Q2 2024 ATCO Ltd Earnings Call
Okay.
Operator: Thank you for standing by. This is the conference operator. Welcome to the ACTO second quarter 2024 results conference call and webcast. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then zero. I would now like to turn the conference over to Mr. Colin Jackson, Senior Vice President, Financial Operations. Please go ahead, Mr. Jackson.
Operator: Thank you for standing by.
Speaker Change: Thank you for standing by this is the conference operator welcome to the X. So second quarter 2024 results conference call and webcast.
Operator: This is the conference operator.
Operator: Welcome to the ATCO 2nd quarter 2024 results conference call and webcast. As a reminder, all participants are in listen-only mode, and the conference is being recorded.
Speaker Change: As a reminder, all participants are in listen only mode and the conference is being recorded.
Operator: After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star, then zero.
Speaker Change: After the presentation, there will be an opportunity to ask questions.
Speaker Change: She joined the question queue you May Press Star then one on your telephone keypad.
Should you need assistance during the conference call you May signal, an operator by pressing Star then zero.
Colin Jackson: I would now like to turn the conference over to Mr. Colin Jackson, Senior Vice President, Financial Operations. Please go ahead, Mr. Jackson.
Colin Jackson: I would now like to turn the conference over to Mr. Colin Jackson Senior Vice President Financial operations. Please go ahead Mr. Jackson.
Colin Jackson: Thank you. Good morning, everyone. We're pleased you can join us for ATCO 2nd quarter 2024 conference call with me today as Executive Vice President and Chief Financial and Investment Officer Katie Patrick.
Colin Jackson: Thank you good morning.
Everyone.
Colin Jackson: We're pleased you could join us for ATCO's second quarter 2024 conference call. With me today is Executive Vice President and Chief Financial and Investment Officer, Katie Patrick.
Speaker Change: Pleased you could join us for <unk> second quarter 2000.
Speaker Change: Q4 conference call with.
Speaker Change: With me today is executive Vice President.
Speaker Change: <unk> financial and investment officer.
Colin Jackson: Before we move into today's remarks, I would like to take a moment to acknowledge the numerous traditional territories on which our global facilities are located. Today we're speaking to you from our aqued park head office in Calgary, which is located in the Treaty 7 region. This is the ancestral territory of the Blackfoot Confederacy, comprised of the Cicacus, the Kainai, and the Bugani nations. This is the new nation and the Stony Dakota Nations, which includes the Tchikiki, Ferrispaw and Good Stony First Nations. I also want to recognize the city of Calgary as well to the Native Nation of Alberta, districts five and six.
Speaker Change: Sure.
Colin Jackson: Before we move into today's remarks, I would like to take a moment to acknowledge the numerous traditional territories and whole lands on which our global facilities are located. Today we're speaking to you from our ATCO Park head office in Calgary, which is located in Treaty 7 territory. This is the ancestral territory of the Blackfoot Confederacy, comprised of the Siksika, the Kainai, and the Pagani Nations, the Sissinew Nation, and the Stoney Dakota Nations, which includes the Chikniki, Ferris Paw, and Good Stoney First Nations.
Speaker Change: Before I move into todays remarks, I would like to take a moment to knowledge the numerous additional territories in Poland.
Speaker Change: Our global facilities are located.
Today, we're speaking to you from our Apple Park head office in Calgary, which is located in the treaty.
Speaker Change: This is the ancestral territory Blackfoot Confederacy comprised of a six cap.
Speaker Change: Got any patients.
Speaker Change: <unk> seen new nation, starting Dakota patients, which includes the key first.
Speaker Change: Tony first nations.
Colin Jackson: I also want to recognize that the City of Calgary is home to the Métis Nation of Alberta, Districts 5 and 6. During our second quarter, we proudly celebrated National Indigenous History Month, Time to Honor the Stories, Achievements, and Resilience of Indigenous Peoples. We carry this message beyond the month of June and respect the diverse language, history, ceremonies, and cultures of the indigenous peoples who call these areas home.
Speaker Change: I also want to recognize the city of Calgary installs that <unk> level.
Speaker Change: Districts.
Speaker Change: Thanks.
Colin Jackson: During our 2nd quarter, we've probably celebrated National Indigenous History Month, time to honor the stories, achievements and resilience of Indigenous peoples. We carry this message beyond the month of June: respect the diverse language, history, ceremonies, and cultures of the indigenous peoples who call these areas home.
Speaker Change: During our second quarter, we proudly celebrated national's history.
Speaker Change: Hi, Ananda story achievements the resilience indigenous peoples.
Gary This message beyond the Massa Jr. Respect to diverse language history ceremonies and cultures of indigenous people to call. These areas.
Colin Jackson: In terms of today's call, we'll hear from Katie, who will deliver comments on our financial results and raising company developments. Following today's remarks, we will take questions from the investment community. We know that a replay of the conference call, a short supplementary presentation, and today's transcripts will be available on our website at atco.com following the call. The materials can be found in the investor's section under Events and Presentations. Today's remarks will include forward-looking statements that are subject to important risks and uncertainties. For more information on these risks and uncertainties, please refer to our filings of the Canadian Securities Regulators.
Colin Jackson: In terms of today's call, we will hear from Katie, who will deliver comments on our financial results and recent company developments. Following her remarks, we will take questions from the investors. Please note that a replay of the conference call, a short supplementary presentation, and today's transcripts will be available on our website at atco.com following the call.
Speaker Change: In terms of today's call, we'll hear from Katie who will deliver her comments about our financial results and recent company developments.
Speaker Change: Today's remarks, we will take questions from the investment community.
Speaker Change: Please note that a replay of the conference call short supplementary presentation and today's transcript will be available on our website at <unk> Dot com following the call.
