Q2 2024 North American Construction Group Ltd Earnings Call

Certain material factors or assumptions were applied in drawing conclusions or in making forecast or projections that are reflected in our forward looking information.

Operator: Forecast or projection contained in that forward-looking information. Certain material factors or assumptions were applied in drawing conclusions or in making forecasts or projections that are reflected in the forward-looking information. Additional information about those material factors is contained in the company's most recent management discussion and analysis, which are available on CEDA and EDGAR, as well as on the company's website at nacg.ca. I will now turn the conference over to Joe Lambert, President and CEO.

Joseph Lambert: Good morning, everyone, and thanks for joining our call today. I'm going to start with a few slides showing our Q2 operational performance before handing it over to Jason for the financial overview. And then I'll conclude with our 2024 operational priorities, bid pipeline backlog, and finish up with our updated outlook for this year before taking your questions.

Joseph Lambert: Our Q2 trailing 12-month recordable injury rate remains below our industry-leading target frequency of 0.5. And we continue to advance our safety programs, including timely training on wildfires and air quality and advancements in increasing training, access, and coverage in regards to mental health. It's easy to gloss over this quickly.

Joseph Lambert: But this consistency below a target that few in our industry could hit, even for one year, is one of our most meaningful and proudest achievements. Our workforce hours have grown 340% since the wildfire lows of 2016, and are up 60% from the 2020 pandemic lows. And as we approach the six million annual man hours mark, we continue to maintain our focus to get everyone home safe. Although, as a company, we see this as simply our core value and an inherent moral obligation to our workforce. It's nice to have the hard work and efforts of our employees recognized. And on the following slide.

20, pandemic lows and as we approach the $6 million annual man hour Mark we continue to maintain our focus to get everyone home safe.

Although as a company we see this as simply our core value and an inherent moral obligation to our workforce.

It's nice to have the hard work and efforts of our employees recognize and on the following slide.

Joseph Lambert: You can see we were recently awarded the John T. Ryan National Safety Award, which was presented at this year's CIM in Vancouver. This is the second time we have won this award, and I'm tremendously proud of our workforce and their continued focus on keeping themselves and their co-workers safe. We highlight some of the major achievements of our Q2. Our Australian business continues to deliver strong and consistent results, including McKellar's best monthly result in company history achieved in May and an impressive 10% growth in the quarter from the first quarter of 2024.

You can see we were recently awarded the John T. Ryan National Safety Award, which was presented at this year's CIM in Vancouver.

This is the second time, we have won this award and I'm tremendously proud of our workforce and their continued focus on keeping themselves and their coworkers safe.

On slide five.

We highlight some of the major achievements of our Q2.

Joseph Lambert: Our overall integration is progressing smoothly, with the ERP system planned to go live here in Q3. I visited our Australian operations a few weeks ago and had a chance to see and talk to our employees and leadership teams across Australia, including our McKellar business in Queensland, our Western Plant Hire team in Western Australia, and our DGI team in New South Wales. I also got to meet with some of our key clients, and while our operations integration team's focus and efforts were impressive, the positive feedback from our clients was even more impressive and gives me confidence that we have the solid relationships and clear client-contractor alignment that is key to continued growth and profitability.

Joseph Lambert: On the JV business side, our Fargo-Moorhead flood diversion project is in the midst of its biggest summer construction season, and the overall project has hit 40% completion and remains on plan. After almost a year of poor performance, our NUNA partnership returned to profitability in Q2, and in particular returned to historical monthly margins in June that had not been achieved for almost three years. There is plenty of work still to be done, but we are pleased with the progress and plans the new leadership team at NUNA has made. Our telematic system achieved two miles this quarter. Establishing Initial Mobile Data Infrastructure and Testing in Australia and Advancing System Functionality Across Equipment

Joseph Lambert: On slide six, we show fleet utilization by region. Australian utilization remains strong with consistent high demand and mechanical availability already exceeding our end-of-year utilization target in two of the last four months. In Canada, our utilization suffered in Q1 from fleet mobilization between oil sand sites and lower winter reclamation work, and Q2 brought extensive lost days due to wildfire protocols and abnormal rainfall. While our target of exceeding 85% utilization in Australia is on track, our target range for Canada of over 75% is now planned for early 2025. Some of the improvements to come in Canada will be addition by subtraction.

Joseph Lambert: For example, we had 90 units in the 100-ton truck fleet, of which 50 have been parked for a while. These 50 trucks make up about 3% of our entire fleet but constitute 40% of our park assets. We reallocated 13 of these units to Australia and are actively bidding and expect to win work for about 25 in late Q4 or early Q1. That left 12 trucks. We contacted our main reseller, which is a well-known public company and the largest auction house for big equipment, and they actually had a buyer that was looking for 12 trucks. They were able to make a deal within two weeks.

Our entire fleet, but constitute 40% of our park assets.

We reallocated 13 of these units to Australia and are back and are actively bidding and expect to win work for about 25 in late Q4 early Q1.

That left 12 trucks.

We contacted our main reseller, which is a well known public company and the largest auction house for big equipment.

And they actually had a buyer that was looking for 12 trucks and we're able to make a deal within two weeks.

Joseph Lambert: There were other trucks on the market, and our reseller had loads of recent sales data to confirm our pricing was fair and correct. The units sent to Australia have arrived, and we expect them to start working in late Q3, early Q4, and when the other 25 park units are engaged in newly won work in Q4 or Q1. Then we'll have matched our 100 ton truck fleet to our expected demand, and nothing will be left. With that, I'll hand the call over to Jason for the Q2 financials.

There are other trucks on the market and our reseller had loads of recent sales data to confirm our pricing was fair and correct. The unit Centre, Australia have arrived.

And we expect them to start working in late Q3 early Q4 and one the other 25 park units are engaged and newly won work in Q4 or Q1.

Jason Veenstra: Thanks, Joe. And good morning, everyone.

Jason Veenstra: Starting with slide eight, the headline EBITDA numbers of $87 million and a 26% margin were driven by a third consecutive successful quarter from Australia since the change of control on October 1, 2023. Our overall margin of 26% correlates to the combined gross profit margin of over 18% and illustrates strong operational performance. We included a comment on this slide about our oil sands business, which, although it did not post the top line revenue we had expected, did experience more consistency from Q1 to Q2 than we've historically had. This is due to the nature of the contracts in the oil sands, which are now less seasonal and focused on more steady time, materials, and rental arrangements.

