1.07   $      0.69   $        1.47   $        1.07

Diluted earnings
per share         $      0.72   $      0.49   $        1.18   $        0.84
                                                                 



Vince Borg Senior Advisor, Corporate Affairs Aecon Group Inc. 416-297-2615 
vborg@aecon.com

SOURCE: Aecon Group Inc.

To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/March2013/12/c4346.html

CO: Aecon Group Inc.
ST: Ontario
NI: CST ERN CONF DIV 

-0- Mar/12/2013 21:05 GMT


 
Press spacebar to pause and continue. Press esc to stop.