Colin Jackson: The materials can be found in the Investors section under Events and Presentations. Today's remarks will include forward-looking statements that are subject to important risks and uncertainties. For more information on these risks, please refer to our filings with the Canadian Securities Regulators. During today's presentation, we may refer to certain non-GAAP and other financial measures, such as total assignment measures, adjusted earnings, adjusted earnings per share, and capital investment. Beginning this quarter, we have also provided adjusted earnings for interest, taxes, depreciation, and amortization for Adjusted HEMA Dot for ATCO Structures and ATCO N
Speaker Change: Materials can be found in the investors section under events and presentations.
Speaker Change: Today's remarks will include forward looking statements that are subject to important risks and uncertainties.
Speaker Change: For more information on these risks and uncertainties. Please refer to our filings with the Canadian Securities regulators.
Colin Jackson: During today's presentation, we may refer to certain non-GAAP and other financial measures that is total of segment measures, adjusted earnings, adjusted earnings per share, and capital investment. Beginning this quarter, we have also provided adjusting or adjusted earnings before interest, taxes, depreciation, and advertising for adjusted EBITDA for aqua structures and aqua end power. These non-GAAP measures do not have any standardized meaning under IFRS, and as a result, they may not be comparable to similar measures presented by other entities. Thank you all very much for joining us today. I'm pleased to report that ATCO achieved a just earnings of $96 million in a second quarter this year.
Speaker Change: During today's presentation, we may refer to certain non-GAAP and other financial measures such as total segment measures adjusted earnings adjusted earnings per share and capital investments.
Speaker Change: Beginning this quarter. We have also provided adjusting adjusted earnings before interest taxes depreciation and amortization.
Speaker Change: Our adjusted EBITDA.
Speaker Change: For alcohol structures and Alco empower these.
These non-GAAP measures do not have any standardized meaning under IRS and as a result, they may not be comparable to similar measures presented by other entities.
Colin Jackson: These non-GAS measures do not have any standardized meaning under IFRS, and as a result, they may not be comparable to similar measures presented by other companies. And now, I'll turn the call over to Katie for her opening remarks.
Speaker Change: And now I'll turn the call over to Katie for her opening remarks.
Katie Patrick: Thanks, Colin, and good morning, everyone. Thank you all very much for joining us today.
Speaker Change: Yeah.
Katie: Thanks, Colin and good morning, everyone. Thank you all very much for joining us today.
Katie Patrick: I'm pleased to report that ATCO achieved a just earnings of $96 million in the second quarter this year. This is $9 million, or 10% higher than the second quarter of last year. This $9 million of growth came primarily from the strong performance of our structures and Alberta utility business. During the quarter, and as part of our ongoing drive for operational efficiencies, we took steps to streamline our costs, took a hard look at our corporate overheads and business units to ensure our teams are fit for purpose and aligned to our renewed growth ambitions.
Katie: I am pleased to report that for achieving adjusted earnings of $96 million.
Katie: And part of this year.
Katie Patrick: This is $9 million for 10% higher than the second quarter last year. This not doing dollars of growth came primarily from the strong performance of our structures and operating utility businesses. During the quarter and as part of our ongoing drive for operational efficiencies, we took steps to streamline our cost structure. We took a hard look at our corporate overheads and business units to ensure our teams are fit for purpose and aligned to our renewed growth conditions. Adding into the second half of the year, our teams are refreshed, nimble, and laser-focused on executing our project pipeline.
Katie: This is $9 million, 10% higher than second quarter of last year.
Speaker Change: It's not doing island growth came primarily from a strong performance of our structures are pretty Germany.
Speaker Change: During the quarter as part of our ongoing drive for operational efficiencies, we took steps to streamline our cost structure.
Speaker Change: We took a hard look.
Speaker Change: Perhaps visit students to ensure our teams are fit for purpose and aligned to our renewed.
Katie Patrick: Heading into the second half of the year, our teams are refreshed, nimble, and laser-focused on executing our project pipeline. Moving to Canadian Utilities, where I won't go into too much detail as we spoke about their performance on this morning's CU call.
Katie: Heading into the second half of the year, our teams are refreshed and bolt laser focused on executing the project pipeline.
Katie Patrick: Moving to creating utilities where I won't go into too much detail, as we spoke about their performance on this morning's call. I want to reiterate that we continue to focus on delivering growth in 2024 and beyond. Our confidence to deliver growth within the utilities was re-informed in early May as we increased our Canadian rate-based compound annual growth rate to 3.5 to 4.3 to 2026. We continue to see very strong fundamentals in our core algorithm markets and opportunities to deliver even higher rate-based growth over the long term.
Speaker Change: Moving to Canadian charities, where I wont go into too much.
Speaker Change: Detail as he spoke about their performance on this mornings call.
Katie Patrick: I want to reiterate that we continue to focus on delivering growth in 2024 and beyond. Our confidence in delivering growth within the utilities was reinforced in early May as we increased our Canadian rent-based Compound Annual Growth Rate 3.5-4.3-2026. We continue to see very strong fundamentals in our core Alberta markets and opportunities to deliver even higher rate-based growth over the long term. In June, we announced our decision to move forward with Phase I of the Atlas Carbon Storage Hub, alongside our partner Shell.
Speaker Change: I want to reiterate that we continue to focus on delivering growth in 2024 and beyond.
Speaker Change: Our confidence to deliver growth in the utility was reinforced early may and we increased our Canadian maybe.
Speaker Change: Compound annual growth rate of three five to four point.
Speaker Change: Three into 2026.
Speaker Change: We continue to see various jobs.
Speaker Change: Or Alberta markets.
Speaker Change: Opportunities to deliver even higher rate base growth over the long term.
