Aecon reports first quarter 2024 results

TORONTO, April 24, 2024 (GLOBE NEWSWIRE) — Aecon Group Inc. (TSX: ARE) (“Aecon” or the “Company”) today reported results for the first quarter of 2024.

“With backlog of $6.3 billion, a strong bid pipeline, and recurring revenue programs continuing to see robust demand, Aecon is focused on achieving improved profitability and margin predictability, and believes it is positioned to achieve further revenue growth over the next few years,” said Jean-Louis Servranckx, President and Chief Executive Officer, Aecon Group Inc. “Moving forward, Aecon will continue to pursue and deliver the majority of its work in established markets and under more collaborative project delivery models, while embracing new opportunities to grow in areas linked to the energy transition and in select U.S. and international markets.”

HIGHLIGHTS
All quarterly financial information contained in this news release is unaudited.

• Revenue for the three months ended March 31, 2024 of $847 million was $261 million, or 24%, lower compared to the same period in 2023.
• Adjusted EBITDA⁽¹⁾⁽²⁾ of $32.9 million for the three months ended March 31, 2024 (Adjusted EBITDA margin⁽³⁾ of 3.9%) compared to Adjusted EBITDA of $24.6 million (Adjusted EBITDA margin of 2.2%) in the same period in 2023.
• Net loss of $6.1 million (diluted loss per share of $0.10) for the three months ended March 31, 2024 compared to net loss of $9.4 million (diluted loss per share of $0.15) in the same period in 2023.
• Four large fixed price legacy projects being performed by joint ventures in which Aecon is a participant (see Section 5 “Recent Developments”, Section 10.2 “Contingencies” and Section 13 “Risk Factors” of the Company’s March 31, 2024 Management’s Discussion and Analysis (“MD&A”) which is available on the Company’s profile on SEDAR+ (www.sedarplus.com) are being negatively impacted due to additional costs for which the joint ventures assert that the owners are contractually responsible, including for, among other things, unforeseeable site conditions, third party delays, COVID-19, supply chain disruptions, and inflation related to labour and materials. In the first three months of 2024, Aecon recognized an operating profit of $nil from these four legacy projects. At March 31, 2024 the remaining backlog to be worked off on these projects was $330 million compared to $420 million at December 31, 2023 and $801 million at March 31, 2023.
• Reported backlog at March 31, 2024 of $6,273 million compared to backlog of $6,002 million at March 31, 2023. New contract awards of $963 million were booked in the first quarter of 2024 compared to $812 million in the same period in 2023.
• Aecon announced the appointment of Jerome Julier to the position of Executive Vice President and Chief Financial Officer, effective April 8, 2024.
• Contrecoeur Terminal Constructors General Partnership, a consortium in which Aecon holds a 40% interest, executed a contract with the Montréal Port Authority for the Contrecœur Terminal Expansion project in-water works under a Progressive Design-Build approach in Québec.
• Aecon EBC Ladore General Partnership, a consortium in which Aecon holds a 60% interest, was awarded the first stage of a two-stage contract with an expected value of $156 million by BC Hydro to deliver the Ladore Spillway Seismic Upgrade Project in British Columbia under a collaborative Early Contractor Involvement (“ECI”) model. The ECI phase will commence in the second quarter of 2024, with construction planned to commence in 2025 subject to overall project approvals.
• Aecon’s fifth annual Sustainability Report, entitled Advancing the Energy Transition was released on April 22, 2024, and is available on Aecon’s website at www.aecon.com/sustainability.
• Subsequent to quarter-end:
  • VIports Partners (“VIports”), an Aecon-led consortium, was selected by the U.S. Virgin Islands Port Authority to redevelop the Cyril E. King Airport in St. Thomas and the Henry E. Rohlsen Airport in St. Croix under a collaborative Design, Build, Finance, Operate and Maintain Public-Private Partnership model. Aecon Concessions is the development lead and will hold a 50% equity interest in the project’s 40-year concession, and Aecon is the design-build lead. Financial close is expected in the first quarter of 2025 following a nine-month transition period.
  • Aecon was awarded a US$48 million contract by the Government of Anguilla for the Clayton J. Lloyd International Airport Redevelopment Program Package 3 project.
  • South Fraser Station Partners, a consortium in which Aecon holds a 33.3% interest, was selected by the Province of British Columbia as the preferred proponent for the stations contract on the Surrey Langley SkyTrain Project. Financial close is expected in the second quarter of 2024.