Jason Veenstra: Moving to slide nine, and our combined revenue and gross profit. As we will have seen, for one more quarter, McKellar provided a step change in quarter over quarter variance. On a total combined basis, we were up $52 million quarter over quarter, a very similar mark to Q1, which was up $53 million dollars over 2023. McKellar and DGI, which we combine as Australia in our results, were up $138 million on a steady, consistent quarter, during which McKellar posted an impressive 82% equipment utilization, peaking in May at 88%. This encouraging top-line positive variance was offset by lower equipment utilization in the oil sands region, which was hampered by poor weather conditions in both May and June.

Speaker Change: $38 million on a steady consistent quarter during which mckellar posted unimpressive, 82% equipment utilization, peaking in may at 88%.

Speaker Change: This encouraging top line positive variance was offset by lower equipment utilization in the oil Sands region, which was hampered by poor weather conditions in both May and June.

Jason Veenstra: Our share of revenue generated in Q2 by joint ventures and affiliates was a net $30 million lower than Q2 2023. The Fargo-Moray project had a strong operational quarter, was up $15 million quarter over quarter, and achieved the progress metrics and milestones required of the project schedule. More than offsetting this positive was the variance impact of the completion of the construction project at the gold mine.

Speaker Change: Our share of revenue generated in Q2 by joint ventures, and affiliates was a net $30 million lower than Q2 2023. The Fargo Moorhead project had a strong operational quarter was up $15 million quarter over quarter and achieve the progress metrics and milestones required of the project schedule.

Speaker Change: More than offsetting this positive was the variance impact of the completion of the construction project at the gold mine.

Jason Veenstra: Unknown Attendee, Aaron MacNeil, Tim Monachello, Maxim Sytchev, Yuri Lynk, Rahul Malhotra, Combined gross profit margin of 18.3% includes a one-time loss on Equipment Disposal and was 19.6% when adjusting for that transaction. Gross profit margins benefited both from the operations in Australia, which were higher than 20% in the quarter, and from ML Northern, whose fleet lower Despite lower than expected revenue, the Canadian fleet posted solid margins while managing costs during the operationally difficult months of May and June.

Speaker Change: In northern Ontario in Q3, which led to much lower quarter over quarter revenues within the <unk> group of companies.

Speaker Change: Combined gross profit margin of 18, 3% includes a onetime loss.

Speaker Change: On equipment disposal.

Jason Veenstra: Moving to slide 10, Q2 EBITDA beat the previous record by 70% as a result of the McKellar acquisition. As mentioned, the 26% margin we achieved reflects an effective operating quarter and is indicative of where we see our business operating following two quarters where we posted 25 and 27% margins. Included in EBITDA is general and administrative expenses, which were $12.8 million in the quarter and equivalent to 4.6% of revenue, which is slightly over the 4% threshold we've set for ourselves. The percentage overage is due in equal parts to lower revenue as well as some higher accounting and legal costs associated with the McKellar acquisition.

Jason Veenstra: Going from EBITDA to EBIT, we expensed depreciation equivalent to 12.2% of combined revenue, which reflected the depreciation rate of our entire business, including the equipment fleet at the Fargo-Moorhead project. When looking at just the wholly owned entities and our heavy equipment in Canada and Australia, the depreciation percentage for the quarter was 14.3% of revenue, and generally consistent with the Q1 2024 rate of 14.8%. Adjusted earnings per share for the quarter were 78 cents.

Speaker Change: In our heavy equipment in Canada, and Australia, the depreciation percentage for the quarter was 14, 3% of revenue and generally consistent with the Q1 2024 rate of 14, 8%.

Speaker Change: Adjusted earnings per share for the quarter of 78.

Speaker Change: Identical to Q1.

Jason Veenstra: Similar to Q1, was $0.31 up from Q2 2023, given all the positive factors previously mentioned, but offset by the impact of higher acquisition-related interest rates. The average interest rate for Q2 was 7% and remains a compelling indicator for us as we look to pay down debt in the back half of 2024. Moving to slide 11, net cash provided by operations prior to working capital of $69 million was generated by the business, reflecting EBITDA performance net of cash interest paid.

Speaker Change: Was 31.

Speaker Change: <unk>.

Speaker Change: From Q2 2023, given all the positive factors previously mentioned, but offset by the impact of higher acquisition related interest.

Speaker Change: The average interest rate for Q2 was 7% and remains a compelling indicator for us as we look to pay down debt in the back half of 2024.

Speaker Change: Moving to slide 11, net cash provided by operations prior to working capital of $69 million.

Speaker Change: Was generated by the business, reflecting EBITDA performance net of cash interest paid.

Jason Veenstra: Free cash flow usage of $2 million was driven by another $10 million draw on working capital accounts and $18 million spent on capital work and programs. Moving to slide 12, net debt levels ended the quarter at $833 million, an increase of $52 million in the quarter due to growth assets purchased, as well as the change in the Australian exchange rate. Of the $833 million, $419 million, or roughly half, is denominated in Australian dollars but is naturally hedged with the heavy equipment assets we own in Australia.

Speaker Change: Free cash flow usage of $2 million was driven by another $10 million draw on working capital accounts.

Jason Veenstra: Net debt and senior secured debt leverage ended at 2.2 times and 1.7 times, respectively, and remain reasonable levels nine months after a transformative debt-funded acquisition and halfway through a year for which free cash flow generation is expected in the second half. With that, I'll pass the call back to Joe.

Joseph Lambert: Turn to slide 14. Our priorities for this year are unchanged. We continue to progress the overall McKellar integration as planned, with ERP go live scheduled for the end of Q3. Several projects to improve operational reporting and management systems are being implemented in the second half of the year, with those requiring ERP system data scheduled later in Q4. The timing of these systems improvement plans coincides with further growth and additional assets coming from Canada, and we remain confident that McKellar will be fully integrated heading into what we believe will be its best year ever, with continued opportunities to grow the business in 2024.

Joseph Lambert: The second half of the year continues to include plans to win a large-scale mining or civil construction project to provide work for our remaining underutilized assets and also to qualify with our partners on a major infrastructure project, which we believe could provide a smooth transition as our current major infrastructure project in Fargo, North Dakota, ramps down in a few years. We have already submitted tenders and have additional active tenders soon to be submitted that give us confidence in winning and qualifying for this award.

Joseph Lambert: We continue to advance our maintenance systems and processes to increase our uptime and achieve utilization targets. As mentioned earlier, our Australian business looks to achieve equipment utilization targets earlier than planned, with Canadian targets planned for Q1 2025. We may still achieve the 75% Canadian target in the month of December, if successful, winning a larger share of reclamation work than last winter. And the potential to do that is improved, as this year's reclamation volumes being tendered have increased significantly year over year.

Joseph Lambert: The final priority of returning NUNA to profitability and operational excellence advanced meaningfully, with Q2 demonstrating a return to profitability and June, in particular, demonstrating a return to historical EBIT margin. The second half of the year at Nuna will be focused on driving consistency across the business and winning work for 2025. Moving to slide 15.