Katie Patrick: In June, we announced our decisions to move forward with phase one of the Atlas Carbon Storage Hub along, sorry, our partner Shell. This multi-phase, open-access carbon storage hub is a major milestone in our commitment to advancing products that services, which may contribute positively to society's goal of reducing emissions. This is the first step in F1 powers work to create a full-value chain for hydrogen development, from protection and carbon evapment to transport and export. The Atlas Carbon Storage Hub is integral to add to the long-term strategy and sustainability aspirations.
Speaker Change: Thank you, we announced our decision to move forward with phase one of the Atlas carpet storage.
Speaker Change: Alongside our partner shell.
Katie Patrick: This multi-phase, open-access, carbon storage hub is a major milestone in our commitment to advancing products and services that may contribute positively to society's goal of reducing emissions. This is the first step in ATCO M Power's work to create a full value chain for hydrogen development. Production and carbon abatement to transport and export. The Atlas Carbon Storage Hub is integral to ATCO's long-term strategy and sustainability aspirations. For those who were unable to make this morning's conference call, the replay will be available on our website shortly.
Speaker Change: This multi phase open access carbon storage is a major milestone in occupancy.
Speaker Change: I can call it services, which may contribute positively.
Speaker Change: Positively.
Speaker Change: In school of reducing emissions.
Speaker Change: This is the first step that plug powers work to create value chain for hydrogen development.
Speaker Change: In protection and carbon abatement to transport crude exports.
Speaker Change: Yeah, let's carbon storage.
Speaker Change: Integral I suppose long term strategy and sustainability aspiration.
Katie Patrick: For those who weren't unable to make this morning's CU call, the replay will be available on our website shortly. Atlas Structures continued to deliver strong results, with adjusted earnings of $30 million to the quarter, or 15% higher than the prior year. Structures continued to deliver growth for the expansion of our base business and the optimization of our fleet. This major project being a supplement to these earnings. Continued investment in our base business, particularly in our space rental business, has allowed us to extend both our footprint of operating locations and our S-perm base. This is increased the number of units we have on rent while improving our average rental rate by 10%.
Speaker Change: But now I think it will take at this point you call. The replay will be available on our website shortly.
Katie Patrick: ATCO structures continued to deliver strong results with adjusted earnings of $30 million in the quarter, or 15% higher than the prior year. Structures delivered growth from the expansion of our base business and the optimization of our fleet. Major projects are a supplement to these earnings. Continued investment in our base business, particularly in our space rental business, has allowed us to expand both our footprint of operating locations and our customer base. This has increased the number of units we have on rent while improving our average rental rate by 10%.
Speaker Change: And construction has continued to deliver strong results with adjusted earnings of $30 million for the quarter or 18% higher than the prior year.
Speaker Change: So that trend continues to deliver growth.
Speaker Change: Expansion of our base business and the optimization of our fleet.
Speaker Change: With major projects during and subsequent to these earnings.
Speaker Change: Continued investment in our base business, particularly in our space rentals business.
Speaker Change: It allowed us to extend the footprint of operating locations.
Speaker Change: Yes.
Speaker Change: This has increased the number of units, we havent rent, while improving our average rental rate by 10%.
Katie Patrick: In Q2, Structures announced the strategic acquisition of NRV Modulus solution. NRV is the leading manufacturer of a modular multi-family residential, industrial, education, and commercial building. Structures will integrate NRV into an existing modular business operation. Allowing us to service an extended market for the additional 19th century capacity in Ontario and British Columbia. This transaction increases our capacity in growing markets, compromising our strategy for continued sleep expansion. Further, the acquisition was asked to access to a large existing customer base and skilled employees, which NRV has built in these markets over decades of operation. Doctors prove the history of the leading innovator and highly competitive global watch over market platforms will create invaluable synergies for NRV's future performance.
Katie Patrick: In Q2, Structure announced the strategic acquisition of NRV Modulus. NRB is a leading manufacturer of modular multi-family residential, industrial, education, and commercial buildings. Drug Traders will integrate NRB into an existing modular business operation. Allowing us to service an extended market with additional manufacturing capacity in Ontario and British Columbia. This transaction increases our capacity in growing markets, complementing our strategy for continuously expanding. In addition, the exhibition provides ATCO access to a large existing customer base and skilled employees, which NRV has built in its market over decades of operation.
Chip Chesterman: Thank you chip chesterman announcing a strategic acquisition.
Speaker Change: Modular switch.
Speaker Change: <unk> is a leading manufacturer of modular multifamily residential industrial and.
Speaker Change: In commercial buildings.
Speaker Change: Judges will integrate and there'll be interest.
Speaker Change: Okay great.
Speaker Change: Although they have to service and extended.
Speaker Change: I think batteries.
Speaker Change: In British Columbia.
Speaker Change: This transaction increases our capacity in growing markets.
Speaker Change: I think our strategy for continued fleet expansion.
Speaker Change: Further we have sufficient capital.
Speaker Change: With access to a large existing customer base.
Speaker Change: Okay.
MRV: MRV has built his market.
Speaker Change: In case of upwards.
Katie Patrick: Structure's proven history as a leading innovator and highly competitive global watchwood manufacturer will create invaluable synergies for NRV's future performance. The purchase price of $40 million represents the book value of NRB and includes a normalized working capital element.
Jeff: Jeff has proven history.
Speaker Change: They are highly competitive globally.
Speaker Change: Patrick.
Speaker Change: Invaluable synergy.
Speaker Change: Future performance.
Katie Patrick: The purchase price of $40 million represents the both value of NRV and includes the normal audience working capital levels. Synergies will be created through ATCO's existing lending factory expertise, enhanced sales from our retail growth networks of growing sleep assets, and our proven ability to improve operational processes. Operational improvements can include strategic sourcing, automation, growth improvement, and economy scale. We expect the transaction to close on 3rd quarter of 2024, and we're excited for the opportunity to master market value and synergy that NRV brings to our structure's business as a market leader in modular construction across Canada.
