Aecon reports year-end 2024 results

TORONTO, March 05, 2025 (GLOBE NEWSWIRE) -- Aecon Group Inc. (TSX: ARE) (“Aecon” or the “Company”) today reported results for the fourth quarter and year-end 2024 including full year revenue of $4.2 billion and backlog of $6.7 billion at December 31, 2024.

“Driven by robust year-end backlog, significant new contract awards, contributions from strategic acquisitions, solid recurring revenue, and a strong bid pipeline, revenue in 2025 is expected to be stronger than 2024,” said Jean-Louis Servranckx, President and Chief Executive Officer, Aecon Group Inc. “Aecon is actively engaged in delivering several major long-term projects under more collaborative models and is focused on advancing them to the construction phase in 2025 and 2026. Aecon will maintain a disciplined capital allocation approach and remains focused on strategic investments in its operations to support access to new markets.”

HIGHLIGHTS

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

• Revenue for the year ended December 31, 2024 of $4,243 million was $401 million, or 9%, lower compared to 2023. The lower revenue was primarily driven by decreased activity on mainline pipeline work in industrial operations following the achievement of substantial completion on a large project in 2023, and in urban transportation solutions from a decrease in light rail transit (“LRT”) work as three LRT projects near completion.
• Operating loss of $60.1 million (operating margin⁽⁴⁾ of -1.4%) compared to operating profit of $240.9 million in 2023 (operating margin of 5.2%). Lower year-over-year operating profit was driven by a decrease in other income of $186.2 million primarily due to a lower year-over-year gain related to the sale of a 49.9% interest in the Bermuda International Airport concessionaire (“Skyport”) of $133.1 million and a lower gain on the sale of Aecon Transportation East (“ATE”) of $27.5 million. In addition, lower gross profit of $73.1 million contributed to the year-over-year decrease in operating profit. This decrease was primarily due to lower gross profit related to the four fixed price legacy projects of $57.6 million from negative gross profit in 2024 of $272.8 million compared to negative gross profit in 2023 of $215.2 million. These four fixed price legacy projects are discussed in Section 5 “Recent Developments”, Section 10.2 “Contingencies”, and Section 13 “Risk Factors” in the Company’s December 31, 2024 Management’s Discussions and Analysis (“MD&A”).
• Adjusted EBITDA⁽¹⁾⁽²⁾ of $82.6 million for the year ended December 31, 2024 (Adjusted EBITDA margin⁽³⁾ of 1.9%) compared to Adjusted EBITDA of $143.4 million (Adjusted EBITDA margin of 3.1%) in 2023.
• Loss attributable to shareholders of $59.5 million (diluted loss per share of $0.95) for the year ended December 31, 2024 compared to profit attributable to shareholders of $161.9 million (diluted earnings per share of $2.10) in 2023.
• Adjusted loss attributable to shareholders⁽¹⁾⁽²⁾ of $61.6 million (diluted adjusted loss per share⁽¹⁾⁽²⁾ of $0.99) for the year ended December 31, 2024 compared to adjusted profit attributable to shareholders⁽¹⁾⁽²⁾ of $160.9 million (diluted adjusted earnings per share⁽¹⁾⁽²⁾ of $2.09) in 2023.
• Reported backlog at December 31, 2024 of $6,662 million compared to backlog of $6,157 million at December 31, 2023. New contract awards of $4,747 million were booked in 2024 compared to $4,505 million in 2023.
• On December 2, 2024, Aecon’s subsidiary, Aecon Utilities Group Inc., acquired Ainsworth Power Construction, an electrical services and power systems business unit of Ainsworth Inc.
• On December 17, 2024, Aecon closed the previously disclosed acquisition of United Engineers & Constructors (“United”).
• On December 23, 2024, Aecon’s common shares were added to the S&P/TSX Composite Index – the principal benchmark for Canadian equity markets which includes the largest and most liquid publicly traded companies in Canada.
• Subsequent to year-end:
  • An Aecon joint operation was awarded a collaborative contract by Ontario Power Generation which includes the definition phase work for the retube, feeder and boiler replacement of Units 5, 6, 7 and 8 at the Pickering Nuclear Generating Station in Ontario. Aecon holds a 50% interest in the joint operation and its share of the approximately $1.1 billion early works portion of the contract was added to its Construction segment backlog in the fourth quarter of 2024. The remaining portion of the contract is valued at approximately $1 billion, and Aecon will add its share to backlog in the first quarter of 2025.
  • An Aecon-led consortium completed the collaborative development phase and reached commercial close on the Scarborough Subway Extension Stations, Rail and Systems progressive design-build transit project. Aecon’s share of the target price contract is valued at over $2.8 billion and will be added to its backlog in the first quarter of 2025.

