Release Date: March 20, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you provide more details on the 2025 outlook for Canada, particularly regarding utilization and the bid funnel for non-oil sands mining awards? A: Joseph Lambert, President and CEO, explained that the company expects utilization to remain similar to last year, with a slight increase in oil sands demand. To achieve a 75% utilization target, winning work outside the oil sands is necessary. Active tenders in Ontario are ongoing, and if needed, assets could be prioritized for work in Australia or sold if underutilized.
Q: What factors contributed to the decline in the Oil Sands business, and is it expected to recover? A: Joseph Lambert noted a 30% drop last year, with current levels expected to remain consistent. The decline could be due to in-house or deferred work, but it's challenging to pinpoint. The company plans to maintain current demand levels and sees potential upside with increased oil sands production.
Q: Can you elaborate on the adjustments made to gross margin, specifically regarding shipping costs and claims? A: Joseph Lambert clarified that the shipping costs were higher than anticipated, and the claim was resolved as part of a four-year contract extension, which was negotiated into the contract.
Q: How does the company plan to mobilize equipment for new projects in Australia, given the high utilization targets? A: Joseph Lambert stated that the company would continue transferring underutilized assets from Canada to Australia for long-term contracts. This approach provides better returns on capital, despite short-term shipping challenges. Rebuilding existing assets to new standards is preferred over purchasing new equipment.
Q: Are there any plans to change the company's GICS code or corporate name to better reflect its business operations? A: Jason Veenstra, CFO, mentioned that the company is engaging in a GICS review to reflect its diversified business. Discussions are scheduled for next week. A name change is under consideration, but no decision has been made yet.
Q: How has the weather in Australia impacted Q1 operations, and what are the expectations for the rest of the year? A: Joseph Lambert explained that Q1 is typically the most weather-impacted quarter in Australia due to rains. Cyclone Alfred had a significant impact, but the company expects higher performance in later quarters as growth assets are delivered and ramped up.
Q: What is the company's strategy for increasing its infrastructure business to 25% of earnings? A: Joseph Lambert emphasized a focus on capital-light projects, similar to the Fargo project, which require modest capital and offer quick positive cash flow. The company aims to pursue infrastructure projects in the US and Australia, with a focus on earthworks and civil construction.
Q: How is the competition for bids in Australia, and has there been any change in sentiment due to global market conditions? A: Joseph Lambert reported strong demand and disciplined competition in Australia. The company is optimistic about winning work due to its safe, low-cost structure and strong client relationships. Early renewal and expansion opportunities continue to present themselves.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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