Speaker Change: The purchase price of $42 million represents the book values and.
Speaker Change: That includes the normalized working capital.
Katie Patrick: Synergies will be created through ATCO's existing manufacturing expertise, Enhanced Sales from our Retail Grants Network of Growing Fleet Assets, and our proven ability to improve operational processes. Operational improvements can include strategic sourcing, automation, growth improvement, and economy for scale.
Jason: Did you Jason will be created through.
Jason: Manufacturing expertise.
Jason: It has scale.
Speaker Change: Retail brands.
Speaker Change: Yeah.
Speaker Change: And our proven ability to improve operational processes.
Speaker Change: Operational improvements can include strategic sourcing automation.
Speaker Change: And hardening for scale.
Katie Patrick: We expect the transaction to close in the third quarter of 2024, and we're excited for the opportunity to maximize the value and synergies that NRV brings to our structures business as a market leader in modular construction across Canada. We have a proven track record in our structures business of successfully integrating acquisitions into the ATCO portfolio. Modular manufacturing is a core competitive advantage that Structures has expanded over decades of continuous improvement. A recent example of this is our strategic expansion into the residential housing sector through our Triple M Housing Acquisition in 2023. The residential housing segment has been a valuable strategic addition to our business growth, and housing continues to deliver strong results year-over-year.
Speaker Change: We expect the transaction to close in the third quarter of 2020.
Speaker Change: We're excited she ever changing last month entergy.
Speaker Change: Pete.
Speaker Change: Page two our structures business market.
Speaker Change: Market here.
Speaker Change: We're getting traction.
Speaker Change: Uh huh.
Katie Patrick: We have a proven track record in our structure's business of successfully integrating acquisition into the ICO portfolio. Modular manufacturing is a core competitive advantage that structures have expanded over decades of continuous improvement. A recent example of this is our strategic expansion into the residential housing sector through our triple-end housing acquisition in 2023. The residential housing segment has been an invaluable strategic addition to our business growth. Triple-end housing continues to deliver strong results year-over-year, and it develops a large pipeline of new opportunity, and it continues to provide synergies and value positioning us for future growth. Documentary additions like NRV will work conjunctively to build our industry-leading expertise across all of our losses platforms. As we look to the second half of 2024, we continue to focus on delivering sustainable earnings during and by the growth of our basis of the structures.
Speaker Change: We have a proven track record.
Speaker Change: Successfully integrating.
Speaker Change: The Alco portfolio.
Speaker Change: Lots of manufacturing.
Speaker Change: Turning to the package and structure that's extended over a decade.
Speaker Change: Yeah.
Speaker Change: A recent example of that.
Speaker Change: Strategic expansion.
Speaker Change: And to the residential housing sector.
Speaker Change: Two Clinton housing acquisition in 2023.
Speaker Change: Your best guess for housing segment, and a valuable strategic addition to our business growth.
Speaker Change: That's why as housing continues to deliver strong results year over year.
Katie Patrick: It has developed a large pipeline of new opportunities, and it continues to provide synergy and value positioning us for future growth; complementary editions like NRB will work conjunctively to build our industry-leading expertise across all of our modular classes. As we look to the second half of 2024, we continue to focus on delivering sustainable earnings, driven by the growth of our base business substructures. While we anticipate a small dip in activity in Q3, we have line of sight to new projects in Australia that are expected to drive growth in Q4. ATCO is confident that there continues to be a solid pipeline of projects in Australia, Canada, and the United States that we believe will drive additional opportunities and support further growth for structures in 2024 and beyond. Overall, ATCO had a great second quarter and first half of 2024.
Speaker Change: It's about a large pipeline of new opportunity and it continues to provide synergy.
Speaker Change: Our future growth.
Speaker Change: And I've been well.
Speaker Change: Work.
Speaker Change: Just to build our industry, leading expertise all of the prior losses.
Speaker Change: As we go through the second half 2024.
Speaker Change: Do you need to focus on delivering sustainable earnings.
Speaker Change: Our base business type structures.
Katie Patrick: When we anticipate a small, different activity in Q3, we have line-site new projects in Australia that are expected to drive growth in Q4. We mean confidence that there continues to be a solid pipeline of projects in Australia, Canada, and the United States that we believe will drive additional opportunities that support for the growth for structures in 2024 and beyond. Overall, our automatic grade second quarter and first task of 2024. Across our portfolio assessment, we continue to focus on executing our growth plans. We believe that the unique combination of investments in our portfolio and the work we've done to expand the earnings from these assessments creates a foundation to support our growth aspirations going forward.
Speaker Change: Well, we just made a small dip in activity in Q3, we have licensed.
Speaker Change: Your line of sight in projects in Australia.
Speaker Change: Did you drive Q4.
Speaker Change: Give me confidence that there continues to be a solid pipeline of projects, Australia, Canada, and the United States.
Speaker Change: I believe it will drive additional opportunities for further growth.
Speaker Change: Actually the 'twenty 'twenty four and beyond.
Speaker Change: Overall, I feel that a great second quarter first half of 2024.
Katie Patrick: Crosstrek Portfolio We continue to focus on executing a growth plan. We believe that the unique combination of investments in our portfolio and the work we've done to expand the earnings from these investments creates the foundations to support our growth aspirations going forward. We look forward to keeping you updated as we progress on our growth initiatives throughout the year. That concludes my prepared remarks. I will now turn the call back to Colin.
Speaker Change: Across our portfolio.
Speaker Change: We continue to focus on executing our growth plans.
Speaker Change: We believe that the unique combination of investments in our portfolio.