CONSOLIDATED FINANCIAL HIGHLIGHTS

(1)  This press release presents certain non-GAAP and supplementary financial measures, as well as non-GAAP ratios to assist readers in understanding the Company’s performance (GAAP refers to Canadian Generally Accepted Accounting Principles). Further details on these measures and ratios are included in the “Non-GAAP and Supplementary Financial Measures” and “Reconciliations and Calculations” sections of this press release.
(2)  This is a non-GAAP financial measure. Refer to the “Non-GAAP and Supplementary Financial Measures” and “Reconciliations and Calculations” sections of this press release for more information on each non-GAAP financial measure.
(3)  This is a non-GAAP ratio. Refer to the “Non-GAAP and Supplementary Financial Measures” section of this press release for more information on each non-GAAP ratio.
(4)  This is a supplementary financial measure. Refer to the “Non-GAAP and Supplementary Financial Measures” section of this press release for more information on each supplementary financial measure.

Revenue for the three months ended March 31, 2024 of $847 million was $261 million, or 24%, lower compared to the same period in 2023. Revenue was lower in the Construction segment ($247 million) driven by decreases in industrial ($181 million), urban transportation solutions ($41 million), civil ($36 million), and utilities ($13 million), partially offset by higher revenue in nuclear operations ($24 million). In the Concessions segment, lower revenue of $14 million for the three months ended March 31, 2024 was primarily due to the use of the equity method of accounting in 2024 for Aecon’s 50.1% retained interest in the Bermuda International Airport concessionaire (“Skyport”) following the sale of a 49.9% interest in Skyport in the third quarter of 2023.

Operating loss of $4.2 million for the three months ended March 31, 2024 declined by $9.8 million compared to an operating profit of $5.6 million in the same period in 2023. Contributing to the change in operating profit was a decrease in gross profit in the period of $4.0 million. In the Concessions segment, gross profit decreased by $5.3 million primarily from the use of the equity method of accounting in 2024 for Aecon’s 50.1% retained interest in the Bermuda International Airport following the sale of a 49.9% interest in Skyport in the third quarter of 2023. Partially offsetting this decrease was higher gross profit in the Construction segment of $1.4 million primarily from higher gross profit margin in urban transportation solutions and utilities and from higher volume and gross profit margin in nuclear operations, partially offset by the impact of lower volume on gross profit in industrial and civil operations.

Other income of $1.7 million in the first quarter of 2024 was $10.9 million lower compared to the same period in 2023. The decrease is primarily related to a lower gain on the sale of property and equipment of $11.2 million in the Construction segment.

Reported backlog at March 31, 2024 of $6,273 million compared to backlog of $6,002 million at March 31, 2023. New contract awards of $963 million were booked in the first quarter of 2024 compared to $812 million in the same period in 2023.

REPORTING SEGMENTS

Aecon reports its financial performance on the basis of two segments: Construction and Concessions, which are described in the Company’s March 31, 2024 Management’s Discussion and Analysis (“MD&A”).

CONSTRUCTION SEGMENT

Financial Highlights

(1)  This is a non-GAAP financial measure. Refer to the “Non-GAAP and Supplementary Financial Measures” and “Reconciliations and Calculations” sections of this press release for more information on each non-GAAP financial measure.
(2)  This is a non-GAAP ratio. Refer to the “Non-GAAP and Supplementary Financial Measures” and “Reconciliations and Calculations” sections of this press release for more information on each non-GAAP ratio.
(3)  This is a supplementary financial measure. Refer to the “Non-GAAP and Supplementary Financial Measures” section of this press release for more information on each supplementary financial measure.

Revenue in the Construction segment for the three months ended March 31, 2024 of $844 million was $247 million, or 23%, lower compared to the same period in 2023. Construction segment revenue was lower in industrial operations ($181 million) primarily due to decreased activity on mainline pipeline work in western Canada following the achievement of substantial completion on a project in the third quarter of 2023, in urban transportation solutions ($41 million) from a lower volume of light rail transit work in Ontario, in civil operations ($36 million) primarily from a lower volume of roadbuilding construction work in eastern Canada of $31 million as a result of the sale of Aecon Transportation East (“ATE”) in the second quarter of 2023, and in utilities operations ($13 million) from a decreased volume of telecommunications and oil and gas distribution work, partially offset by an increased volume of high-voltage electrical transmission and battery energy storage system work. Partially offsetting these decreases was higher revenue in nuclear operations ($24 million) driven by an increased volume of refurbishment work at nuclear generating stations in Ontario and the U.S.

