Q4 2024 North American Construction Group Ltd Earnings Call

Operator: Good morning, ladies and gentlemen. Welcome to the North American Construction Group conference call regarding the fourth quarter and December 31, 2024. At this time, all participants are in a listen-only mode.

Good morning, ladies and gentlemen, welcome to Dan.

North American construction Group conference call regarding the fourth quarter ended December 31, 2024, well at this time all participants are in English and only mode.

Operator: Following management's prepared remarks, there will be an opportunity for analysts, shareholders, and bondholders to ask questions. The media may monitor this call in a listen-only mode. You are free to quote any member of management, but they are asked not to quote remarks from any other participant without that participant's permission.

Following managements prepared remarks, there will be an opportunity for analysts shareholders and bondholders to ask questions.

Jimmy monitor this call on the listen only mode, you're free to go to any member of management, but they are asking lots of coke remarks from any other participant without that participants permission.

Operator: The company wishes to confirm that today's comments contain forward-looking information and that outcome results could differ materially from a conclusion, 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.

The company wishes to confirm that today's comments contain forward looking information and that brought the results could differ materially from a conclusion 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.

Operator: Additional information about those material factors is contained in the company's most recent management discussion and analysis, which is available on CDER and EDGAR, as well as on the company's website at nacg.ca.

Additional information about those material factors is contained in the company's most recent management's discussion and analysis, which is available on SEDAR and Edgar.

All of us on the company's website.

Speaker Change: C G Watch C E.

Joseph Lambert: I will now turn the conference call over to Joe Lambert, President and CEO. Thanks, Jenny. Good morning, everyone, and thanks for joining our call today.

Speaker Change: I will now turn the conference call over to Joe Lambert, President and CEO.

Speaker Change: Yeah.

Joe Lambert: Thanks, Jenny good morning, everyone and thanks for joining our call today.

Joseph Lambert: I'm going to start with our operational performance in the fourth quarter of 2024 before handing it over to Jason for the financial overview, and then I'll conclude with the operational priorities, bid pipeline, backlog expectations for 2025, and our continued path for increased growth and diversification before taking your questions. On slide three. Our Q4 trailing 12-month total recordable rate of 0.39 was a continuation of the improvement seen in Q3. And these full-year 2024 results remain below our industry-leading target frequency of 0.5. Key safety initiatives in the fourth quarter included implementing inspection and observation programs in Australia.

Speaker Change: I'm going to start with.

Joe Lambert: Our operational performance in the fourth quarter of 2024 before handing it over to Jason for the financial overview, and then I'll conclude with the operational priority bid pipeline backlog expectations for 2025, and our continued path for increased growth and diversification before taking your questions.

On slide three.

Joe Lambert: Our Q4 trailing 12 month total recordable rate of 0.39 was a continuation of the improvement seen in Q3 and these full year 2024 results remained below our industry, leading target frequency of 0.5.

Joe Lambert: Key safety initiatives in the fourth quarter included implementing inspection and observation programs in Australia.

Joseph Lambert: Improving Heavy Equipment Operator Mentorship Programs, Developing New Field-Level Risk Assessment Tools, Expanding the Green Hand Training Program, and Launching a New Safety Leadership Survey to Increase Management Awareness and Provide GAP Analyses for Further Areas for Continued Safety Improvement. Rest assured that from the front line to our boardroom, we are always looking to improve our safety and will relentlessly pursue our principal cultural value to get everyone home safe.

Joe Lambert: Improving heavy equipment, operator, mentorship programs, developing new field level risk assessment tools, expanding the green and training program and launching a new safety leadership survey to increased management awareness and provide GAAP analysis for further areas for continuous safety improvement.

Joe Lambert: Rest assured that from the frontline to our boardroom, we're always looking to improve our safety and we will relentlessly pursue our principal cultural values to get everyone home safe.