CONSOLIDATED FINANCIAL HIGHLIGHTS⁽¹⁾

(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 year ended December 31, 2024 of $4,243 million was $401 million, or 9%, lower compared to 2023. Revenue was lower in the Construction segment ($352 million) driven by lower revenue in industrial ($460 million), urban transportation solutions ($198 million), and civil operations ($14 million), partially offset by higher revenue in nuclear ($282 million) and utilities operations ($38 million). This lower revenue was primarily driven by decreased activity on mainline pipeline work in industrial operations following the achievement of substantial completion on a large project in 2023, and in urban transportation solutions from a decrease in LRT work as three LRT projects near completion. In the Concessions segment, revenue was $61 million lower in 2024 compared to the prior year primarily due to the use of the equity method of accounting in 2024 for Aecon’s 50.1% retained interest in Skyport following the sale of a 49.9% interest in Skyport in the third quarter of 2023. These amounts were partially offset by higher revenue in Corporate and Other after inter-segment revenue eliminations ($12 million).

Operating loss of $60.1 million for the year ended December 31, 2024 compares to operating profit of $240.9 million for the year ended December 31, 2023, a decrease of $301.0 million.

Lower year-over-year operating profit was driven by a decrease in other income of $186.2 million. This decrease was primarily due to a lower year-over-year gain related to the sale of a 49.9% interest in Skyport of $133.1 million (a gain of $5.9 million from incremental proceeds in 2024 compared to a gain on sale of $139.0 million in 2023) and a lower gain on the sale of ATE of $27.5 million (a gain of $9.0 million from incremental proceeds in 2024 compared to a gain on sale of $36.5 million in 2023). Also contributing to the decrease in other income were lower gains on the sale of property, buildings, and equipment of $27.7 million and a lower fair value remeasurement gain on financial instruments of $0.2 million, partially offset by higher foreign exchange gains of $2.3 million.

In addition to the above noted decrease in other income, lower gross profit of $73.1 million also contributed to the year-over-year decrease in operating profit. In the Construction segment, gross profit decreased by $49.8 million. This decrease was primarily due to lower gross profit related to the four fixed price legacy projects of $57.6 million from negative gross profit in 2024 of $272.8 million compared to negative gross profit in 2023 of $215.2 million. These four fixed price legacy projects are discussed in Section 5 “Recent Developments”, Section 10.2 “Contingencies”, and Section 13 “Risk Factors” in the Company’s December 31, 2024 MD&A. Partially offsetting the impact of these four fixed price legacy projects in 2024 was higher gross profit in the balance of the Construction segment of $7.8 million, driven by higher volume and gross profit margin in nuclear and utilities operations, as well as higher gross profit in industrial operations, partially offset by lower gross profit margin in civil operations and a volume driven decrease in gross profit in urban transportation solutions. In the Concessions segment, gross profit in 2024 decreased by $33.9 million compared to 2023 primarily from the use of the equity method of accounting in 2024 for Aecon’s 50.1% retained interest in Skyport following the sale of a 49.9% interest in this project in the third quarter of 2023, while in Corporate and Other, gross profit increased by $10.7 million as a result of higher inter-segment cost recoveries from projects.

Marketing, general and administrative expense (“MG&A”) increased in 2024 by $35.4 million compared to 2023. The increase in MG&A was primarily due to higher personnel costs reflecting more typical levels in MG&A, ongoing investments to support growth and acquisitions, particularly in utilities operations with the expansion of its U.S. operations and the Xtreme Powerline Construction (“Xtreme”) acquisition in 2024, and from higher acquisition related transaction costs in 2024 ($9.9 million). This higher MG&A in 2024, was partially offset by lower MG&A related to the ATE operations which was sold in the second quarter of 2023 ($5.9 million). MG&A as a percentage of revenue increased from 3.8% in 2023 to 5.0% in 2024.

Reported backlog at December 31, 2024 of $6,662 million compares to backlog of $6,157 million at December 31, 2023. New contract awards of $4,747 million were booked in 2024 compared to $4,505 million in 2023. The reported 2024 awards include $275 million of backlog acquired at the time the acquisitions of United, Ainsworth Power Construction, and Xtreme closed.

REPORTING SEGMENTS

Aecon reports its financial performance on the basis of two segments: Construction and Concessions, which are described in the Company’s December 31, 2024 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.