Stan: Thank you Stan.
Speaker Change: Create the foundation.
Stan: Aspirations going forward.
Katie Patrick: We look forward to keeping you updated as we progress on our growth initiatives throughout the year. That concludes my prepared thoughts.
Stan: We look forward to keeping you updated as we progress on our growth initiatives throughout the year.
Speaker Change: That concludes my prepared remarks, I will now turn the call back to Colin.
Colin Jackson: I will now turn the call back to Colin. Thank you, Katie.
Colin Jackson: Thank you Katie.
Colin Jackson: In the interest of time, we ask that you limit yourselves to two questions. If you have additional questions, you're welcome to rejoin the discussion. I will now turn it over to the conference coordinator for questions.
Colin Jackson: To be honest, it's time we ask that you limit yourself to two questions. If you have additional questions, you are welcome to rejoin the queue.
Colin Jackson: We ask that you limit yourself to two questions.
Colin Jackson: Did you have additional questions you're welcome to rejoin the queue.
Operator: I will now turn it over to the conference coordinator for questions.
Speaker Change: I will now turn it over to the conference coordinator for questions.
Operator: We will now begin the question and answer session. To join the question queue, you may press star, then one on your telephone keypad. You will hear a tone acknowledging your request.
Operator: We will now begin the question and answer session. To join the question queue, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw from the question queue, please press star then 2. Once again, anyone on the conference call who wishes to ask a question may press star then 1 at this time. And our first question comes from Maurice Choy of RBC Capital Markets. Please go ahead.
Speaker Change: We will now begin the question and answer session.
Speaker Change: To join the question queue you May Press Star then one on your telephone keypad.
Speaker Change: You will hear a tone acknowledging your request if you are using a speakerphone. Please pick up your handset before pressing any keys.
Operator: If you are using a speaker phone, please pick up your handset before pressing any keys. To withdraw from the question queue, please press star, then two.
Speaker Change: To withdraw from the question queue. Please press Star then two.
Operator: Once again, anyone on the conference call who wishes to ask a question may press star, then one at this time.
Speaker Change: Once again anyone on the conference call, who wishes to ask a question you May Press Star then one at this time.
Maurice Choy: And our first question comes from Maurice Choy of RBC Capital Markets. Please go ahead.
Speaker Change: And our first question comes from Maurice Choy of RBC capital markets. Please go ahead.
Maurice Choy: Thanks.
Maurice Choy: Thanks and good morning, everyone. Just a few first questions on the NRB acquisition. Thanks for the color and logic behind it. Can you discuss what the cost is for this transaction and your expectations in terms of annual earnings contribution from this deal?
Maurice Choy: Good morning, everyone. Just first questions on the NRB acquisition. Thanks for the color and logic behind it. Can you just discuss what the cost for the transaction and your expectations in terms of annual earnings contribution from the deal?
Maurice Choy: Thanks, and good morning, everyone.
Maurice Choy: Just the first question is on the RB acquisition.
Speaker Change: Thanks for the color on.
Maurice Choy: Logic behind it.
Speaker Change: Can you just discuss what the cost for this transaction and your expectations in terms of <unk>.
Speaker Change: Or earnings contribution from this deal.
Katie Patrick: Yeah, thanks, Maurice. So, as mentioned, it was a $40 million acquisition, which includes the normalized 40-calil level. And as I mentioned, that is at the level value of the current asset held on top. The dollar should predict that.
Katie Patrick: So, as mentioned, it is a $40 million acquisition, which includes a normalized 40 capital level, and as I mentioned, that is at a low value of the current asset held on top of the Dollar Tree Predictor. We're not going to provide at this moment a forecast for future earnings, but as I said, we think there are very strong synergies as well as strategic expansion into the new market that we think should help drive growth next year.
Speaker Change: Yeah, Thanks, Larry so.
Speaker Change: As mentioned it is a $40 billion acquisition, which includes my working capital level.
Speaker Change: Uh huh.
Speaker Change: It is.
Speaker Change: Yeah.
Speaker Change: That's helpful.
Speaker Change: The balance sheet.
Katie Patrick: You know, we're not going to provide, at the moment, a forecast for the future earnings contribution. But I think that we think there are very strong synergies, as well as the strategic expansion into the new market that we think should help drive growth next year into our interest. Got it.
Speaker Change:
Speaker Change: We're not going to provide it.
Speaker Change: But that's pretty easy.
Speaker Change: So the future earnings power.
Speaker Change: Do you think there are very strong.
Speaker Change: Synergy is probably the strategic expansion into a new market.
Speaker Change: We think should help drive growth.
Speaker Change: Our next year.
Speaker Change: Okay.
Katie Patrick: And maybe, besides the differences between this deal and triple M's businesses, can you just elaborate on how you approach this deal, and should we kind of use triple M's contributions in terms of growth and the upside?
Maurice Choy: And maybe besides the slightly different differences between this deal and triple-end businesses, can you can just elaborate on how you approach the deal and should we kind of use the triple-end contributions in terms of the growth and the upside from the deal and using that as a blueprint for NRB?
Speaker Change: Got it and maybe just besides the.
Speaker Change: It's quite different.
Speaker Change: This deal at Triple S businesses can you just elaborate on.
Speaker Change: How you approach the steel and should we kind of use a trickle.
Speaker Change: You know.
Speaker Change: In terms of the growth.
Speaker Change: The upside from the deal.
Speaker Change: And using that as a.
Speaker Change: For an RV.
Speaker Change: Yeah.
Katie Patrick: Yeah, I would use the two acquisition essentially quite differently. You know, triple-end, what would you have residential manufacturing prior really leveraged into the new business segment? And we've largely kept the two businesses to separate in the sense that they have a bit of a distinction network in which they operate.