Joseph Lambert: on slide four. We highlight some of the major operational and financial improvements of 2024. In 2024, we achieved record annual revenue fueled by strong growth in Australia, and in Q4 saw McKellar Group achieve its highest revenue quarter ever. Our major Fargo infrastructure project achieved peak annual revenue of over $150 million and progressed past the 60% completion mark with over 20% being completed in the second half of 2020-2024 after rain impacted first. The year ended with record backlog of $3.5 billion after major contract wins, including a four-year, $500 million regional contract extension in the Canadian oil stands, a $100 million mining and site development project for a New South Wales copper producer, and a two-year, $125 million heavy civil construction contract in the Canadian oil.

Joe Lambert: On slide four.

Joe Lambert: We highlight some of the major operational and financial improvements in 2024, and 2024, we achieved record annual revenue fueled by strong growth in Australia and in Q4 saw Mckellar group achieved its highest revenue quarter ever.

Joe Lambert: Our major Fargo infrastructure project achieved peak annual revenue of over $150 million and progressed past the 60% completion, mark with over 20% being completed in the second half of 2024 after rain impacted first half.

Joe Lambert: For the year ended with record backlog of $3 5 billion after a major contract wins, including a four year $500 million regional contract extension in the Canadian oil Sands $100 million mining, it's a development project for a new South Wales, copper producer and a two year $125 million heavy civil construction contract and the Canadian oil.

Joe Lambert: <unk>.

Joseph Lambert: As I mentioned in my letter to shareholders, I was particularly pleased to see the win at the New South Wales copper mine as our McKellar team not only increased our geographic and commodity diversity, but also demonstrated we can compete and win unit rate contracts, which are typical in the markets where we see significant growth opportunity in other resource-rich Australian states.

As I mentioned in my letter to shareholders.

Joe Lambert: Particularly pleased to see the win at the New South Wales copper mine as our Mckellar team not only increased our geographic and commodity diversity, but also demonstrated we can compete and win the unit rate contracts, which are typical in the markets, where we see significant growth opportunity in other resource Rich Australian states.

Joseph Lambert: Slide five highlights the year one achievements of our McKellar Acquisition. growth, diversification, high utilization, driving high returns on capital, and providing opportunity to place underperforming assets from Canada are just a few areas where our Australian business has exceeded expectations. We see this Australian contractor market as second to none and believe we can continue this positive trend for many years to come.

Joe Lambert: Slide five highlights the year, one achievements of our Mckellar acquisition.

Joe Lambert: Growth diversification high utilization driving high returns on capital and providing opportunity place underperforming assets from Canada are just a few areas, where our Australian business has exceeded expectations.

Joe Lambert: We see this as a strained contractor market is second to none and believe we can continue this positive trend for many years to come.

Joseph Lambert: On slide six, our Australian acquisition was a major driver in our 2024 growth and will continue being a primary contributor going forward. But our overall five-year growth trend and 20% annual growth rate demonstrate consistent improvements and a business culture always looking to improve.

Joe Lambert: On slide six our Australian acquisition was a major driver in our 2020 for growth and we will continue being a primary contributor going forward, but our overall five year growth trend in 20% annual growth rate demonstrate consistent improvement in our business culture always looking to improve.

Joseph Lambert: During this time frame, we won and commenced our Fargo flood diversion project, which was the largest infrastructure project in company history. Commenced and completed our joint venture with Nuna at the Ontario Gold Mine, which was the largest project in Nuna history. We acquired DGI in Australia, ML Northern in Canada, expanded our in-house maintenance capabilities, including about $100 million worth of second life rebuilds of our largest assets, and added to our technology with tools such as our equipment telematics and real-time machine health and production monitoring. This five year trend demonstrates not only can we replace work as completed, but we can win more than we consume and consistently improve profitability.

Joe Lambert: During this timeframe, we won and commenced our Fargo flood diversion project, which was the largest infrastructure project in company history.

Joe Lambert: Commenced and completed our joint venture with noon at Ontario, Gold mine, which was the largest project in newly history.

Joe Lambert: We acquired <unk> in Australia ml, Northern in Canada expanded our in house maintenance capabilities, including about $100 million worth of second like rebuilds of our largest assets in.

Joe Lambert: And added to our technology with tools, such as our equipment telematics and real time machine health and production monitoring.

Joe Lambert: This five year trend demonstrates not only can we replace work is completed but we can win more than we consume and consistently improve profitability.