Joseph Lambert: Our bid pipeline remains robust, and we more than replenish the bidding opportunities lost or deferred. Our oil sands opportunities include our annual oil sands heavy civil regional services contract for 2025, which, on initial review, appears to be about the same level of demand with slightly lower unit rate work being offset with increased large truck and shovel rent. We also received several reclamation tenders in the oil sands in Q2 that we will bid this quarter that show a meaningful increase in volume, as mentioned previously, and also some year-round projects for this work that is typically only done in winter conditions.

Joseph Lambert: We have several active bids in the oil sands regions, including one which we submitted in Q2, but have not closed yet. These bids include the large stream diversion construction project that I mentioned on the Q1 call. This project is a large civil construction project for an existing client and is expected to be awarded in Q3. Outside of oil sands, we continue to see improved demand from the resource market, including a good-sized tender for an expansion of British Columbia copper mines. Australian opportunities and strong demand for heavy equipment continue to grow.

Speaker Change: Construction project for an existing client and is expected to be awarded in Q3.

Speaker Change: Outside of oil Sands, we continue to see improved demand from the resource market, including a good sized tender for an expansion of our British Columbia copper mine.

Speaker Change: The Australia opportunities and strong demand for heavy equipment continue to grow we continue to see new and expanding operations seeking contractor equipment in Queensland, and New South Wales, metallurgical and thermal coal markets and are now regularly receiving contract mining and equipment rental opportunities in copper gold silver.

Joseph Lambert: We continue to see new and expanding operations seeking contractor equipment in the Queensland and New South Wales metallurgical and thermal coal markets and are now regularly receiving contract mining and equipment rental opportunities in copper, gold, silver, and iron ore. We continue to expect to win one or more major contracts outside of oil sands this year, which we expect will provide a clear path for reallocating our remaining underutilized fleet in 2020, on slide 16. Our backlog stands at $2.8 billion.

Speaker Change: And iron ore.

Speaker Change: We continue to expect to win one or more major contracts outside of oil sands. This year, which we expect will provide a clear path. We're reallocating our remaining underutilized fleet in 2025.

Speaker Change: On slide 16.

Speaker Change: Our backlog stands at $2 8 billion.

Speaker Change: We expect our backlog build in late Q3, or early Q4 of contract awards and Canadian oil Sands Australian coal and other resource markets in both countries.

Joseph Lambert: We expect our backlog to build in late Q3 or early Q4 off contract awards in Canadian oil sands, Australian coal, and other resource markets in both. Slide 17 details our updated outlook for 2024, and represents an essentially unchanged outlook for EBITDA and EPS in the second half of the year combined with actuals for the first half. We expect Q4 to be better than Q3 in 2025 to continue the upward trend as we get full-year contributions from our 2024 growth cap.

Speaker Change: Slide 17 details our updated outlook for 2024.

Joseph Lambert: Although I'm disappointed we could not offset the operational interruptions incurred in the first half of the year, I can assure you the NACG team is focused and motivated on delivering strong results. And when you look at the implied Q4 financial estimates and add on to that the 2024 growth capital full year impact to 2025. It should be fairly straightforward to see what generates my optimism moving forward and my eagerness to do the work we have in front of us. With that, I'll open up for any questions you may have.

Operator: Thank you. To ask a question, please press star 1 on your touch telephone. If you wish to withdraw your question, you can press the pound sign. Once you have completed your questions and would like to return to the queue, please press star 1. After a brief pause, we'll begin the Q&A section. The first question comes from Yuri Lyn, from "Can I call you Genity?". Your line is open, please go ahead.

Speaker Change: Your line is open. Please go ahead.

Speaker Change: Hey, good morning, guys.

Eric: Good morning, Eric.

Yuri Lynk: Joe, just to clarify, does the guidance for the back half of the year require you to win one of the... XOILSANS awards that you're targeting, or that's more going to bolster 2025?

Speaker Change: Joe just to clarify does the guidance for the back half of the year.

Speaker Change: Require you to to win one of the.

Speaker Change: Ex oil Sands awards, but.

Speaker Change: That you're that you're targeting or that's more going to bolster 2025.

Joseph Lambert: More 2025. We don't have them forecasted in. There's some potential that we get some early reclamation work in Q4, but that's not what's in the forecast.

Joe: Hi, it's more 2025, we don't have them forecasted in there there's some potential that we get some early reclamation work in Q4, but that's not what's in the forecast.

Speaker Change: Okay, and you know the how how has the bid funnel kind of shifted around the last few months I see theres, a large oil sands extension.

Yuri Lynk: Okay. And, you know, how has the bid funnel kind of shifted around the last few months? I see there's a large oil sands extension in there that's included in early 2025. I know you were chasing some work in Ontario. Just maybe a quick update on what's new and what's kind of dropped out of the bid funnel.

Speaker Change: And there that's included and early 'twenty twenty-five I know you were chasing some working in Ontario, just maybe a quick update on on what's new and what's kind of dropped out of the bid funnel.

Joseph Lambert: Yeah, there were three projects in Ontario we were bidding on, and we were actively bidding. The one really big one and two smaller ones. One of the smaller ones we were unsuccessful on. That's the one that came off of that.

Speaker Change: Yeah, there was a three projects in Ontario, we were bidding and we're actively bidding them.

Speaker Change: One really big one and two smaller ones I'm one of the smaller ones we were unsuccessful on.

Speaker Change: That's that's one that came off of that.

Joseph Lambert: We've received some increased interest in a couple of other opportunities. I think what I would say is, outside of oil sands, we pretty much added to the bid pipeline from what was either lost, awarded, or deferred. And inside of the oil sands, we have a lot of active tenders with the regional contract and then winter reclamation. During the quarter Q2, I'd say we'd originally anticipated a bit more summer civil construction for smaller equipment. And it was really slow on that front. There was very little work that was done this summer in the oil sands for civil construction.

Yuri Lynk: Okay, last one for me, just on the write-down of the assets held for sale, are those the 12 trucks that were auctioned off? And can you just confirm that that 4 million is in your adjusted EBITDA, i.e., if we were to add that back, you'd be more around $91 million.

Joseph Lambert: Yeah, we confirm those are the trucks. But no, it is has already been added back as part of the from reported to adjusted earnings, so it's already in the 87. And those were the 110 trucks I was talking about, Yuri.

Joseph Lambert: And those were the hundred ton trucks I was talking about with Yuri. So, you know, unfortunately, that particular asset class is just a [inaudible]

Aaron MacNeil: Thank you. Our next question comes from Aaron MacNeil from PD Kovan. Your line is open. Please go ahead.