Katie Patrick: I would view the two acquisitions quite differently. Triple M, while we did have residential manufacturing prior, really leveraged us into a new business segment, and we've largely kept the two businesses separate in the sense that they have a bit of a distinct dealer network in the way that they operate.
Speaker Change: Yeah, I mean, the two acquisitions actually like differently.
Speaker Change: Kimberly.
Kimberly: You have residential and it's actually higher theory.
Kimberly: Just into the new business segment.
Kimberly: Are we largely kept the two businesses separately.
Kimberly: So they have a.
Kimberly: Even that working with the operator.
Kimberly: Yes.
Katie Patrick: NRB is quite a different policy than that. You know, we are in this business. We are; this gives us new locations that are strong, so we do employees, as we said. This is very much our core business. And you know, it's a bit of a difference, as I said, value proposition strategy in terms of creating operational efficiencies and synergies, as well as things like that.
Kimberly: <unk>.
Speaker Change: Did not.
Speaker Change: Uh huh.
Katie Patrick: NRBE is quite a different proposition in that we are in this business. This gives us new locations and a strong set of new employees, as you said. This is very much our core business, and it was a bit of a different, as I said, value proposition strategy in terms of creating operational efficiencies. Synergies is brought to you in the Spanish version.
Kimberly: We are in the business.
Speaker Change: It gives us new locations.
Speaker Change: Oh boy.
Speaker Change: As he said.
Speaker Change: For business.
Speaker Change: It was a bit of a different.
Speaker Change: Okay.
Speaker Change: Non competition challenge in terms of.
Speaker Change: Creating operational efficiencies.
Speaker Change: And you gave as well.
Speaker Change: Okay.
Speaker Change: Okay.
Maurice Choy: So if I can move on to another deal that I think was close on the CU side, the ATCO Energy that was sold from CU to ATCO parent.
Maurice Choy: If I can move on to another deal that I think was disclosed on the CU side, the ATCO energy that was sold from see you to ATCO parents. Again, similar question, what's the logic here? Cost and earnings contribution, if you don't mind.
Speaker Change: And if I can move on to another deal.
Speaker Change: Yeah. It was just closed on the acute side.
Speaker Change: The eco and the Cheetah was sold from.
Speaker Change: You too cool parents.
Katie Patrick: Again, similar question: what's the logic here, cost than earnings contribution, if you don't mind? Yeah, so when we took a look at our portfolio of businesses, this is really kind of all of the greatest strategic lineman to the ATCO level in terms of its focus on the customer on the home. And you know, we just made the decision to move ATCO Energy from key utilities to ATCO Limited. You know, obviously that was done with full understanding valuation, such as cleaning and evaluating that transfer. In terms of earnings contribution, you know, I think we've seen a good road to get through in that business.
Speaker Change: Again similar question, what's the logic here cost cutting earnings contribution if you don't mind.
Katie Patrick: Yeah, so, when we took a look at our portfolio of businesses, this really had a greater strategic alignment to the ATCO level in terms of its focus on the customer, on the home, and, you know, we just made the decision to move ATCO Energy from Canadian Utilities to ATCO Ltd. Obviously, that was done with a full independent evaluation, especially when you're evaluating that transfer. In terms of earnings contribution, you know, I think we've seen a good growth trajectory in that business.
Speaker Change: Yeah, So you know what.
Speaker Change: He took a look at our portfolio of businesses.
Speaker Change: Lee.
Speaker Change: The greatest strategic language the actual number in terms of the focus on the customer.
Speaker Change: And.
Speaker Change: Maybe it is.
Speaker Change: Uh huh.
Julien: Hey, Julien.
Speaker Change: Absolutely.
Speaker Change: Obviously that was done.
Speaker Change: Any valuation of screening evaluating that constantly.
Speaker Change:
Speaker Change: In terms of earnings contribution.
Speaker Change: You know I think.
Speaker Change: We've seen a good trajectory in that business.
Katie Patrick: It has grown in the Alberta marketplace. We continue to see opportunities for growth there. And, you know, we obviously have some different product lines that we hope will continue to drive earnings growth as we go forward. We don't specifically segment or disclose that segment at this time, but we maintain that we will do that moving forward.
Katie Patrick: It has grown in the Alberta marketplace; we continue to see opportunities for growth there. And you know, we obviously have some different product lines that we hold with what we can use you, that we can use both people forward.
Speaker Change: It has.
Speaker Change: We continue to see opportunities for growth there.
Speaker Change: Uh huh.
Speaker Change: And.
Speaker Change: He has a different product lines.
T D: T D.
Speaker Change: John what are you supposed to people with Yelp.
Katie Patrick: We don't specifically segment or disclose that segment at this time, but we need things to do that in order. Would it be quite similar to the net book value that you have in the CU balance sheet? In terms of what assets and I bills, Dr. Seal? About 100 million bucks. Yes, it's in a similar range, yes.
Speaker Change: These statements are disclosed in that segment.
Paul: It's Paul.
Speaker Change: Is there anything either.
Maurice Choy: Would it be quite similar to the net book value that you have?
Speaker Change: Would it be quite similar to the net book value that you have.
Speaker Change: And as to your balance sheet.
Speaker Change: What I.
Speaker Change: Set to liabilities held for sale.
Speaker Change: But 100 million Bucks.
Katie Patrick: Yes, it's in a similar price range.
Speaker Change: Yeah.
Speaker Change: The range.
Maurice Choy: Got it. And just to wrap up on this one, I suppose. Philosophically speaking, CU was always viewed to be the energy and energy infrastructure side of ATCO's essential services pillar. With ATCO energy kind of moving to the ATCO side, it feels like there's a little bit of a change in that separation between what's CU and what's. Can you just highlight where that has changed, or is this more of an anomaly and one-off?