Operating profit in the Construction segment of $7.4 million in the first three months of 2024 decreased by $8.8 million compared to an operating profit of $16.2 million in the same period in 2023. The lower operating profit was driven by a decrease in gross profit in industrial operations and a decrease in gains on the sale of property and equipment of $11.2 million. Partially offsetting these decreases were higher gross profit margin in utilities, higher volume and gross profit margin in nuclear operations, and higher gross profit margin in urban transportation solutions. Higher operating profit in civil operations was primarily due to a lower seasonal operating loss from roadbuilding construction work following the sale of ATE in the second quarter of 2023 and partially offset by lower gross profit margin from major projects in western Canada. Operating profit in civil was also impacted by a negative gross profit of $2.8 million in the first quarter of 2023 versus $nil in the first quarter of 2024 from one of the four fixed price legacy projects discussed in Section 5 “Recent Developments” and Section 10.2 “Contingencies” in the Company’s March 31, 2024 MD&A, and Section 13 “Risk Factors” in the 2023 Annual MD&A.

Construction backlog at March 31, 2024 was $6,169 million compared to $5,902 million at the same time in 2023. Backlog increased period-over-period in nuclear ($850 million) and industrial operations ($2 million), while backlog decreased in civil operations ($306 million), urban transportation solutions ($216 million), and utilities ($62 million). New contract awards of $960 million in the first quarter of 2024 were $165 million higher than the same period in 2023.

CONCESSIONS SEGMENT

Financial Highlights

(1)  This is a non-GAAP financial measure. Refer to the “Non-GAAP and Supplementary Financial Measures” and “Reconciliations and Calculations” sections of this press release for more information on each non-GAAP financial measure.

Aecon currently holds a 50.1% interest in Skyport, the concessionaire responsible for the Bermuda airport’s operations, maintenance, and commercial functions, and the entity that will manage and coordinate the overall delivery of the Bermuda International Airport Redevelopment Project over a 30-year concession term that commenced in 2017. Aecon’s participation in Skyport is accounted for using the equity method. On September 20, 2023, Aecon sold a 49.9% interest in Skyport to Connor, Clark & Lunn Infrastructure (“CC&L Infrastructure”) with Aecon retaining the management contract for the airport. Prior to this transaction, Aecon’s participation in Skyport was 100% consolidated and, as such, was accounted for in the consolidated financial statements by reflecting, line by line, the assets, liabilities, revenue and expenses of Skyport. Aecon’s concession participation in the Eglinton Crosstown light rail transit (“LRT”), Finch West LRT, Gordie Howe International Bridge, Waterloo LRT, and the GO Expansion On-Corridor Works projects are joint ventures that are also accounted for using the equity method.

For the three months ended March 31, 2024, revenue in the Concessions segment of $3 million was $14 million lower than the same period in 2023 primarily due to lower reported revenue from the Bermuda International Airport due to the commencement of the equity method accounting for the project following the above noted sale of a 49.9% interest in Skyport in the third quarter of 2023.

Operating profit in the Concessions segment of $1.1 million for the three months ended March 31, 2024 decreased by $1.3 million compared to an operating profit of $2.4 million in the first three months of 2023. This decrease was primarily due to lower operating profit from the Bermuda International Airport, partially offset by an increase in management and development fees from the balance of the concession operations. Under the equity method of accounting, operating results for Aecon’s interest in Skyport in the first quarter of 2024 were reported net of financing costs and income taxes, which contributed to the lower quarter-over-quarter operating profit results. Passenger traffic levels, which are the primary driver of Aecon’s results from operations at the Bermuda International Airport project, averaged 31% in 2021, 59% in 2022, 75% in 2023, and 81% in the first quarter of 2024 of 2019 pre-pandemic traffic levels. These averages reflect generally improving traffic over time as a percentage of pre-pandemic levels.