Aaron MacNeil: Hey morning. Thanks for taking my question. Joe, just a follow-up to Yuri's question. You mentioned Canada hitting the utilization target by early 2025. I know you walked through the, you know, the equipment transfers, the sales, the, you know, the bids, but, Do you expect to hit that target just seasonally or on an annual basis, and do you need to win that additional work to hit that target?

Joseph Lambert: We expect to hit it annually starting in 2025. We originally thought we'd get there by the end of this year, pretty much in Q4.

Joseph Lambert: Because we do start, we're seeing, as you saw in Jason's comments, we're starting to get a bit more normalized in the oil sands. The seasonality of oil sands was the smaller assets, and those are the underutilized ones that were moving out. So a lot of that goes away as those assets go away. You know, I'll give you an example.

Joseph Lambert: Several of the 110 trucks we moved to Australia were in water truck configuration, so they had a big water tank on the back of them. Those trucks only get used for six months in Canada, but they get used year-round in Australia. So those are some of the things that, although there's a bit of timing and getting stuff over, it will start to normalize the quarters, and you'll see more consistency in both utilization and revenue between quarters in oil sands.

Aaron MacNeil: And do you need those those additional hours of work to get there? Bye.

Joseph Lambert: Whether it's in the oil sands or somewhere else, we need to work for those smaller assets, or, worst case scenario, we need to get rid of some.

Speaker Change: Worked for those smaller assets or worst case scenario, we need to get rid of some more.

Speaker Change: Got it okay.

Aaron MacNeil: That's helpful. Jason, obviously, there are some debt maturities in 2026. I can appreciate most of it's the credit facility, but you've got the converts in there too. Unknown Attendee, Aaron MacNeil, Tim Monachello, Maxim Sytchev, Yuri Lynk, Rahul Malhotra, So, you know, I guess what sort of capital allocation priority into 2025 and what sort of things are in your job jar over the next six to 12 months as you think about planning the capital structure.

Speaker Change: That's helpful.

Speaker Change: Jason.

Speaker Change: Obviously, some debt maturities in 2026.

Speaker Change: I appreciate most of its the credit facility, but you've got the converts in there too.

Speaker Change: Give up that the exit leverage guidance with the quarter you did the mckellar transactions. So.

Speaker Change: Yes.

Speaker Change: The capital allocation priority into 2025, and what sort of in your job jar over the next six to 12 months as you think about planning the capital structure.

Speaker Change: Yeah, obviously free cash flow is is paramount.

Jason Veenstra: Yeah, obviously, free cash flow is paramount. We've broadcast or communicated that free cash flow is coming in the second half and that, you know, that will increase liquidity. We clearly have the liquidity available to us already as far as dealing with the convertible debentures if required. And yeah, we're in the routine of extending our credit facility every year, so keeping it three years out in the future. So those are kind of the key focuses, but we'll continue to look at alternatives. But the basic plan is to move the credit facility ahead one more year in this calendar year and then keep tracking the debentures. No, it makes sense.

Speaker Change: Broadcast or we've communicated that free cash flow is coming in the second half in that.

Speaker Change: That will increase our liquidity, we clearly have the liquidity available to us already as far as dealing with the convertible debentures if required.

Speaker Change: And yes, we're in the we're in the routine of extending our credit facility every year, so keeping it three years out in the future.

Speaker Change: So those are kind of the key focuses but we'll continue to look at.

Speaker Change: Alternatives, but based plan as a <unk>.

Speaker Change: The credit facility ahead, one more year.

Speaker Change: In this calendar year, and then keep tracking the debentures.

Aaron MacNeil: I'll

Aaron MacNeil: No, that makes sense. I'll turn it back. Thanks, guys.

Speaker Change: Okay.

Speaker Change: Makes sense I'll turn it back thanks, guys.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: Thank you. Our next question comes from Adam Thalheimer from Thompson Davis. Your line is open. Please go ahead.

Adam Thalheimer: Hey, good morning, guys.

Speaker Change: Yeah.

Unknown Attendee: Uh, hey Joe, you said you were surprised by the amount of winter reclamation work in the Bell Sands. Can you just expand on that?

Speaker Change: Hey, Joe You said you were surprised by the amount of winter reclamation work in the oil Sands can you just expand on that.

Joseph Lambert: Yeah, you know, we usually get the tenders, the RFPs, for winter reclamation about this time, and we have several of them. We've submitted some, actually, and there are some that are still to be submitted.

Speaker Change: Yeah.

Joseph Lambert: And just the volumes, overall volumes we see, because you basically get tenders from everybody, so you know what the whole..., because it's easier to remove when it's frozen. And this year, there's some high ground, which is more sandy soils, which we think could be done year round. So there are some opportunities to get some more month-to-month stability and some of that reclamation work with some of the bids that are out there.

Unknown Attendee: And what's the, did you ever break out an EBITDA contribution anticipated from the trucks that you sent to Australia once they got to work?

Jason Veenstra: I don't have a memorizer, I don't know if Jason does. We do have that. Yeah, I would put it at about $5 million in Q4. So, you know, meaningful, you know, and at good margins, so incremental margins. So that, I don't know if we've broadcast that in our MD&A, but I would, I would put that at about $5 million, Adam.

Speaker Change: So that I don't know if we've.

Speaker Change: Broadcast that in our in the MD&A, but.

Speaker Change: Put that at about $5 million item.

Unknown Attendee: Great. Last one for me, the truck, the 12 trucks you sold, was that in Q2 or Q3... Three, and what were the pros?

Speaker Change: Great.

Speaker Change: Last one from me the trucks. The 12 trucks you sold was that in Q2 or Q.

Speaker Change: Three and what were the proceeds.

Jason Veenstra: Yeah, it's a good question. The proceeds came in early July, so it was reflected in Q2 financials, but the free cash flow of that $8 million will come in... Q3.

Speaker Change: Yeah. That's a good question proceeds came in in early July so it was.

Speaker Change: Reflected in Q2 financials, but the free cash flow of that $8 million will come in in Q3.

Speaker Change: Perfect. Okay. Thanks, guys.

Unknown Attendee: Perfect. Okay. Thanks, guys.

Speaker Change: Okay.

Speaker Change: Thank you. Our next question comes from Tim on a shallow from ETP capital market. Your line is open. Please go ahead.

Tim Monachello: Thank you. Our next question comes from Tim Monachello from ATB Capital Market. Your line is open. Please go ahead.

Speaker Change: Hey, good morning, everyone. Good.

Tim: Morning, Tim.

Speaker Change:

Joseph Lambert: Could you talk a little bit about the utilization of the oil sands fleet so far in Q3? Have you seen a nice uptick there?

