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Aecon Group Inc T.ARE

Alternate Symbol(s):  AEGXF

Aecon Group Inc. is a Canada-based construction and infrastructure development company. The Company delivers integrated solutions to private and public sector clients throughout Canada and other countries. It operates through two segments within the infrastructure development industry: Construction and Concessions. Its Construction segment includes all aspects of the construction of both public and private infrastructure, primarily in Canada, and internationally and focuses primarily on the civil infrastructure, urban transportation solutions, nuclear power infrastructure, utility infrastructure and industrial infrastructure. Its Concessions segment include the development, financing, build and operation of construction projects primarily by way of public-private partnership contract structures, as well as integrating the services of all project participants. The Company’s projects include Annacis Water Supply Tunnel, Bell Canada Gigabit Fiber Service, Finch West LRT, and others.


TSX:ARE - Post by User

Comment by Gabrielon Oct 24, 2023 8:29pm
125 Views
Post# 35699299

RE:Other Analyst Comments

RE:Other Analyst CommentsThe LSTK tree is hiding a forest.

1. The 4 LSTKs represent less than 10% of the backlog;
2. The Aecon claims are legitimate and "substantial" amounts are negotiated for 2 of them;
3. The cumulated losses in the books are conservative and assume no claims will be reimbursed;

Conclusion on LSTKs: It is fair to assume that we will ultimately close the 4 LSTKs at no additional losses considering the legitimacy of the claims and the fact that negotiations are ongoing with "substantial amounts" on the table. 

The TTM EBITDA excluding LSTKs (10% of the backlog) was 375m. I should be north of 400m in 2025 which even at a very low multiple of 4.5, puts the valuation at 1.6B for 61.7 m shares or close to 30$ per share (assuming concessions pays the debt).

Finally, Oaktree offers more than a 150m cash injection:
aecon-announces-$150-million-strategic-investment-in-aecon-utilities-group-by-oaktree
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