Except for Operations and Maintenance (“O&M”) activities under contract for the next five years and that can be readily quantified, Aecon does not include in its reported backlog expected revenue from concession agreements. As such, while Aecon expects future revenue from its concession assets, no concession backlog, other than from such O&M activities for the next five years, is reported.

OUTLOOK

Aecon’s goal is to build a resilient company through a balanced and diversified work portfolio across sectors, markets, geographies, project types, sizes and delivery models while enhancing critical execution capabilities and project selection to play to its strengths. Aecon will continue to leverage its self-perform capabilities and One Aecon approach with a goal to maximize value for clients through improved cost certainty and schedule, while offering a broad range of infrastructure services from development, engineering, investment, and construction to longer term operations and maintenance. Aecon will continue to pursue and deliver the majority of its work in established markets, while embracing new opportunities to grow in areas linked to decarbonization and the energy transition, and in U.S. and international markets. These opportunities are intended over the long term to diversify Aecon’s geographic presence, provide further growth opportunities and deliver more consistent earnings through economic cycles. To complement its priority markets, Aecon is pursuing a balanced portfolio of work delivered through both fixed and non-fixed price contracting models with the goal of reducing fixed price work to balance risk with acceptable returns. With backlog of $6.3 billion at the end of the first quarter of 2024, recurring revenue programs continuing to see robust demand, and a strong bid pipeline, Aecon believes it is positioned to achieve further revenue growth over the next few years and is focused on achieving improved profitability and margin predictability.

In the Construction segment, demand for Aecon’s services across Canada continues to be strong. Development phase work is ongoing in consortiums in which Aecon is a participant to deliver the long-term GO Expansion On-Corridor Works project, the Scarborough Subway Extension Stations, Rail and Systems project, and the Darlington New Nuclear Project, all in Ontario, and the Contrecœur Terminal Expansion project in-water works in Quebec. These projects are being delivered using progressive design-build or alliance models and each project is expected to move into the construction phase in 2025. The GO Expansion On-Corridor Works project also includes an operations and maintenance component over a 23-year term commencing January 1, 2025. None of the anticipated work from these four significant long-term progressive design-build projects is yet reflected in backlog. As well, a consortium in which Aecon is a participant was selected in April 2024 by the Province of British Columbia as the preferred proponent to design and build the Surrey Langley SkyTrain Stations project in British Columbia.

In the Concessions segment, there are a number of opportunities to add to the existing portfolio of Canadian and international concessions in the next 12 to 24 months, including projects with private sector clients that support a collective focus on sustainability and the transition to a net-zero economy as well as private sector development expertise and investment to support aging infrastructure, mobility, connectivity and population growth. The GO Expansion On-Corridor Works project noted above and the Oneida Energy Storage project, a consortium in which Aecon Concessions is an equity partner that will deliver a 250 megawatt / 1,000 megawatt-hour energy storage facility near Nanticoke Ontario, are examples of the role Aecon’s Concessions segment is playing in developing, operating, and maintaining assets related to this transition. In addition, in the first quarter of 2024, an Aecon-led consortium was selected by the U.S. Virgin Islands Port Authority to redevelop the Cyril E. King Airport in St. Thomas and the Henry E. Rohlsen Airport in St. Croix under a collaborative Design, Build, Finance, Operate and Maintain Public-Private Partnership model.

Global and Canadian economic conditions impacting inflation, interest rates, and overall supply chain efficiency have stabilized, and these factors have largely been and will continue to be reflected in the pricing and commercial terms of the Company’s recent and prospective project awards and bids. However, certain ongoing joint venture projects that were bid some years ago have experienced impacts related, in part, to those factors, that will require satisfactory resolution of claims with the respective clients. Results have been negatively impacted by these four legacy projects in recent periods, undermining positive revenue and profitability trends in the balance of Aecon’s business. Until these projects are complete and related claims have been resolved, there is a risk that this could also occur in future periods – see Section 5 “Recent Developments” and Section 10.2 “Contingencies” in the Company’s March 31, 2024 MD&A, and Section 13 “Risk Factors” in the 2023 Annual MD&A regarding the risk on four large fixed price legacy projects entered into in 2018 or earlier by joint ventures in which Aecon is a participant.

At March 31, 2024, Aecon held cash and cash equivalents, excluding balances held by joint operations, of $123 million. In addition, at March 31, 2024, Aecon had committed revolving credit facilities of $850 million, of which $76 million was drawn, and $7 million was utilized for letters of credit. The Company has no debt or working capital credit facility maturities until 2027, except equipment loans and leases in the normal course.