Tim: Could you talk a little bit about utilization of the Oilsands fleet, so far in Q3, and you've seen a nice uptick there.

Speaker Change: But certainly from the low point Q2, yeah.

Joseph Lambert: But certainly from the low points of Q2, yes. You know, I think we're projecting somewhere in the low 60s.

Tim: You know I think where we're projecting somewhere in the low sixty's.

Speaker Change: At.

Joseph Lambert: It, you know, May, May in particular, June wasn't great, but May was probably the worst month since the wildfires of 20,000, 2016. You know, we started the month with a week's worth of fire and evacuations in Fort McMurray, which were remnants of the May fires of 2016. But thankfully, they only lasted a week in that case, because we got some great rain after that. Unfortunately, you know, great for the fires, but unfortunately for the rest of the operations, it rained for the bulk of the remaining part of the month of May, so we had double our rainfall. You know, just some. Unusual weather events in this particular quarter.

Speaker Change: You know me.

Speaker Change: May in particular June wasn't great, but may was probably the worst month since.

Speaker Change: The wildfires of 'twenty two.

Speaker Change: 2016.

Speaker Change: You know we started the month with a with a week's worth of.

Speaker Change: The fire and evacuations in Fort Mcmurray, which were remnant of the may fires in 2016, and but thankfully only lasted a week in that case, because we got some great rain after that unfortunately, great for the fire has been unfortunate for the rest of the operations it rained.

Speaker Change: For the bulk of the remaining part of the month of May So we got double of rainfall.

Speaker Change: Just some.

Speaker Change: Unusual weather events are in the particular quarter there.

Speaker Change: Okay. That's helpful and then.

Tim Monachello: Okay, that's helpful. And then the MD&A mentioned some skull production for overburn removal at Four Hills and Syncrude. Can you elaborate on that? Is that, I guess, an expectation going forward? Is that sort of a Q2, specific impact, or how should we be thinking about your go-forward role at Fort Hills and Syncrude compared to what it was under the old contract?

Speaker Change: The MD&A mentioned, some scope productions for overburden removal at Fort Hills and Syncrude.

Speaker Change: Can you elaborate on that is that I.

Speaker Change: Yes.

Speaker Change: And expectation going forward is that sort of a Q2.

Speaker Change: Specific impact or how should we be thinking about your.

Speaker Change: Your Gulf or rule.

Speaker Change: Fort Hills, and Syncrude compared to what it was under the old contract.

Joseph Lambert: Yeah, I'm not sure I follow Tim; I didn't catch the first part.

Tim Monachello: Oh, just in the MD&A, it said that one of the reasons for the weakness in Q2 was skill production for overburden removal at Fort Hills and St. Cruz. So I'm just curious, you know, what your expectation is for activity at those two sites is compared to what it would have been under your previous contract.

Joseph Lambert: Yeah, you know, I think we mentioned the reallocation fleet during Q1. When we look at the overall overburdened agreement, which is called the heavy civil regional services contract now, that covers five mine sites that are managed by one client, Year on year, we just got the RFP in, but the initial volumes look very similar to what was awarded this year, with a slight change in that there was a unit rate overburden bid at two different sites last year, and the rest was bid as rental agreements for trucks and shovels.

Joseph Lambert: And this RFP only has unit rate work at one site, but it has more rental volumes. So it looks like they're switching one of the sites from unit rate work to rental hourly, but the overall dollars look about the same. I actually think this gives us an advantage because the one site with remaining unit rate work is the site we're at doing that unit rate work right now.

Speaker Change: It's an advantage because the one site with remaining unit rate work as the site. We are at doing that unit rate work right now.

Speaker Change: Okay understood.

Tim Monachello: Okay, we're set. Unknown Attendee. Thank you. Thank you. Can you talk a little bit about your consolidated EBITDA expectations in terms of the split between Q3 and Q4?

Speaker Change: Can you talk a little bit of both.

Jason Veenstra: I just did Q4 slightly higher than Q3.

Speaker Change: Consolidated EBITDA expectations in terms of the split between Q3 and Q4.

Speaker Change: Yeah.

Speaker Change: I've, just said Q4 slightly higher than Q3.

Speaker Change: Okay, and then the suite.

Tim Monachello: Okay, good job. And then the last three, sorry.

Speaker Change: Sorry.

Joseph Lambert: No, that's his own hand. Say it, it's just, it's like... Slight increase in Q4 from Q3.

Speaker Change: No that's it on handsets.

Speaker Change: Slight increase in Q4 from Q3.

Tim Monachello: Okay. And then in terms of free cash flow, I mean, QCOR has always been a pretty big free cash flow corridor that you're expecting, a pretty substantial uptick in free cash in the second half of the year. Is that the expectation that it's going to be heavily weighted to Q4? Or is Q3 also going to be expected to be a fairly substantial free cash quarter?

Speaker Change: Okay.

Speaker Change: And then in terms of free cash flow I mean, Q4 is always been a pretty.

Speaker Change: A pretty big free cash flow.

Speaker Change: Quarter, but youre expecting.

Speaker Change: Pretty substantial uptick in free cash in the second half of the year is that the expectation that it can be heavily weighted to Q4 or Q3 also gonna be expected to be a fairly substantial free cash quarter.

Jason Veenstra: I believe we will have a slight pause in Q3, but almost everything comes in in Q4.

Speaker Change: I believe we have a slight positive in Q3, but almost everything comes in in Q4.

Speaker Change: Okay.

Tim Monachello: That's all for me. Thanks very much, guys. All right. Thank you.

Speaker Change: That's all for me thanks, very much guys.

Ken: Thanks, Ken.

Speaker Change: Yeah.

Speaker Change: Okay.

Unknown Attendee: Our next question comes from a private investor, Ateem Kumar. Your line is open. Please go ahead.

Speaker Change: Our next question comes from a private investor.

Speaker Change: Kumar Your line is open. Please go ahead.

Speaker Change: Okay.

Unknown Attendee: Hi Joe, Jason, good morning. My name is Ibrahim.

Glenn: Hi, Joe Jason Good morning, My name is Glenn came a couple of questions.

Speaker Change:

Speaker Change: When the Mechel or acquisition was announced last year do you have a slide up with the free cash flow impact.

Speaker Change: You know with the claim 23 combined outlook how did you mean the acquisition was completed in Q4.

Speaker Change: Although free cash flow of 100 to 120 million and then there was another one which showed the incrementally.

Speaker Change: Impact.

Speaker Change: In 'twenty 'twenty four with the acquisition of our Mckellar, no incremental impact to free cash flow of about 55 to 75 million.

