TORONTO -- Canadian construction heavyweight Aecon Group Inc. is finding new bidding opportunities are coming forward at an unprecedented pace that's likely the result of government economic stimulus packages, top executives say.
For the past six or eight weeks, there have been significant new project opportunities every week that are "clearly being pushed as part of the stimulus package that we've been hearing so much about," Aecon president Scott Balfour said yesterday on a conference call for analysts.
One analyst noted that some of the projects on Aecon's to-do list have been there for some time before the economic downturn and asked how much credit to give to the government stimulus spending.
"Truthfully, I don't know that it's possible for us to differentiate," Mr. Balfour replied. "Would all those projects still have been going but for the stimulus package? I just don't know." But he added that the pace and number of projects coming forward at once has never been seen before "and so I can't help but believe that a lot of that is as a result of the incremental funding from the stimulus programs."
John Beck, Aecon's chairman and chief executive officer, said the Toronto-headquartered company is seeing an urgency to spend the money prior to March 31, 2011, the announced date for the end of the federal stimulus program.
The company announced late Tuesday that second-quarter revenue was $613-million, a record that was helped by recent acquisitions. A year earlier, before the purchase of Lockerbie & Hole of Edmonton and South Rock, a smaller Alberta road builder, revenue in the same period was $438-million.
Aecon also said profit for the second quarter of 2009 fell to $9.9-million or 18 cents a share, from $15.6-million or 31 cents a share last year. Backlog was $1.66-billion for the quarter ended June 30, compared with $1.5-billion last year.
Mr. Balfour said most of the "heavy lifting" involved with the integration of the Lockerbie & Hole business is complete, with the company's western base now in the L&H headquarters.
Aecon said at the time that the $220-million acquisition of Lockerbie & Hole was announced in February that it was expecting to capitalize on a rebound in the Alberta energy sector.
AECON GROUP (ARE)
Close: $10.40, down 19¢
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Aecon
Q2 2009 2008
Profit $9.9-million $15.6-million
EPS 18 cents 31 cents
Revenue $613-million $438-million
Source: Company report
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