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North American Construction Group Ltd. (NACG) is a leading provider of heavy civil construction and mining services, operating primarily in the Canadian oil sands. With over 60 years of industry experience, NACG has developed an extensive skill set and resource base capable of supporting both mining and 'in situ' oil sands projects. The company also boasts one of the largest equipment fleets in the oil sands, ensuring it can meet the diverse needs of its clients.
Operating across Canada, the United States, and Australia, NACG's business segments include Heavy Equipment - Canada, Heavy Equipment - Australia, and Other services like mine management and external maintenance programs. The company's recent achievements include the successful acquisition of MacKellar Group, an Australian company specializing in heavy earthmoving equipment, significantly expanding NACG's geographical footprint and operational capabilities.
Core Business and Services:
- Mining Services: Comprehensive support for resource development projects, including both open-pit and underground mining.
- Heavy Civil Construction: Infrastructure development for industrial construction sectors.
- Equipment Maintenance and Rebuild Programs: Ensuring optimal performance and longevity of heavy machinery.
In the latest financial quarter (ending September 30, 2023), NACG reported revenues of $194.7 million, a slight increase from the previous year. The company's heavy equipment fleet and projects like the Fargo-Moorhead flood diversion contributed significantly to these figures. Adjusted EBITDA stood at $59.4 million, reflecting consistent operational efficiency despite challenges from wildfires in Northern Canada and other external factors.
NACG's outlook for 2024 remains positive, bolstered by the successful integration of MacKellar's operations. The company expects free cash flows between $160 to $185 million, driven by its diversified portfolio and robust contract pipeline. Financial stability is further supported by a strong liquidity position, with $154.2 million in available capital liquidity as of September 30, 2023.
Overall, NACG continues to demonstrate resilience and growth, leveraging its extensive experience, diverse service offerings, and strategic acquisitions to maintain its position as a premier provider in the heavy civil and mining sectors.
North American Construction Group (NOA) has successfully completed the redemption of its 5.5% Convertible Debentures originally due June 30, 2028. The redemption process was finalized on February 28, 2025, following a notice issued to debenture holders on January 29, 2025.
Debenture holders were given the option to either convert their holdings into common shares at $24.23 per share or receive the principal amount plus accrued interest. Of the total debentures, $72,749,000 in principal amount was converted to common shares, while the remaining $1,357,000 was redeemed by the company on the redemption date.
North American Construction Group (NOA) has announced its regular quarterly dividend payment. The company's Board of Directors has declared a dividend of $0.12 CAD per common share. The dividend will be distributed to shareholders who are on record as of March 13, 2025, with the payment scheduled for April 9, 2025. The company has confirmed that this dividend qualifies as an eligible dividend for Canadian income tax purposes.
North American Construction Group (NOA) has announced its upcoming fourth quarter 2024 financial results release and conference call schedule. The company will release its Q4 2024 results on Wednesday, March 5, 2025 after market close, followed by a conference call and webcast on Thursday, March 6, 2025 at 7:00 a.m. Mountain Time (9:00 a.m. Eastern Time).
The conference call will be accessible via toll-free number 1-800-717-1738 with Conference ID 71653. A replay will be available until April 6, 2025, through 1-888-660-6264. The presentation slide deck will be available for download before the call on the company's website.
North American Construction Group (NOA) has announced the early redemption of its 5.5% convertible unsecured subordinated debentures, originally due June 30, 2028. The redemption will be effective February 28, 2025. Debenture holders have the option to convert their holdings into common shares at $24.23 per share, representing a discount to the current share price of $28.45 as of January 29, 2025.
The total outstanding debentures amount to $74,106,000. Each debenture holder will receive a total payment of $1,008.86111, comprising $1,000 principal and $8.86111 in accrued interest from December 31, 2024. The company plans to make the redemption payment in cash and intends to delist the debentures from the Toronto Stock Exchange following redemption, subject to regulatory approval.
North American Construction Group (NOA) has announced entering into an automatic share purchase plan (ASPP) with its designated broker, connected to its previously announced normal course issuer bid (NCIB). The ASPP allows the broker to purchase up to 2,087,577 common shares for cancellation until November 3, 2025.
The purchases will be executed through the TSX, NYSE, and alternative trading systems in Canada and the United States. The ASPP becomes effective January 9, 2025, and will terminate when either the NCIB expires, the maximum shares are purchased, or the Company terminates the plan. The NCIB, which began on November 4, 2024, allows purchases based on management's discretion outside of the ASPP, complying with TSX rules and securities laws.
North American Construction Group (NOA) announced that its MacKellar Group subsidiary has secured a contract worth approximately $100 million from a major copper producer in New South Wales, Australia. The project involves site infrastructure establishment, initial overburden removal, and closure of a reclamation facility at an operational 24/7 copper mine. Starting in Q1 2025 and scheduled for completion in Q2 2026, the project will utilize existing owned and leased fleet, primarily equipment transported from Canada. This contract represents MacKellar's entry into the New South Wales region and aligns with the company's geographic and customer diversification strategy. The project was already included in the company's 2025 outlook as unsecured work, bringing the combined revenue visibility to over 90% of the midpoint for 2025.
North American Construction Group (NOA) has secured an extended regional services contract with a major oil sands producer, effective January 2025 through January 2029. The contract includes $500 million in committed spending, primarily for heavy equipment rentals and earthwork scopes.
The company provided outlook for 2025, projecting combined revenue of $1.4-1.6 billion and adjusted EBITDA of $415-445 million. For Q4 2024, NOA estimates revenue of $350-375 million and adjusted EBITDA of $100-110 million. The company aims to achieve a net debt leverage target of 1.8x by end of 2025, with projected free cash flow of $130-150 million for 2025.
North American Construction Group (NOA) announced that Mikisew North American Partnership has been awarded a $125 million heavy civil construction contract in the oil sands region. The two-year project involves building large diversion ditches to redirect water from upstream catchments away from active mining areas. The project will begin in January 2025 with completion expected in October 2026. Located at one of the leading mines in the Fort McMurray region, this infrastructure project reinforces NACG's strategic partnership with the client and leverages existing infrastructure synergies on site.
North American Construction Group (NOA) has announced plans to initiate a normal course issuer bid (NCIB) to repurchase and cancel up to 2,087,577 common shares, representing 10% of the public float and 7.5% of outstanding shares. The company will purchase a maximum of 1,391,364 shares through NYSE and alternative trading systems. The NCIB is scheduled to run from November 4, 2024, to November 3, 2025. NOA believes its shares are undervalued and views the repurchase as an effective use of cash resources that would enhance shareholder liquidity and increase proportionate interests of remaining shareholders.
North American Construction Group (NOA) reported strong Q3 2024 results with combined revenue of $367.2 million, up from $274.8 million year-over-year. The company achieved an Adjusted EBITDA of $106.4 million with a 29.0% margin, significantly improving from $59.4 million and 21.6% in Q3 2023. The Australian operations through MacKellar Group showed strong performance with 84% equipment utilization. The Board declared a quarterly dividend increase of 20% to $0.12 per share. Notable achievements include signing a $375 million five-year contract in Queensland and surpassing 50% completion of the Fargo-Moorhead flood diversion project.
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