Unknown Attendee: I have a couple of questions. So, you know, when the Mekiler acquisition was announced last year, you had a slide up with the free cash flow impact of the 2023 combined outlook, assuming the acquisition was completed in Q4 with a free cash flow of $100 to $120 million. And then there was another one which showed the incremental impact in 2024 with the acquisition of Mekiler, you know, the incremental impact of free cash flow of about $55 to $75 million. So, I just wanted to ask, you know, how is that estimate holding true with the acquisition, you know, in terms of free cash flow generation for Australia?

Speaker Change: So I just wanted to ask you know how is so far.

Speaker Change: Is that.

Speaker Change: Estimate holding true with the acquisition of you know.

Speaker Change: In terms of free cash flow generation for Australia.

Joseph Lambert: Yeah, what I would say is that, you know, this is the third quarter post-acquisition of McKellar, and they pretty much exceeded, slightly exceeded all expectations financially every quarter. So I don't think we've actually, I don't know of a metric that's down from what we forecasted for McKellar since we projected those in July when the acquisition was announced.

Speaker Change: Yeah, what I would say is that you know this is the third quarter post acquisition Mckellar and they pretty much exceeded slightly exceeded.

Speaker Change: All expectations financially every quarter. So I don't think we've Oh I think we we've actually overall I I don't know of a metric that's down from what we forecasted them for mackellar.

Speaker Change: Since our since we projected those in July one when the acquisition was announced.

Speaker Change: Okay perfect no. That's that's good to hear the other question I had is on the equipment utilization so for the Canadian.

Unknown Attendee: Okay, perfect. No, that's good to hear.

Unknown Attendee: The other question I had is on equipment utilization. So, for the Canadian fleet, it ended Q2 at 42%. The target is 75%. Maybe, can you expand on the difference between the target of 75 and 42? You know, how much of that maybe is due to the weather conditions, the fire, and Unknown Attendee, Aaron MacNeil, Jacob Bout, Jason Veenstra, Sean Jack, Phil Goodrich,

Speaker Change: And feed them. It ended Q2 at 42% the target to 75% maybe can.

Speaker Change: Can you explain on the difference from the target of 75 to 42, you know how much of that maybe is due to the weather conditions that fire and.

Speaker Change: The rain and also.

Speaker Change: The reduction in the orbit and scope export to this outbreak by Suncor.

Speaker Change: Maybe can you give a breakdown is halfway to understand how much of that a reduction in overburden scope is affecting utilization.

Joseph Lambert: I mean, I don't have the exact numbers, but I can make a pretty good guess, Prim, in that if you just look at what we're expecting in Q3 and Q4 from Q2, it's about a 20% increase. I would say the weather and the fires in Q2 were probably around a 20% impact on our utilization. And then when we look at how we're going to get from that 60s, low 60s, to 75 by Q1 next year, it's both we think there's some increased demand for winning some work outside of oil sands.

Speaker Change: I mean, I don't have an exact number is but I get a pretty good guess prim and that if you just look at what we're expecting in Q3 and Q4 from Q2, its about a 20% increase.

Speaker Change: So I would say the weather and the fires in Q2, where we're we're probably around a 20% impact on our utilization.

Speaker Change: And then when we look at how we're going to get from that Sixty's low sixties to 75.

Speaker Change: By Q1 next year, it's it's both we think Theres some increased demand in winning some work outside of oil sands and the other side of that is reallocating.

Joseph Lambert: And the other side of that is reallocating or even selling some assets like we did this quarter. And that's kind of that addition by subtraction I was talking about in the slides there. So those are the two major parts of it. And that 20% difference in Q2 is all about weather.

Speaker Change: Or even selling some assets like we did this quarter and that's that's kind of that addition by subtraction I was talking to are in the slides. There. So those are the two major major parts of it and and that's that 20% difference in Q2 as is all about weather.

Speaker Change: Okay perfect.

Unknown Attendee: Perfect. Thank you for that.

Speaker Change: Thank you for that and then.

Speaker Change: My question around the utilization so if I just look at the slide I'm on slide six.

Speaker Change: TV.

Speaker Change: The target for Canada, 75, and you know like and then we haven't hit that utilization target consistently.

Speaker Change: Hmm.

Speaker Change: You know in wireless like all the way into 2021 and then even if I look further back into late 2015.

Speaker Change: There, maybe a couple of quarters.

Unknown Attendee: And then my question around utilization. So if I just look at slide six on utilization, the target for Canada is 75. And, you know, like, and then we haven't hit that utilization target consistently, that's the 75% target? And then, kind of like, similarly, if I look at the Australian utilization, too, it's at 85%. I look at the graph; we've hit that maybe twice in the last three years. So how confident is the team on hitting that target consistently, and is the target consistent?

Speaker Change: 2019 that we have.

Speaker Change: Maybe just 70%, but not so many <unk>. So I'm just curious on like how confident are you in that target of 75% of I was hitting that consistently what is that target mostly like you know two quarters are not here yet if you hit that that that's about 75% target and then kind of like.

Speaker Change: Similarly for if I look at the Australian utilization to its at 85% if I look at the graph.

Speaker Change: We've hit that maybe twice in the last.

Speaker Change: A three three years.

Speaker Change: So how confident.

Speaker Change: Is the team on hitting that target consistently and here's the target consistent.

Speaker Change: Yeah, I mean, that's a big question I'll tell you and tell you how it works overall, though and splitting it into countries like.

Joseph Lambert: Yeah, I mean, that's a big question. I'll tell you how it works overall, though, and splitting it into countries, like, just starting with Australia versus Canada, it's really two, two, two factors that play into this. And it's obvious that you have to have demand first before you have utilization. So if you have strong demand, then your utilization is basically functioning off of your maintenance and your mechanical availability.

Speaker Change: Just starting with Australia versus Canada.

Speaker Change: It is this is really too.

Speaker Change: Two factors that play into this and it's.

Speaker Change: Obviously, you have to have demand first before he of utilization. So we've got strong demand than your utilization is but it is basically functioning off of your maintenance and your mechanical availability.

Joseph Lambert: So Australia starts with a benefit. Unknown Attendee, Aaron MacNeil, Tim Monachello, Joseph Lambert, Kevin Gainey, Yuri Lynk, Rahul. The big difference between Australia and how they've gotten there and what they're doing is they've had extremely strong, consistent demand from their clients and long-term commitments and five-year contracts.

Speaker Change: So, Oklahoma, Australia starts with the with with a benefit.

Speaker Change: Just in weather and the fact that they can operate them.

Speaker Change: More more days of the year unaffected by weather than we can in Canada as we had exaggerated in Q2, but you know the.

Speaker Change: The Big difference is in in Australia, and how they've gotten there and what they're doing is they've had extremely strong consistent demand from their clients and long term commitments and five year contracts.

