Aecon Group Inc T.ARE

2 Key Drivers

[Gabriel]

Limits any additional losses if any at 125m. When SNC management announced that losses on LSTKs would be capped at 350m two years ago, the stock moved up over 15%. The 1.2B overhang on the stock price should gradually disappear.

Buyback program of up to 3.1m shares of 5% of the float. Considering half of the 270,000 shares are negotiated every day by investors (not day or swing traders), it would take 3 months to buy these shares if we are buying 25% of the shares really trades every day. 

Excerpts

Based on the information currently available, Aecon believes the potential for future additional financial risks to Aecon, if any, through to completion of the remaining three legacy projects should not exceed $125 million to the end of 2025.

Aecon’s Board of Directors has authorized a Normal Course Issuer Bid (“NCIB”) to purchase for cancellation up to 5% of the issued and outstanding common shares, or approximately 3.1 million common shares of Aecon, subject to the approval of the Toronto Stock Exchange (the “TSX”). Aecon intends to file a notice of intention with the TSX in this regard.

[Henrye]

G- is the 110 M write down is part of 125M for 2025 ? Or another 125 M on top of 110m ? 

[Kupotea]

It's an additional $125M. This was still on the whole very positive guidance. As long as gross margins hold this stock will double sometime between now and the end of 2025. Hopefully the market pulls that forward sooner than later but it may take a clean Q3 to get the ball rolling. 

[Gabriel]

Agreed. The text on the outlook for concessions is very upbeat. If these projections materialize, we are looking at doubling the EBITDA to 200m in the next few years.. 

[Gabriel]

The 125m is the worse case scenario with an IF, in addition. At least we can now focus on the value of the assets minus the liabilities and we have a cap for that liability. 

[Alexcanada]

Baystreet hates uncertainty. Gabriel, you pointed out the two elements which will help Aecon reach new heights.  I'm ok with this new provision since we are now putting an end to the LSTK saga. Once SNC confirmed their own provision for good, the stock started to climb rapidly and never looked back.

[Gabriel]

Right Alex. This is a company turning as the CEO had indicated on March 8. Construction: The road is clear to 2025 with about 6B in collaborative progressive design-build projects kicking in, and not  accounted for in the backlog. These are the small modular reactor system at Scarborough and its stations, the GO train expansion and the Contrecur terminal. Concessions: The CAGR is above

[Gabriel]

CEO; "Model is much more favorable to contractors."

[Henrye]

Did not loose any sleep. We knew coming clean was imperative. We maintain, the shares remain as huge bargain. We maintained the huge backlog not yet priced but finally estimating the unpriced back log. 5% share buybacks a great investment in itself at such low share price.  Those who sold are near sighted! Those who bought and continue to buy have perfect 20/20 vision. Aecon refuses to

[Gabriel]

Buyback and today's opportunity at the open is getting me closer to 3% ownership. Sellers have my condolences and buyers my congratulations.