Revenue in 2024 will be impacted by the three strategic transactions completed in 2023, the substantial completion of several large projects in 2023, and the five major projects currently in the development phase by consortiums in which Aecon is a participant being delivered using the progressive design-build models which are expected to move into the construction phase in 2025. The completion and satisfactory resolution of claims on the four legacy projects with the respective clients remains a critical focus for the Company and its partners, while the remainder of the business continues to perform as expected, supported by the strong level of backlog, and the strong demand environment for Aecon’s services, including recurring revenue programs.

CONSOLIDATED RESULTS

The consolidated results for the three months ended March 31, 2024 and 2023 are available at the end of this news release.

CONSOLIDATED BALANCE SHEET

CONFERENCE CALL

A conference call and live webcast has been scheduled for 9 a.m. (Eastern Time) on Thursday, April 25, 2024. A live webcast of the conference call can be accessed using this link and will be available at www.aecon.com/InvestorCalendar. Participants can also dial-in to the conference call and pre-register using this link. After registering, an email will be sent, including dial-in details and a unique access code required to join the live call. Please ensure you have registered at least 15 minutes prior to the conference call time.

An accompanying presentation of the first quarter 2024 financial results will also be available after market close on April 24, 2024 at www.aecon.com/investing. For those unable to attend, a replay will be available within one hour following the live webcast and conference call at the same webcast link above.

AECON 2024 ANNUAL MEETING OF SHAREHOLDERS

Aecon’s Annual Meeting of Shareholders will be held on Tuesday, June 4, 2024. Additional details will be set out in the Notice of Annual Meeting of Shareholders and Management Information Circular which will be filed on SEDAR+ prior to the meeting.

ABOUT AECON

Aecon Group Inc. (TSX: ARE) is a North American construction and infrastructure development company with global experience. Aecon delivers integrated solutions to private and public-sector clients through its Construction segment in the Civil, Urban Transportation, Nuclear, Utility and Industrial sectors, and provides project development, financing, investment, management, and operations and maintenance services through its Concessions segment. Join our online community on X, LinkedIn, Facebook, and Instagram @AeconGroupInc.  

For further information: 

Adam Borgatti
SVP, Corporate Development and Investor Relations
416-297-2600
ir@aecon.com

Nicole Court
Vice President, Corporate Affairs
416-297-2600
corpaffairs@aecon.com

NON-GAAP AND SUPPLEMENTARY FINANCIAL MEASURES

The press release presents certain non-GAAP and supplementary financial measures, as well as non-GAAP ratios to assist readers in understanding the Company’s performance (“GAAP” refers to Generally Accepted Accounting Principles under IFRS). These measures do not have any standardized meaning and therefore are unlikely to be comparable to similar measures presented by other issuers and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

Throughout this press release, the following terms are used, which do not have a standardized meaning under GAAP.

Non-GAAP Financial Measures

A non-GAAP financial measure: (a) depicts the historical or expected future financial performance, financial position or cash flow of the Company; (b) with respect to its composition, excludes an amount that is included in, or includes an amount that is excluded from, the composition of the most comparable financial measure presented in the primary consolidated financial statements; (c) is not presented in the financial statements of the Company; and (d) is not a ratio.

Non-GAAP financial measures presented and discussed in this press release are as follows:

• “Adjusted EBITDA” represents operating profit (loss) adjusted to exclude depreciation and amortization, the gain (loss) on sale of assets and investments, and net income (loss) from projects accounted for using the equity method, but including “Equity Project EBITDA” from projects accounted for using the equity method (refer to the “Reconciliations and Calculations” section of this press release for a quantitative reconciliation to the most comparable financial measure).
• “Equity Project EBITDA” represents Aecon’s proportionate share of the earnings or losses from projects accounted for using the equity method before depreciation and amortization, finance income, finance cost and income tax expense (recovery) (refer to the “Reconciliations and Calculations” section of this press release for a quantitative reconciliation to the most comparable financial measure).

Management uses the above non-GAAP financial measures to analyze and evaluate operating performance. Aecon also believes the above financial measures are commonly used by the investment community for valuation purposes, and are useful complementary measures of profitability, and provide metrics useful in the construction industry. The most directly comparable measures calculated in accordance with GAAP are operating profit and profit (loss) attributable to shareholders.