Joseph Lambert: So that everything else is really in their hands, which is the mechanical availability. And that's why we're already able to get up into that range twice in the last four months. You know, in Canada, our demand wavered. We saw a change in demand, especially for our smaller assets, starting last year and probably going back even further than that.

Speaker Change: So that everything else is really in their hands, which is the mechanical availability and that's why we're already able to get up into the into that range two of the last four months.

Speaker Change: In Canada, our demand waiver.

Speaker Change: We saw a change in in in demand, especially in our smaller assets.

Speaker Change: Starting.

Speaker Change: Last year and probably.

Joseph Lambert: So, you know, we need to get the fleet reallocated such that the demand matches the supply. And then it's up to us on the mechanical availability side to maintain it to achieve that 75%. And we see that opportunity in Q1 of next year. In other words, you know, right now we continue to have more assets in the oil sands, and we have demand that needs them. But we're reallocating those, and we believe with winter work in oil sands or other potential resources to bid for wind outside of oil sands or in Australia, we believe that demand is going to match our fleet sizing, kind of like I used the example of the 100-ton trucks in the presentation earlier. We see that happening in Q1 of next year.

Speaker Change: Going back even further than that so.

Speaker Change: We need to get the fleet reallocated such that the demand matches the supply and then it's up to us on a mechanical availability side that we can maintain it to achieve that 75% and we see that opportunity and in Q1 of next year in other words.

Speaker Change: Right now we continue to have more assets in oil sands, and we have demand they need them.

Speaker Change: But we're reallocating knows and we believe with winter work in oil sands or other potential resource bid wins outside of oil sands or in Australia. We believe that demand is going to match our fleet sizing.

Speaker Change: I use the example of the 100 ton trucks and in the.

Speaker Change: The presentation earlier.

Speaker Change: We see that happening in Q1 of next year.

Joe: Okay. Thanks, Joe.

Unknown Attendee: Thanks, Joe. I had one last question.

Joe: The last question.

Unknown Attendee: So, I was really happy to see the total return swaps that the company has taken. About 213,000 shares are about $6 million worth. I'm just curious, what's stopping the company from, you know, going harder at these wonderful prizes? Clearly, you've mentioned in your letter as well that it's... Unknown Attendee, Aaron MacNeil, Tim Monachello, Jason Veenstra, Joseph Lambert, Kevin Gainey, Can you maybe comment on that, on why it's at just 6 million?

Speaker Change: So I was really happy to see the total return swaps that the company has taken about 213.

Speaker Change: <unk> thousand shares or about $6 million loss.

Speaker Change: Just curious what's stopping them from going harder. These wonderful appraisers clearly you've mentioned in your letter as well that it's stock.

Speaker Change: The stocks below the intrinsic value.

Speaker Change: Is that more liquidity it like I did understand from a you know NCI be perspective that we need to pay down debt, that's understandable, but for the Trs I was hoping maybe the company would go up.

Speaker Change: You know a little bit more deeply into the amount of shares that no.

Speaker Change: You have it yeah that's on.

Speaker Change: Can you maybe comment on them on that.

Speaker Change: On lights at just $6 million.

Joseph Lambert: Yeah, Prim, I think the best correlation I can give you for that is if you look at our free cash flow, our aggressiveness coincides with our free cash flow. So I don't think we're in a situation where we'd go out and get debt to conduct an NCIB. The total return swap is something we can do without pulling cash out of our pockets. And, you know, in the second half of the year, as our cash flow comes in, I believe you'll see us being a lot more aggressive on that.

Speaker Change: Yeah, I think if that's the best correlation I can give you for that is if you look at our free cash flow.

Speaker Change: Or aggressiveness coincides with our free cash flow so.

Speaker Change: You know I don't think we're in a situation, where we'd go out and get debt to conduct an NCI be.

Speaker Change: The total return swap with something we can do without pulling cash out of our pockets.

Speaker Change: And you know in the second half of the year as our cash flow comes in I believe you'll see us being a lot more aggressive on that front.

Speaker Change: Okay perfect. Thank you and appreciate the opportunity to ask questions. Thank you. Thank you for them.

Unknown Attendee: Perfect. No, thank you, and I appreciate the opportunity to ask questions. Thank you.

Speaker Change: Okay.

Speaker Change: The next question comes from Maxim C Chess from National Bank Financial Your line is open. Please go ahead.

Maxim Sytchev: The next question comes from Maxim Sytchev from National Bank Financial. Your line is open. Please go ahead.

Speaker Change: Hi, good morning, gentlemen.

Maxim Sytchev: Most questions have already been asked, so I just have two kinds of small clean-ups. In terms of an ERP implementation, Jason, do you mind maybe talking about the potential benefits and how should we be thinking about that on a prospective basis?

Speaker Change: Most questions have been already asked so I'll just have to kind of smoke.

Speaker Change: In terms of.

Jason: ERP implementation, Jason joined maybe talking about the potential benefits and how should we be thinking about that on perspective basis.

Speaker Change: Yeah, we see it coming through in both G&A and potentially an operating margin so.

Jason Veenstra: Yeah, we see it coming through in both G&A and potentially in operating margins. So, you know, we've guided people to kind of a 1% improvement on an EBITDA basis in 2025. It's no one single silver bullet that is going to drive that. But you know, we see improvements in back office processes, as well as better tracking on sites of inventory, work in the shops, and just overall better tracking of costs and accountability. You know, it likely won't show up in Q4 results, that would be premature, but we expect it to be in our 2025 outlook.

Speaker Change: We've guided people that kind of a 1% on EBITDA basis.

Speaker Change: Movement in 2025.

Speaker Change: It's no one single silver bullet that that is going to drive that but we see improvements in back office processes.

Speaker Change: As well as better tracking on sites of inventory work in the shops.

Speaker Change: And just overall.

Speaker Change: Our tracking of costs and accountability so.

Speaker Change: You know it likely doesn't show up in Q4 results are that'd be premature, but we expect it to be in our 2025 outlook.

Maxim Sytchev: Okay, and then, so is it, so the system will apply to the DJI assets as well as Adjustable Color?

Speaker Change: Okay and then so is it.

Speaker Change: So the system will apply to the <unk> assets as well as adjusted from pillar <unk>.

Jason Veenstra: Just McKellar, it's a good question, but DGI is a different business model and will carry on with its existing ERP. We may look at that in mid-2025, but this ERP is just for the McKellar acquisition, which is basically like for like, and we can, you know, install our instance there.

Speaker Change: Mckellar, it's a good question, but did you is a different business model and we'll carry on with its existing ERP. We may look at that in mid 2025, but this ERP is just for the Mckellar acquisition, which is.

Speaker Change: Basically like for like and we can.