For the year ended December 31, 2024, revenue in the Construction segment of $4,221 million was $352 million, or 8%, lower than in 2023. The largest decrease in revenue occurred in industrial ($460 million) driven by decreased activity on mainline pipeline work following the achievement of substantial completion on a large project in the third quarter of 2023, partially offset by a higher volume of field construction work at wastewater treatment and industrial facilities in western Canada in 2024, in urban transportation solutions ($198 million) primarily from a decrease in LRT work in Ontario and Québec as three LRT projects near completion, and in civil operations ($14 million) largely from a decrease in road building construction work in eastern Canada after the sale of ATE in the second quarter of 2023 of $51 million, partially offset in the balance of civil operations by an increase in roadbuilding construction work in western Canada. These decreases were partially offset by higher revenue in nuclear ($282 million) driven by an increased volume of refurbishment work at nuclear generating stations located in Ontario and the U.S., and in utilities operations ($38 million) primarily from an increased volume of electrical transmission work in the U.S. and an increase in battery energy storage system work, partially offset by a decreased volume of telecommunications and gas distribution work.

Operating loss in the Construction segment of $55.0 million in 2024 compares to an operating profit of $59.0 million in 2023 for a year-over-year decrease of $114.0 million. The largest driver of the decrease in operating profit was negative gross profit from the four fixed price legacy projects of $272.8 million in 2024 compared to negative gross profit of $215.2 million in 2023 for a net negative year-over-year impact on operating profit of $57.6 million. The four fixed price legacy projects are discussed in Section 5 “Recent Developments”, Section 10.2 “Contingencies”, and Section 13 “Risk Factors” in the December 31, 2024 MD&A. In the balance of the Construction segment, operating profit was lower by $56.4 million of which $31.6 million was largely in civil operations and urban transportation solutions, and partially offset by higher operating profit in nuclear operations from higher volume and gross profit margin, and in industrial due to higher gross profit margin. Other items contributing to the reduction in operating profit include an increase in acquisition-related transaction costs that were expensed in the year ($9.9 million largely in utilities), an increase in amortization expense related to acquisition-related intangible assets from the Xtreme, Ainsworth Power Construction, and United transactions in 2024 of $5.3 million and a decrease in other income of $9.6 million, driven by lower gains on the sale of property, buildings, and equipment of $10.9 million, primarily in utilities operations.

Construction segment backlog at December 31, 2024 was $6,551 million, which was $498 million higher than the same time last year. Backlog increased year-over-year in nuclear operations ($493 million), industrial operations ($83 million), and urban transportation solutions ($139 million), and decreased in civil ($146 million) and utilities operations ($71 million). New contract awards in 2024 totaled $4,718 million compared to $4,428 million in 2023. The reported awards in 2024 include backlog of $275 million acquired at the time the acquisitions of United, Ainsworth Power Construction, and Xtreme closed. In 2024, joint operations in which Aecon is a participant were awarded the contracts to replace steam generators at three units at Bruce Nuclear Generating Station in Ontario, and a contract for the definition phase of refurbishment work at four units at the Pickering Nuclear Generating Station in Ontario. As well, a consortium, of which Aecon is a participant, was awarded a contract to design and build the Surrey Langley SkyTrain Stations project in British Columbia.

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 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 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 year ended December 31, 2024, revenue in the Concessions segment of $12 million was $61 million lower than in 2023. The decrease was primarily due to lower reported revenue from Skyport as a result of the commencement of the equity method of accounting for the Company’s retained 50.1% interest in Skyport 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 $24.2 million for the year ended December 31, 2024 decreased by $149.9 million compared to an operating profit of $174.1 million in 2023. The lower operating profit was primarily due to gains related to a sale in the third quarter of 2023 of a 49.9% interest in the Bermuda International Airport concessionaire which resulted in a year-over-year decrease in gains on sale of $133.1 million. In the balance of the Concessions segment, operating profit in 2024 decreased by $16.9 million. Year-over-year reported operating profit from the ongoing operations at Skyport was negatively impacted by a 49.9% reduction in Aecon’s ownership interest in Skyport and from the use of the equity method of accounting in 2024 where operating results for Aecon’s interest in Skyport are reported net of financing costs and income taxes. These unfavourable impacts were partially offset by one-time recoveries in Skyport in 2024 of $5.9 million.

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.

DIVIDEND

Aecon 's Board of Directors approved the quarterly dividend of 19 cents per share. The dividend will be paid on April 2, 2025, to shareholders of record on March 21, 2025. Unless indicated otherwise, all common share dividends paid by Aecon to shareholders are designated as “eligible” dividends for the purpose of the Income Tax Act (Canada) and any similar provincial legislation.