Maurice Choy: Got it. And just to see probably this one, I suppose, philosophically speaking, CU was always used to be the energy and energy infrastructure side of ATCO's, you know, essential services pillar.
Speaker Change: Got it and just to keep up on this one I suppose.
Speaker Change: Frankly speaking C U.
Speaker Change: He used to be the you know the.
Speaker Change: Energy and energy infrastructure side at COSE.
Speaker Change: Essential services pillar.
Katie Patrick: You know, with ATCO Energy kind of moving to the ATCO side, it feels like there's a little bit of a change in that separation between CU and what CU and what's what CU within ATCO family continues to highlight, but that has changed or is this more of a normally and one off? Yes, got. You know, the interesting question I think, you know, is we view ATCO Energy, which we could call a group of businesses that fall on the ATCO retail, that also includes their Blue-Plane Kitchen. It's also managed under the same banner and our press by that position; that was the small press by that position they made last year.
Speaker Change: What's that go energy kind of moving to D at cool side.
Speaker Change: It feels like there's a little bit of a.
Speaker Change: Change in that separation between you and what's your what's.
Speaker Change: Okay.
Speaker Change: What's what's you within the <unk> family continue just.
Speaker Change: Highlight that has changed or is this more of a normal yet.
Speaker Change: Okay.
Katie Patrick: Yeah, you know, it's an interesting question. I think, you know, we view ATCO Energy, which we collectively call a group of businesses that fall under that, ATCO Retail, that also includes our Blue Flame Kitchen, that's all managed under the same banner, and our Fresh Brite Acquisition, that was the small Fresh Brite acquisition that we made last year. And really, that, to us, is a retail, a customer-oriented, customer-facing play. As we look to grow other businesses in there, particularly green, some of the private service offerings there, you know, there's a bit of a divergence away from just direct, just typical energy portfolios. So I think it's not as clear cut as just the pure energy services.
Speaker Change: Yeah.
Speaker Change: Question I think you know me.
Speaker Change: U S English.
Speaker Change: How long is that after we tell them that also like kitchen.
Speaker Change: All right.
Speaker Change: <unk> banner.
Speaker Change: And our pipeline of acquisitions at least the small freshmen.
Katie Patrick: And really that to us is a big detail, a customer-oriented, customer-facing plan.
Speaker Change: Last year, it really back to us.
Speaker Change: Retail gain customer oriented customer facing right.
Katie Patrick: As we look to grow other businesses in there, particularly green, some of the products and service offerings there, you know, there's a bit of a divergence away from just direct, just simple energy portfolio. So I think it's not a clear plan that's just a pure energy service provider.
Speaker Change: They're particularly.
Speaker Change: For the product and service offerings there.
Speaker Change: There's a bit of a divergence away from just direct.
Jim: Just one for Jim.
Speaker Change: So I think.
Speaker Change: Oh, it's not.
Speaker Change: It's just the peers and you said it.
Speaker Change: Yeah.
Rob Hope: Once again, if you would like to ask a question, please press store the One. And our next question will come from Rob Hope with Scotia Bank.
Operator: Once again, if you would like to ask a question, please press star, then 1. And our next question will come from Rob Hope with Scotiabank. Please go ahead.
Speaker Change: Once again, if he would like to ask a question. Please press Star then one.
Speaker Change: And our next question will come from Rob Hope with Scotiabank. Please go ahead.
Rob Hope: Please go ahead.
Rob Hope: On the structures business, with another roll-up MA on the manufacturing side, how do you think about your footprint and the potential for further roll-ups, whether it be in your core geographies or in new geographies?
Rob Hope: Morning, everyone.
Rob Hope: Good morning, everyone I'm just on the structures business, you know with another kind of roll up a M E on the on the manufacturing side you know how do you think about your footprint are and the potential for further roll ups, whether it be in your core geographies or in new geographies.
Katie Patrick: Just on the structures business, you know, with another kind of roll-up MA on the main manufacturing side, you know, how do you think about your footprint and the potential for further roll-ups, whether it be in your core geographies or in your core geographies?
Katie Patrick: Yeah, I think, well, thanks for the question. This acquisition, as I said in my prepared remarks, I think that it really positions us well, particularly in Eastern Canada, where we do have a branch network, but we did not previously have any manufacturing capacity. So we're really excited about adding that to the footprint. We obviously have a strong position across Canada, and this really augments that. What do you think about our other geographers?
Speaker Change: Yeah.
Katie Patrick: Well, I'll point to the question, but the very fact that this might think as I said on my remarks, I think that you really positioned us well, particularly in Eastern Canada, where you do have a branch network, but we did not previously have any manufacturing capacity. So we're really excited about adding that on to the footprint. Well, please have a strong position across Canada, and that's really all of that stuff.
Speaker Change: Well thanks for the question.
Speaker Change: At this time.
Speaker Change: I think that's really positions us well, particularly eastern Canada, where we do have a branch network.
Speaker Change: Not.
Speaker Change: Previously had any manufacturing capacity. So we're really excited about adding that onto the footprint.
Speaker Change: We have a strong position across Canada, and that's really all that.
Katie Patrick: But you think about our other geography geographies. We do have a good, obviously, another very strong business in Australia. And I think we could continue to look for opportunities for inorganic growth there. As we continue to build in the U.S., I think we will look both for organic and inorganic opportunities there. But we've been relatively successful growing that business from an organic perspective in the United States. So I think we will continue down the track and look for opportunities in Canada and Australia, particularly for acceleration growth.
Speaker Change: What do you think about our other geographies.
Katie Patrick: We do have a good, obviously another very strong business in Australia, and I think we could continue to look for opportunities for inorganic growth there. As we continue to build in the U.S., I think we will look for organic and inorganic opportunities there. But we've been relatively successful growing that bit now.