Speaker Change: Install our instance, there.

Speaker Change: Okay. Okay. That's helpful. Thank you so much and then in terms of do you mind, maybe commenting a little bit about the visibility on kind.

Maxim Sytchev: Okay, that's remarkable. Thank you so much. And then, in terms of, do you mind maybe commenting a little bit on the visibility of kind of non-commodity related work outlook, you know, just to replace, you know, the Fargo-Moorhead project at some point in the future as you're still, you know, have a couple of, I guess, a year or two of work left on that.

Speaker Change: Norm.

Speaker Change: Commodity related work outlook.

Speaker Change: Just to replace you know Fargo Moorhead.

Speaker Change: Project at some point in the future as you still have a couple of I guess, a year or two of work on left on that one.

Speaker Change: Yeah, It's oh.

Joseph Lambert: Yeah, it's actually It's probably got three to four odd years there, max. And then we would figure out a major infrastructure project. And We haven't bid a huge amount. We bid for Site C, and we were shortlisted, but we were unsuccessful. That was about a two-odd-year process. Fargo was about a four-year process because it got deferred once. Right now, we're working with a partner to pre-qualify on a major infrastructure project in Northern California, which is a big earthworks project, and it's damming up some water that was, you know, it's an area of California that has gone through cycles of flood and drought, and so they want to retain some of the water during the flooding times to use it during drought, and we believe that prequel is going to occur right at It really fits into our wheelhouse, and we're very comfortable with our partner on these big infrastructure projects.

Speaker Change: Actually it's probably got three three to four odd years Air Max and then that we would we would figure major infrastructure project in the you know we haven't been it's been a huge amount we bid site C. And we were short listed but were unsuccessful.

Speaker Change: Was about two two odd year process Fargo was about 40 year process because they.

Speaker Change: It got deferred want them right now.

Speaker Change: We're working with a partner to pre qualify on a major infrastructure project in Northern California, which is.

Speaker Change: A big earthworks project.

Speaker Change:

Speaker Change: And it's it's it's a damning up some water that was you know it it's an area of California, which has gone through cycles of of.

Speaker Change: Flood and drought and so they want to retain some of the water during the flooding times to do you use it during drought and we believe that prequel was going to occur right at the end of Q4.

Speaker Change: And that's our that's what we think is our replacement project it really fits into our wheelhouse and we're very comfortable with with our partner on these big infrastructure projects.

Maxim Sytchev: Okay, that's super helpful. And Joe, I guess it's too early to contemplate anything in Australia, right, as you are still kind of focusing on the core business for the time being, right?

Speaker Change: Okay. That's super helpful and I guess, it's too early to contemplate anything in Australia right. As you are still kind of focusing on the core business for the time being right.

Joseph Lambert: With the same partner, who is also one of the largest infrastructure contractors in Australia, we've just started initial discussions again on several Big Earth infrastructure projects. Most of them are kind of...

Speaker Change: We with the same partner who is also one of the largest infrastructure contractors in Australia. We've just started initial.

Speaker Change: Discussions again on several.

Speaker Change: Big Earth infrastructure project most of them are kind of.

Speaker Change:

Joseph Lambert: Unknown Speaker, EV or transitional kind of related in that they're big solar farms. There's some pumped hydro with a dam up a mountain valley and pump the water up. So really, really initial, I think we're probably Unknown Attendee. You know, six to 12 months from getting more visibility on a reasonable project down there.

Speaker Change: E V or transitional kind of related in that they're big solar farms Theres. Some pumped hydro with a dam up a mountain valley and and pump the water up.

Speaker Change: So really really initial I think we're probably.

Speaker Change: You know six to 12 months from from getting more visibility on a on a reasonable project down there.

Maxim Sytchev: Okay, okay. Very helpful. Thanks for listening to me. Thank you.

Maxim Sytchev: Okay, okay. Very helpful. Thanks for listening. Thank you.

Speaker Change: Okay. Okay very helpful. Thanks, a lot that's all for me. Thank you.

Speaker Change: Sure.

Speaker Change: Oh.

Speaker Change: Yeah.

Kevin Shilling: The next question comes from Kevin Shilling from Ventim Financial. Your line is open, please go ahead. Yeah, good morning, guys.

Speaker Change: Next question comes from Kevin Schilling.

Speaker Change: Venting financial your line is open. Please go ahead.

Kevin Schilling: Yeah. Good morning, guys just real quick here just just on the wildfire situation near the Pearl mine or are you guys currently impacted and if so can you quantify it.

Joseph Lambert: We just went back to, we were impacted about a week and a half ago, and we went back to the site over the last weekend. So it was... You know, about five days, but it only affected that one site, which is maybe 10 or 15% of our overall revenues for one week. And that would be, Devin, that would be like what we would expect in the normal summer, that a regional fire or a forest fire would affect one mine site or so, and that like that one affected, you know, one SAG-D and then that one oil sands mining. Okay, so I'm not really expecting much of an impact for Q3. No, you know, the other four sites we're on that constitute 80 plus percent of our revenue were unaffected by the fire last time.

Speaker Change: We've just went back we were impacted.

Speaker Change: About a week and a half ago, when we went back to site.

Speaker Change: On over the last weekend so it was.

Speaker Change: You know about five days, but it only affected that one site, which is maybe 10 or 15% of our overall revenues for one week and that would be Devin that would be like what we would expect in a normal summer.

Speaker Change: At a regional fire or a would affect one mine site or so and that like that one affected.

Speaker Change: You know one Sag D and then that.

Speaker Change: That one oil sands mining site.

Speaker Change: Okay, so not not really expecting much of an impact for Q3.

Speaker Change: The other four sites were on that constitute 80 plus percent of our revenue were unaffected by the fire last week.

Speaker Change: That's everything for me thanks, guys.

Darren: Thank you Darren.

Speaker Change: Yeah.

Speaker Change: Yeah.

Operator: There are no further questions. This concludes the Q&A section of our call, and I will pass the call over to Joan Lambert, President and CEO, for closing comments.

Joe <unk>: There are no further questions. This concludes the Q&A section a phone call and I will pass the call over to Joe <unk>, President and CEO for closing comments.

Joe <unk>: Yeah.

Joseph Lambert: Thanks, Ray, and thanks again, everyone, for joining us today. We look forward to providing the next update upon our closing of our Q3 2024 results.

Joe Jason: Thanks, Ray and thanks again, everyone for joining US today, we look forward to providing next update upon our closing of our Q3 2024 results.

Speaker Change: Thank you. This concludes the North American construction Group conference call, our second quarter 2024.

Operator: Thank you. This concludes the North American Construction Group conference call for the second quarter 2024.

Speaker Change: Yeah.

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