RE:Broker guidance Paridigm comment.
Macro Enterprises Inc. (MCR-T): Reports First Quarter Results
MCR continues to be a risk reward story with the uncertainty around Trans Mountain and the Coastal GasLink (CGL). With CGL is gaining support and with construction underway the risk profile of that pipeline is decreasing. However, COVID has only further complicated issues around Trans Mountain. As a result MCR will see a significant y/y decline in revenue given the expected construction schedule for Trans Mountain is currently in limbo. MCR has a solid balance sheet and remains well positioned to benefit from future pipeline and facility construction work in Western Canada.
Facts:
• MCR reported first quarter revenue of $44.5mm, EBITDA of $5.8mm and EPS of $0.05. This compares to our estimates of $47.4mm, $5.7mm and a loss of $0.02; respectively. The EPS beat was a result of a non-cash gain of $2.8mm based on a mark-to-market fair value of the preferred shares.
• The majority of first quarter revenue came from pipeline and facility work with $6.9mm being a result of integrity and maintenance work. Based on the current environment MCR believes 2020 revenue will be in excess of $200mm. This estimate includes no revenues related to Trans Mountain, maintenance and integrity work beyond the end of the second quarter or any currently open contract bids.
• The company still has a significant backlog based on awarded contracts for both the Coastal GasLink and the Trans Mountain project.