OUTLOOK

Revenue in 2025 is expected to be stronger than 2024 due to an opening backlog of $6.7 billion combined with recent new awards in the first quarter, the impact of business acquisitions completed in the second half of 2024, solid recurring revenue, and a strong bid pipeline. Revenue growth is expected in most of the Construction sectors, as progressive design-build or alliance model projects move into the construction phase in 2025 and 2026.

In the Construction segment, demand for Aecon’s services across Canada, as well as increasingly in select U.S. and international markets, continues to be strong. Development phase work is ongoing in consortiums in which Aecon is a participant to deliver several significant long-term progressive design-build projects of various sizes. In the first quarter of 2025, an Aecon-led consortium completed the collaborative development phase and reached commercial close on the Scarborough Subway Extension progressive design-build transit project. The implementation phase of the project will now commence under a target price contract. Aecon’s share of the contract is valued at $2.8 billion and will be added to its Construction segment backlog in the first quarter of 2025 and will no longer be in recurring revenue. As well, other projects currently being delivered using progressive design-build or alliance models and projects are also expected to move into construction in 2025 and 2026. In addition, Aecon and its consortium partner were recently awarded a collaborative contract by Ontario Power Generation which includes the definition phase work for the retube, feeder and boiler replacement of Units 5, 6, 7 and 8 at the Pickering Nuclear Generating Station in Ontario. Aecon holds a 50% interest in this joint operation and its share of the approximately $1.1 billion early works portion of the contract was added to its Construction segment backlog in the fourth quarter of 2024. The remaining portion of the contract is valued at approximately $1 billion, and Aecon will add its share to backlog in the first quarter of 2025.

In the Concessions segment, there are several 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. An Aecon-led consortium that 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 is expected to reach financial close in 2025.

Results in recent years were negatively impacted by the four legacy projects, however, the recent Coastal GasLink Pipeline settlement along with the additional write-downs on the fixed price legacy projects in 2024 are anticipated to lead to improved profitability and margin predictability, especially as the remaining three projects move closer to substantial completion. Until the remaining three projects are complete and the related claims have been resolved, there is a risk that this could also occur in future periods – see Section 5 “Recent Developments”, Section 10.2 “Contingencies”, and Section 13 “Risk Factors” in the December 31, 2024 MD&A regarding the risk on certain large fixed price legacy projects entered into in 2018 or earlier by joint operations in which Aecon is a participant. As such, the completion and satisfactory resolution of claims on the remaining three legacy projects with the respective clients remains a critical focus for the Company and its partners. Management will also be monitoring the impact of announced or threatened tariffs or non-tariff measures on the Company’s operations. The introduction of these measures could cause increased purchased material costs and/or reduced availability.

Aecon plans to maintain a disciplined capital allocation approach focused on long-term shareholder value through acquisitions and divestitures, organic growth, dividends, capital investments, and common share buybacks on an opportunistic basis. Aecon is also focused on making strategic investments in its operations to support access and entry into new markets and increase operational effectiveness.

Capital expenditures in 2025 are expected to be modestly higher than in 2024. The Company has no debt or working capital credit facility maturities until 2027, except equipment loans and leases in the normal course.

CONSOLIDATED RESULTS

The consolidated results for the three months and years ended December 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, March 6, 2025. 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 fourth quarter and year-end 2024 financial results will also be available after market close on March 5, 2025 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 2025 ANNUAL MEETING OF SHAREHOLDERS

Aecon’s Annual Meeting of Shareholders will be held on Tuesday, June 3, 2025. 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 IFRS Accounting Standards). 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 and ratios 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, costs related to business acquisitions including: costs related to advisory, legal and other transaction fees; changes in the fair value of contingent consideration; and contingent consideration classified as compensation per IFRS; costs associated with the remediation of properties sold; 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). The most directly comparable measure calculated in accordance with IFRS is operating profit.
  

• “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).
  

• “Adjusted Profit (Loss) Attributable To Shareholders” represents profit (loss) attributable to shareholders adjusted where applicable to exclude unrealized gains or losses on derivative financial instruments, costs related to business acquisitions including: amortization of acquisition-related intangible assets; costs related to advisory, legal and other transaction fees; changes in the fair value of contingent consideration; and contingent consideration classified as compensation per IFRS; costs associated with the remediation of properties sold; and where applicable the income tax effect of these adjustments (refer to the “Reconciliations and Calculations” section of this press release for a quantitative reconciliation to the most comparable financial measure). The most comparable IFRS measures for Adjusted Profit (Loss) Attributable to Shareholders is Profit (Loss) Attributable To Shareholders.
  

