Stuart Olson Inc CUUHF

Expect the first Q to be better.

[mouserman]

Stuart Olson's outlook for its three business groups is as follows:

 

• Revenue from the industrial group is expected to be higher in 2017 than in 2016, as customer oil sands operations recover from the fire-related disruptions and challenging market conditions faced in 2016, enabling the group to execute on its growing volume of MRO contracts. Revenue growth is also supported by industrial projects outside of Alberta, including continued work on a power distribution project in Manitoba and a mining project in Ontario. Industrial group adjusted EBITDA and adjusted EBITDA margin are expected to be meaningfully higher year over year. This reflects the expectation that productivity challenges and additional costs incurred during and following the 2016 wildfire crisis will not repeat in 2017.
• The buildings group anticipates higher revenue in 2017 as a greater proportion of contracts move from preconstruction into construction phases. Buildings group revenue as a whole is expected to continue to be driven by predominantly public projects in multiple provinces, including the group's growing activity in Ontario. Adjusted EBITDA is expected to be modestly higher year over year as a result of higher revenue. Adjusted EBITDA margin is expected to be slightly lower in 2017, primarily reflecting the absence of closeout margins recognized on several larger public projects completed in 2016.
• Commercial systems group 2017 revenue is expected to be similar to 2016 levels, reflecting the continued slow rollout of new projects. Adjusted EBITDA and adjusted EBITDA margins are expected to be slightly higher than in 2016, reflecting the completion of a large project that negatively impacted 2016 results, partially offset by competitive pricing pressures both on projects in backlog and on projects expected to be secured in 2017.