Latest news with #oilandsands
Yahoo
18-05-2025
- Business
- Yahoo
North American Construction Group Ltd (NOA) Q1 2025 Earnings Call Highlights: Record Revenue ...
Release Date: May 15, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. North American Construction Group Ltd (NYSE:NOA) achieved a record trailing 12-month combined revenue of $1.5 billion, indicating strong financial performance. The company expanded its heavy equipment fleet in Australia by over 10%, enhancing capacity to meet growing demand. In Canada's oil sands, NOA achieved a 60% equipment utilization rate, with February peaking at 70%, reflecting operational efficiency. The Fargo project surpassed 65% completion, with final construction underway, showcasing progress in key projects. NOA maintained administrative costs at 3.9%, meeting internal targets and demonstrating disciplined management. Weather conditions negatively impacted earnings, with a 5-7% reduction in gross margins due to rain in Australia and extreme cold in Canada. The Australian operations faced poor equipment utilization due to consistent rain, particularly affecting the Carmichael mine. High early component failures in Canada impacted gross profit margins, although measures are being taken to address this. The company experienced increased depreciation costs due to high idle hours in Canada, affecting earnings per share. NOA's net debt levels increased by $11 million in the quarter, partly due to free cash flow usage and growth spending. Warning! GuruFocus has detected 3 Warning Signs with NOA. Q: Can you provide insights on how Q2 might trend compared to Q1 in terms of top line and EBITDA? A: (Unidentified_3) We expect the top line and EBITDA to remain consistent with Q1. Although the oil sands are seasonally slower, the impact is less significant due to our diversified business. We anticipate a slight increase in EPS for Q2 due to lower depreciation. Q: Could you elaborate on the large infrastructure bidding opportunities in the US and Canada? A: (Unidentified_2) We are seeing a significant increase in P3 projects in the US, particularly around energy transition and climate resiliency. These include pumped hydro projects, dam constructions, and water retention projects. We have a strong leader for our infrastructure business starting in July, and we view these as lower-risk opportunities. Q: What was the financial impact of the rainy weather in Australia during Q1? A: (Unidentified_3) The weather impacted our gross profit margin in Australia by about 5 to 7%. Normally, Australia operates at a 25% gross profit margin, but it came in at 16-17% due to the weather. Q: How do you address investor concerns about management's ability to execute given repeated weather-related issues? A: (Unidentified_2) Our goal is to deliver on our guidance despite weather challenges. We aim to meet or exceed our internal expectations and market guidance, and we are committed to achieving our yearly targets. Q: Can you provide an update on the technician count and its impact on utilization targets in Canada and Australia? A: (Unidentified_2) Skilled trades are a global issue, but we have managed well in Australia and Canada. We have systems and processes in place to attract and retain skilled labor, and we are confident in reaching our utilization targets. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
Globe and Mail
16-05-2025
- Business
- Globe and Mail
Canadian oil producer Strathcona to launch $5.93-billion hostile bid for MEG Energy
Canadian oil and gas producer Strathcona SCR-T said late Thursday it plans to launch a $5.93-billion hostile takeover bid for rival MEG Energy MEG-T, aiming to create one of the country's largest oil sands companies. The all-cash-and-stock unsolicited offer would combine two of Canada's largest pure-play thermal oil sands operators, and make Strathcona Canada's fifth-largest oil producer. Strathcona said it first made an offer to MEG's board on April 28, but was turned down on May 13. Strathcona has already built a nearly 9 per cent stake in MEG through market purchases earlier this year. It said it plans to formally file its offer in the next two weeks and is still open to talks with MEG's board. MEG did not immediately respond to a request for comment. Strathcona is offering 0.62 of its share and $4.10 in cash for each MEG share, valuing the bid at $23.27 per share – a 9.3 per cent premium to MEG's last closing price. The company said it would fund the cash portion of the deal through a bridge loan from lenders. Strathcona's main stakeholder, Waterous Energy Fund, which owns nearly 80 per cent of the company's shares, plans to increase its investment. If the deal goes through, MEG shareholders would own 37.8 per cent of the combined company. Waterous would hold just over half, including the new shares. Strathcona said it was targeting $175-million in annual cost savings, including lower spending on operations, capital, and interest. Strathcona's bid also comes after it recently sold its Montney assets for about $2.84-billion and bought the Hardisty Rail Terminal to focus on core heavy oil operation.
