RE: RE: RE: ABM haves Blowout Q1 The aggregate demand from Susan Lake doubled this year, compared to 2011, to record levels.
This is due to the fact that over $8 billion in new and expanded oil sands projects began in 2012 and that trend is expected to continue over the new few years.
Management states that this increased demand has carried through into Q2 and we are not yet into the main demand period.
The House Lake gravel sales were for the Twinning of Highway 63, a project which will continue to require aggregate products on a large scale.
As a consequence of these new demands, one will see in the Q1 report that ABM has implemented a significant number of aggregate exploration programs on public land, and following review of the test programs, four aggregate mining applications have been submitted and have received approval from the Alberta Government.
There is much more in the Q1 report related to their other projects related to silica and salt as well as their initiatives to acquire or merge with other aggregate producers.
Finally,they are receiving price quotations from oil sand contractors for aggregate sales from their new aggregate pit at Kearl and it is expected that an announcement will soon be made.
Kearl is much closer to the Ft Mac oil sand operations than many of their competitors.
As transportation costs are a large fraction of total costs, it is expected that Kearl will gain more than share of business.
ABM earned
.11 per share in 2011, and we have seen aggregate demand considerably higher this year than in 2011.
Net earnings are already
.03 ahead of last year and ABM's biggest quarters are yet to report.
This will be bolstered by sales from the wholly owned Kearl pit where profitability will be much higher than Susan Lake.
In view of this, one can reasonably foresee that 2012 net earnings should double those of 2011 and perhaps hit the
.25 level.
Also positive is the fact that nearly all of the net earnings are ending up as addtions to the cash level, which keeps on rising.
All in all, a very strong quarter and an even stronger outlook.