• “Adjusted Earnings Per Share – Basic” and “Adjusted Earnings Per Share – Diluted” are calculated by dividing Adjusted Profit (Loss) Attributable To Shareholders (defined above) by the basic and diluted weighted average number of shares outstanding, respectively. The most comparable IFRS measure for Adjusted Earnings Per Share is earnings per share (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. These non-GAAP financial measures exclude items which management believes will allow investors a consistent way to analyze Aecon’s financial performance, allow for better analysis of core operating income and business trends, and improve comparability of companies within the industry.

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 and operating profit that can be used to calculate 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 and years ended December 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.
(2) Costs related to business acquisitions includes costs related to advisory, legal and other transaction fees; changes in the fair value of contingent consideration; and contingent consideration classified as compensation per IFRS.

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

(1) Refer to Note 12 “Projects Accounted for Using the Equity Method” in the Company’s audited consolidated financial statements for the year ended December 31, 2024.
(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.

Set out below is the calculation of Adjusted Profit (Loss) Attributable to Shareholders and Adjusted Earnings (Loss) per Share for the three months and years ended December 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.
(2) Costs related to business acquisitions includes costs related to advisory, legal and other transaction fees; changes in the fair value of contingent consideration; and contingent consideration classified as compensation per IFRS.

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 financial risks and impact of the fixed price legacy projects and the 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 December 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 revenue and future revenue growth and the impact therefrom; expectations regarding profitability and margin predictability; expectations regarding capital expenditures; expectations regarding the pipeline of opportunities available to Aecon; statements regarding the various phases of projects for Aecon and expectations regarding project timelines; its strategic focus on projects linked to decarbonization, energy transition and sustainability, and the opportunities arising therefrom; communities sharing in the benefits and opportunities associated with Aecon’s work, including commitments to publish information with respect to reconciliation and targets including Indigenous suppliers; expectations regarding access to new markets through strategic investments; expectations regarding opportunities to add to the existing portfolio of Canadian and international concessions in the next 12 to 24 months; expectations regarding growth, and the acceleration thereof, of Aecon in Canada and the U.S.; ; and the effective transition and collaboration with United and United management. Forward-looking statements may in some cases be identified by words such as “will,” “plans,” “schedule,” “forecast,” “outlook,” “completing,” “mitigating,” “potential,” “possible,” “maintain,” “seek,” “cost savings,” “synergies,” “strategy,” “goal,” “indicative,” “may,” “could,” “might,” “can,” "believes, " "expects, " "anticipates, " “aims,” “assumes,” “upon,” “commences,” "estimates, " "projects, " "intends, " “prospects,” “targets,” “occur,” “continue,” "should " or the negative of these terms, 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 margins; the risk of not being able to meet contractual schedules and other performance requirements on large, fixed priced contracts; the risks associated with a third party’s failure to perform; the risk of not being able to meet its labour needs at reasonable costs; possibility of gaps in insurance coverage; 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 risks associated with international operations and foreign jurisdiction factors; the risk of not being able, through its joint ventures or joint operations, 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 identify and capitalize on strategic operational investments; 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, Board diversity or Indigenous supplier targets; the risks of nuclear liability; the risks of cyber interruption or failure of information systems; 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 opportunities presented by a transition to a net-zero economy; the risk the increase in energy demand does not continue; risks associated with future pandemics, epidemics and other health crises and Aecon’s ability to respond to and implement measures to mitigate the impact of such pandemics or epidemics; the risk that the strategic partnership with Oaktree will not realize the expected results and may negatively impact the existing business of Aecon Utilities; the risk that Aecon Utilities will not realize opportunities to expand its geographic reach and range of services in the U.S; the risk of costs or difficulties related to the integration of Aecon and United, and of Aecon Utilities and Xtreme, being greater than expected; the risk of the anticipated benefits and synergies from the United and Xtreme transactions not being fully realized or taking longer than expected to realize; the risk of being unable to retain key personnel, including management of United and Xtreme; the risk of being unable to maintain relationships with customers, suppliers or other business partners of United and Xtreme; and various other risk factors described in Aecon’s filings with the securities regulatory authorities, which are available under Aecon’s profile on SEDAR+ (www.sedarplus.ca), including the risk factors described in Section 13 - “Risk Factors” in Aecon 's 2024 Management’s Discussion and Analysis for the fiscal year ended December 31, 2024 and in other filings made by Aecon with the securities regulatory authorities in Canada.

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 and assumptions regarding the outcome of the outstanding claims in respect of the fixed price legacy projects being performed by joint ventures in which Aecon is a participant. 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.

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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