Primary Financial Statements

Primary financial statement means any of the following: the consolidated balance sheets, the consolidated statements of income, the consolidated statements of comprehensive income, the consolidated statements of changes in equity, and the consolidated statements of cash flows.

Key financial measures presented in the primary financial statements of the Company and discussed in this press release are as follows:

• “Gross profit” represents revenue less direct costs and expenses. Not included in the calculation of gross profit are marketing, general and administrative expense (“MG&A”), depreciation and amortization, income (loss) from projects accounted for using the equity method, other income (loss), finance income, finance cost, income tax expense (recovery), and non-controlling interests.
• “Operating profit (loss)” represents the profit (loss) from operations, before finance income, finance cost, income tax expense (recovery), and non-controlling interests.

The above measures are presented in the Company’s consolidated statements of income and are not meant to be a substitute for other subtotals or totals presented in accordance with GAAP, but rather should be evaluated in conjunction with such GAAP measures.

• “Backlog” (Remaining Performance Obligations) means the total value of work that has not yet been completed that: (a) has a high certainty of being performed as a result of the existence of an executed contract or work order specifying job scope, value and timing; or (b) has been awarded to Aecon, as evidenced by an executed binding letter of intent or agreement, describing the general job scope, value and timing of such work, and where the finalization of a formal contract in respect of such work is reasonably assured. Operations and maintenance (“O&M”) activities are provided under contracts that can cover a period of up to 30 years. In order to provide information that is comparable to the backlog of other categories of activity, Aecon limits backlog for O&M activities to the earlier of the contract term and the next five years.

Remaining Performance Obligations, i.e. Backlog, is presented in the notes to the Company’s annual consolidated financial statements and is not meant to be a substitute for other amounts presented in accordance with GAAP, but rather should be evaluated in conjunction with such GAAP measures.

Non-GAAP Ratios

A non-GAAP ratio is a financial measure presented in the form of a ratio, fraction, percentage or similar representation, and that has a non-GAAP financial measure as one of its components and is not disclosed in the financial statements of the Company.

A non-GAAP ratio presented and discussed in this press release is as follows:

• “Adjusted EBITDA margin” represents Adjusted EBITDA as a percentage of revenue.

Management uses the above non-GAAP ratio to analyze and evaluate operating performance. The most directly comparable measures calculated in accordance with GAAP are gross profit margin and operating margin.

Supplementary Financial Measures

A supplementary financial measure: (a) is, or is intended to be, disclosed on a periodic basis to depict the historical or expected future financial performance, financial position or cash flow of the Company; (b) is not presented in the financial statements of the Company; (c) is not a non-GAAP financial measure; and (d) is not a non-GAAP ratio.

Key supplementary financial measures presented in this press release are as follows:

• “Gross profit margin” represents gross profit as a percentage of revenue.
• “Operating margin” represents operating profit (loss) as a percentage of revenue.
• “MG&A as a percent of revenue” represents marketing, general and administrative expense as a percentage of revenue.

RECONCILIATIONS AND CALCULATIONS

Set out below is the calculation of Adjusted EBITDA by segment for the three months ended March 31, 2024 and 2023:

(1)  This is a non-GAAP financial measure. Refer to the “Non-GAAP and Supplementary Financial Measures” section in this press release for more information on each non-GAAP financial measure.

Set out below is the calculation of Equity Project EBITDA by segment for the three months ended March 31, 2024 and 2023:

(1)  Refer to Note 9 “Projects Accounted for Using the Equity Method” in March 31, 2024 interim condensed consolidated financial statements
(2)  This is a non-GAAP financial measure. Refer to the “Non-GAAP and Supplementary Financial Measures” section in this press release for more information on each non-GAAP financial measure.

