RE:RE:RE:RE:RE:RE:RE:RE:BOOOOOM !!! Contract 720M !!!
You're bang on JTDouble. I think people have to keep in mind that BDI's target price increased to $2.25 after the last earning report. If you add this news the picture, we're looking into the $3-$4 range. The federal government will want projects like this going forward to help the economy, create jobs, and provide opportunities to First Nations groups such as the Mik'maq with this project. Accommodations for 5,000 workers during Covid will require a huge amount of square footage for the workforce housing due to Covid requirements. There will also be a great deal of "add ons" necessary to provide a safe environment due to Covid. So in summary, this would be an absolutely huge revenue generator and would be BDIs largest camp in many years.
By comparison their most recent large camp was for 908 beds for the Coastal Gas Link project awarded in 2018. The requirments for this camp are AT LEAST 5 x that of the CGL project. Once you factor in all the additional needs due to COVID requirements, you're looking at huge revenues that would likely increase BDI annual revenues over the 4 year projec. If they get somewhere near 50% of the 720M contract that equates to $360M over 4 years. We don't know the exact revenue and expenses breakdown, but if they were to get in the neighbourhood of $50M-$90M per year in revenues from this project, that would increase their revenues by 27%-48.5% from their current annual revenues ($185M in 2019). That is massive for a company the size of BDI. As stated in the news release: "A significant number of the modular structures will be sourced from Black Diamond’s existing inventory in Canada, relocated and repurposed, maximizing sustainability aspects of the project." ....this would help keep BDI expenses down since they will be utilizing existing fleet assets.
Awesome.