Canadian construction firm Aecon Group Inc (TSE:ARE, Mkt cap 881.26M, P/E 16.93, Div/yield 0.12/3.21, EPS 0.85, Shares 57.45M) said on Tuesday that it has been awarded two recurring revenue contracts with oil and gas companies in Western Canada.
The deals include a Master Turnaround Agreement (MTA) with Spectra Energy which covers planning, construction equipment, labour, materials and supplies related to shutdown services on natural gas processing facilities in British Columbia. Work commenced in the fourth quarter of 2016 and is planned to be carried out over a five-year period.
The second contract is a Multiple Use Agreement (MUA) with an undisclosed major oil producer in Alberta, covering the period from the fourth quarter of 2016 through to December 31, 2020. The work involves reclamation, overburden removal, mine support services and civil construction activities at all of the producer’s sites in the Alberta oil sands.
Aecon reported a backlog of C$4,551m as of September 30, 2016. Recurring revenue, including these two new contracts, is not included in the backlog.
Welcoming the new contracts, Aecon’s president and CEO, John M. Beck, said: “These recurring revenue agreements provide a predictable revenue stream and added stability for both our Energy and Mining segments. Our continued partnerships with our valued clients are a testament to our reputation as being a trusted, partner-of-choice in an increasingly competitive market in Western Canada.”
On Monday, Aecon announced that Terrance McKibbon was stepping down as president and CEO with immediate effect. McKibbon had held the top position since June 2014, having previously served as chief operating officer.
Beck, the company’s executive chairman, was CEO until June 2014 and has resumed his role as CEO on an interim basis, with Brian V. Tobin becoming independent chairman.
Aecon Group Inc. (TSE: ARE) is a Toronto based construction and infrastructure development company. The Company operates through four segments: Infrastructure, Energy, Mining and Concessions. The Infrastructure segment includes all aspects of the construction of both public and private infrastructure in Canada, and on a selected basis, internationally. The Energy segment encompasses a suite of service offerings to the energy sector, including industrial, construction and manufacturing activities, such as in-plant construction, site construction and module assembly. The Mining segment offers services consolidating its mining capabilities and services across Canada, including both mine site installations and contract mining. This segment focuses on delivering construction services. The Concessions segment includes development, financing, construction and operation of infrastructure projects by way of build-operate-transfer, build-own-operate-transfer and other public-private partnership contract structures. More from Reuters »
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