North American Construction Group (NOA) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 results with combined revenue up to $367.2M, a 34%–46% year-over-year increase, driven by the MacKellar Group acquisition and strong Australian operations.

• Adjusted EBITDA reached $106.4M (29.0% margin), more than 75% higher year-over-year, reflecting operational improvements and diversification.

• Net income was $13.9M, with adjusted EPS of $1.17, up 117% year-over-year.

• Free cash flow for Q3 was $10.8M–$11M, with over $55M generated before working capital changes.

• Announced a 20% dividend increase and a new normal course issuer bid, reflecting a focus on shareholder returns.

Financial highlights

• Combined gross profit margin was 21.9%, up from 13.8% last year, reflecting operational excellence.

• Adjusted EBITDA margin improved to 29.0% from 21.6% year-over-year.

• Net debt ended at $882.5M, with leverage ratios of 2.3x net debt/EBITDA and 1.8x senior secured debt/EBITDA.

• Free cash flow conversion expected at 30–35%, with Australia above 40% and Canada at 30%.

• Adjusted EPS for the quarter was $1.17, impacted by higher acquisition-related interest.

Outlook and guidance

• 2024 guidance reaffirmed: combined revenue $1.4B–$1.5B, adjusted EBITDA $395M–$415M, adjusted EPS $3.95–$4.15, free cash flow $100M–$120M, growth capital $85M–$95M, sustaining capital $150M–$170M, net debt leverage targeted at 2.1x.

• Year-end backlog expected to remain above $3B, with increasing geographic and resource diversification.

• 2025 guidance to be provided after finalizing oil sands contracts; anticipate similar earnings breakdown with Australia contributing over half.