STATEMENT ON FORWARD-LOOKING INFORMATION

The information in this press release includes certain forward-looking statements which may constitute forward-looking information under applicable securities laws. These forward-looking statements are based on currently available competitive, financial, and economic data and operating plans but are subject to known and unknown risks, assumptions and uncertainties. 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, including statements regarding: expectations regarding the impact of the four fixed price legacy projects and expected timelines of such projects; backlog and estimated duration; the impact of certain contingencies on Aecon (see: Section 10.2 “Contingencies” in the Company’s March 31, 2024 MD&A); the uncertainties related to the unpredictability of global economic conditions; its belief regarding the sufficiency of its current liquidity position including sufficiency of its cash position, unused credit capacity, and cash generated from its operations; its strategy of seeking to differentiate its service offering and execution capability and the expected results therefrom; its efforts to maintain a conservative capital position; expectations regarding the pipeline of opportunities available to Aecon; statements regarding the various phases of projects for Aecon; its strategic focus on projects linked to decarbonization, energy transition and sustainability and the opportunities arising therefrom; the diversification of Aecon’s geographic presence; opportunities to add to the existing portfolio of Canadian and international concessions in the next 12 to 24 months; Oaktree’s minority investment in Aecon Utilities, the expected benefits thereof and results therefrom, including the acceleration of growth of Aecon Utilities in Canada and the U.S.; the anticipated use of proceeds from Oaktree’s minority investment in Aecon Utilities; and the expansion of Aecon Utilities’ geographic reach and range of services in the U.S. Forward-looking statements may in some cases be identified by words such as “believes,” “possible,” “maintain,” “continues,” “completing,” “mitigating,” “anticipates,” “upon,” “commences,” “plans,” “expects,” “outlook,” “potential,” “estimates,” “intends,” “seeks,” “targets,” “strategy,” “indicative,” “may,” “will,” “should,” “would,” “can,” and “could,” or negative or grammatical versions thereof, or similar expressions. 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: the risk of not being able to drive a higher margin mix of business by participating in more complex projects, achieving operational efficiencies and synergies, and improving profitability and margins; the risk of not being able to adequately diversify its work portfolio; the risk of not being able to meet contractual schedules and other performance requirements on large, fixed priced contracts; the risk of not being able to meet its labour needs at reasonable costs; the risk of not being able to address any supply chain issues which may arise and pass on costs of supply increases to customers; the risk of not being able, through its joint ventures, to enter into implementation phases of certain projects following the successful completion of the relevant development phase; the risk of not being able to execute its strategy of building strong partnerships and alliances; the risk of not being able to execute its risk management strategy; the risk of not being able to grow backlog across the organization by winning major projects; the risk of not being able to maintain a number of open, recurring and repeat contracts; the risk of not being able to accurately assess the risks and opportunities related to its industry’s transition to a lower-carbon economy; the risk of not being able to oversee, and where appropriate, respond to known and unknown environmental and climate change-related risks, including the ability to recognize and adequately respond to climate change concerns or public, governmental and other stakeholders’ expectations on climate matters; the risk of not being able to meet its commitment to meeting its greenhouse gas emissions reduction targets; the risks associated with the strategy of differentiating its service offerings in key end markets; the risks associated with undertaking initiatives to train employees; the risks associated with the seasonal nature of its business; the risks associated with being able to participate in large projects; the risks associated with legal proceedings to which it is a party; the ability to successfully respond to shareholder activism; the risk that Aecon will not realize the strategic rationale for the sale of the equity interest in Skyport; the risk that Aecon will not realize the opportunities presented by a transition to a net-zero economy; risks associated with future pandemics and Aecon’s ability to respond to and implement measures to mitigate the impact of such pandemics; the risk that the strategic partnership with Oaktree will not realize the expected results and may negatively impact the existing business of Aecon Utilities; and the risk that Aecon Utilities will not realize opportunities to expand its geographic reach and range of services in the U.S.

These forward-looking statements are based on a variety of factors and assumptions including, but not limited to that: none of the risks identified above materialize, there are no unforeseen changes to economic and market conditions and no significant events occur outside the ordinary course of business. These assumptions are based on information currently available to Aecon, including information obtained from third-party sources. While the Company believes that such third-party sources are reliable sources of information, the Company has not independently verified the information. The Company has not ascertained the validity or accuracy of the underlying economic assumptions contained in such information from third-party sources and hereby disclaims any responsibility or liability whatsoever in respect of any information obtained from third-party sources.

Risk factors are discussed in greater detail in Section 13 – “Risk Factors” in the Company’s Management’s Discussion and Analysis for the fiscal quarter ended March 31, 2024 and Aecon’s 2023 Management’s Discussion and Analysis for the fiscal year ended December 31, 2023 filed on SEDAR+ (www.sedarplus.ca). 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.

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