MONTREAL – AtkinsRéalis Group Inc.’s nuclear business drove growth in earnings and backlog in its latest quarter, as the engineering firm continues to capitalize on the global energy transition.
The nuclear division’s revenues leapt 41 per cent year-over-year to $358 million in the quarter ended June 30, while its order book ballooned 57 per cent to $1.75 billion, helping to push the company’s total backlog to a record high.
The performance also brightened the Montreal-based company’s financial forecast for the year. AtkinsRéalis raised its outlook for year-over-year nuclear organic revenue growth to between 30 and 35 per cent from 15 to 20 per cent. However, it also predicted a slightly slimmer adjusted earnings margin for the segment, citing the “business mix” for 2024.
“Our nuclear business really is going strength to strength. Governments around the world, clients, utilities, they’re all beginning to realize that … a net-zero electrical energy grid — it has to have a component of nuclear for that baseload power,” chief executive Ian Edwards said.
Contracts with Atkins subsidiary Candu Energy have driven short-term backlog growth. The company, which owns the intellectual property rights to the Candu nuclear technology, recently secured new contracts to extend the life of a Romanian nuclear reactor and, last quarter, to refurbish the Qinshan nuclear plant southwest of Shanghai.
Candu Energy is also in talks for life extension work at Ontario’s Pickering nuclear power station, Edwards said.
“We’re in negotiation for other life extensions across the world, because it’s a really cheap form of electricity. You just replace the reactor components and give it an extra 30 years of life. So economically, it’s almost a no-brainer,” he told analysts on a conference call Friday.
Meanwhile, revenue from Atkins’ engineering services segment rose 12 per cent year-over-year to $2.3 billion in the second quarter.
Contract wins in Canada helped boost the overall backlog 24 per cent to a record $15.89 billion. Atkins won the bid to design a new bridge linking Quebec City to the Île d’Orléans as part of a $2.9-billion provincial undertaking. It also snagged a contract for the $304-million redevelopment of a B.C. ferry terminal used by passengers travelling between Victoria and the U.S.
South of the border, Atkins won an engineering contract for an interstate highway interchange project in Florida as the company pursues a “land-and-expand” strategy in the U.S.
“It’s really about decaying infrastructure that needs replacement,” Edwards said.
“The great thing about the U.S. market is that it’s very fragmented, a lot of small players, a lot of medium-sized players in the U.S. So lots of targets,” he added, referring to acquisition prospects.
AtkinsRéalis reported that profits attributable to shareholders totalled $82.2 million in the three months ended June 30, up 29 per cent from a profit of $63.8 million in the same period a year earlier.
Revenue for the quarter rose 11 per cent $2.36 billion from $2.13 billion the year before.
On an adjusted basis, AtkinsRéalis said its professional services and project management business earned 49 cents per diluted share in its latest quarter, up from an adjusted profit of 41 cents per diluted share a year ago and roughly in line with analysts’ expectations, according to financial markets firm LSEG Data & Analytics.
This report by The Canadian Press was first published Aug. 9, 2024.
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