Speaker Change: We do have good.
Speaker Change: Obviously, another very strong business in Australia and India.
Speaker Change: Look for opportunity GOR.
Speaker Change: There as you continue to build in the U S.
Speaker Change: We will look both for organic and inorganic opportunities there.
Speaker Change: But we've been relatively successful growing that business.
Speaker Change: From an organic perspective.
Speaker Change: So I think we will continue down that track.
Speaker Change: On T V.
Speaker Change: In Canada, and Australia in particular.
Speaker Change: Great.
Rob Hope: Okay.
Rob Hope: Okay, and then maybe more broadly, with the kind of volatility in the global workforce housing market and a smaller size relative to the global space rentals market, how do you prioritize capital between the two businesses? Could we continue to see a more focused global space rentals versus workforce market?
Rob Hope: And then maybe more broadly with the kind of volatility in the global workforce housing. And I guess a smaller size relative to the global space rentals.
Speaker Change: Okay, and then maybe more broadly with the kind of volatility in the global workforce housing.
Speaker Change: And I guess a.
Speaker Change: A smaller size relative to the global space rentals, how do you prioritize capital between the two businesses and.
Katie Patrick: How do you prioritize capital between the two businesses? And, you know, could we continue to see a more focused global space rentals versus workforce? Yeah, we continue to focus on driving that, that we've talked about often: that space business and our needs that we have. It comes mostly from our space rental system. But also from our smaller with first housing project. So when we talk about our, so to speak, the non-based business that's really from those large projects that we've seen in the past that, you know, will come not necessarily in a very reciprocal manner.
Speaker Change: Could we continue to see a more focused global space rentals versus workforce.
Katie Patrick: Yeah, we continue to focus on driving that, as you've talked about often, that base business earnings that we have. They come mostly from our Spain Rentals but also from our smaller group.
Speaker Change: Yeah.
Speaker Change: We continue to focus on driving top.
Speaker Change: The base business.
Speaker Change: I'm, mostly from high speed vessels.
Speaker Change: And also from our smaller with personality.
Katie Patrick: So when we talk about our, so to speak, non-based business, that's really from those large projects that we've seen in the past that, you know, will come not necessarily in a very predictable manner but can be strong benefits for our employees' income. So in terms of ongoing capital allocation, as you say, the priority, as you say, is continuing to build a fleet and continuing to build that base in the spring. You'll see some of the announcements we made this quarter around some of the projects that we're looking at.
Speaker Change: So when we talk about her.
Speaker Change: Non base business, that's really from the large projects.
Speaker Change: We've seen in the past.
Speaker Change: He will call them not necessarily the case.
Katie Patrick: It can be a strong benefit for our interest in the income. So, in terms of the ongoing capital allocation, you know, the priority of the state is continuing to build our fleet and continuing to build that space business. But you'll see some of the announcements. We've made this quarter around a lot of projects that we're looking at.
Speaker Change: It can be strong.
Speaker Change: For the year.
Speaker Change: So in terms of the ongoing capital allocation priority.
Speaker Change: Thank.
Speaker Change: Right.
Speaker Change: But you'll see some of the announcements made this quarter around some of the projects that we're looking at those wouldn't be Vegas housing.
Katie Patrick: Those wouldn't be mega workforce housing projects. We would continue; you know, we would see those part of our space business. And they are very strong contributors to earnings, with the sole pipeline that we continue to have in that area. So, you know, we are, we will target to continue to build a space rental business. But, as the opportunity comes, we look to execute on those workforce housing opportunities as well.
Katie Patrick: Those wouldn't be mega workforce housing projects. We would continue, you know, we would see those as part of our base business. And they are very strong contributors to earnings with a solid pipeline that we continue to have in that area. So, you know, we will target to continue to build a space rental business, but as the opportunities come, look to execute on those 4,000 opportunities as well. Thank you.
Speaker Change: Oh in the continuum.
Speaker Change: These are the kind of broad.
Speaker Change: Isn't it and they are very strong.
Mr. Ernie: Mr. Ernie.
Speaker Change: With a solid pipeline.
Speaker Change: In this area.
Speaker Change: You know we are we will target to continue to build the stage rentals business.
Speaker Change: These costs are booked.
Speaker Change: Hum.
Speaker Change: The broker.
Speaker Change: Can you give yourself.
Rob Hope: Thank you.
Speaker Change: Thank you.
Speaker Change: Yeah.
Operator: Let's conclude the question and answer session.
Colin Jackson: This concludes the question and answer session. I would like to turn the conference back over to Mr. Colin Jackson for any closing remarks.
Speaker Change: This concludes the question and answer session.
Colin Jackson: I would like to turn the conference back over to Mr. Colin Jackson for any closing remarks. Thank you, Andrea. Thank you all for participating today. We appreciate your interest in ATCO Ltd.
Speaker Change: I would like to turn the conference back over to Mr. Colin Jackson for any closing remarks.
Colin Jackson: Thank you Andrea.
Colin Jackson: Thank you all for participating today. We appreciate your interest in ATCO, and we look forward to speaking with you again soon.
Colin Jackson: Thank you all for participating today, we appreciate your interest in Agco and we look forward.
Colin Jackson: We look forward to speaking with you again soon.
Speaker Change: You get there.
Operator: This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.
Operator: This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.
Speaker Change: This brings to a close today's conference call. You may disconnect. Your lines. Thank you for participating and have a pleasant day.
Speaker Change: Okay.
Unnamed: Music Music Music Music Music Music Music Music Music Music Music Music Music Class II Class III Class IV Class V Class VIII
Speaker Change: [music].
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change:
Speaker Change: Uh huh.
Speaker Change: [music].