Joseph Lambert: I will talk more about this later with details on our outlook and future expectations.

Joe Lambert: I'll talk to talk more about this later with details on our outlook and future expectations.

Joseph Lambert: Moving on to slide seven. Our Australian equipment fleet, which in Q4 now includes a couple dozen assets shipped from Canada and about 20 growth assets required for contract wins earlier in the year, maintained a consistent monthly utilization over 80% and total Q4 utilization of 82%, which keeps us right on track to achieve our target range of 85% in Australia early in 2020-25. Our Canadian fleet utilization improved to 54%, building up the Q3 achievement of 51% and the Q2 low of 42%. The Canadian fleet utilization achieved monthly utilization of 60% during the quarter and we expect to be back into 60s through our busy Q1 winter season and achieve our target range of 75% by the end of 2025.

Joe Lambert: Moving on to slide seven.

Joe Lambert: Our Australian equipment fleet, which in Q4 now includes a couple of dozen asset shift from Canada, and about 20 growth assets required for contract wins earlier in the year maintain a consistent monthly utilization over 80% and total Q4 utilization of 82%, which keeps us right on track to achieve our target range of 85%.

Joe Lambert: In Australia early in 2020 to 25.

Joe Lambert: Our Canadian fleet utilization improved to 54% building off the Q3 achievement of 51% in Q2 low of 42%.

Joe Lambert: The Canadian fleet utilization achieved mostly utilization of 60% during the quarter and we expect to be back into <unk> through our busy Q1 winter season, and achieve our target range of 75% by the end of 2025.

Joseph Lambert: The Achieving Canadian Utilization Targets will require continuing to build off our project wins and with the increased revenue in Q4 and expected further increase here in Q1 of 2025. And we're working diligently to achieve these project wins for the later half of the year.

Joe Lambert: Achieving Canadian utilization targets will require continuing to build up our project wins and with the increased revenue in Q4 and expect to further increase here in Q1 of 2025, and we're working diligently to achieve these project wins for the later half of the year.

Jason Veenstra: With that, I'll hand it over to Jason for the Q4 Finance. Thanks, Joe. And good morning, everyone. Starting with slide 9, the headline EBITDA numbers of $104 million and 27.8% margin were driven by both a fifth consecutive successful quarter from Australia since the change of control on October 1, 2023, but also a strong operational quarter in the OSN. I'll get to it on the next slide, but operations posted combined gross profit margin of 20%, which requires effective operations in both Australia and Canada. We included a comment here about our oil sands business, which, although down from last year's top line revenue, is posting more consistent quarter-to-quarter results than in the recent past and generated an over 10% increase from the third quarter on continued improved site conditions and steady usage of the equipment.

Joe Lambert: With that I'll hand, it over to Jason for the Q4 financials.

Jason: Thanks, Joe and good morning, everyone.

Jason: Starting with slide nine the headline EBITDA numbers of $104 million and 27, 8% margin were driven by both our fifth consecutive successful quarter from Australia. Since the change of control on October one 2023, but also a strong operational quarter and the oil sands.

Jason: I'll get through it on the next slide but operations posted combined gross profit margin of 20%, which requires effective operations in both Australia and Canada.

Jason: We included a comment here about our oil sands business, which although down from last year's topline revenue is posting more consistent quarter to quarter results than in the recent past and generated an over 10% increase from the third quarter on continued improved site conditions and steady usage of the equipment.

Jason Veenstra: The improved consistency is due to the nature of the contracts in the OnoSANS, which are now focused on more steady time and material and rental arrangements. Moving to slide 10 and our combined revenue and gross profit and for the first time now has McKellar quarter over quarter in the results. McKellar and DGI, which we combine as Australia in our results, were up $31 million on a quarter which was impacted by rains in December, but during which McKellar posted another impressive utilization number at 82%. This top line positive variance was offset by lower revenue quarter over quarter in the oil sands, but as previously mentioned, was importantly up from the third quarter by 13%.

Jason: The improved consistency is due to the nature of the contracts in the oil sands.

Jason: Which are now focused on more steady titled material and rental arrangements.

Jason: Moving to slide 10, and our combined revenue and gross profit for the first time now as mckellar quarter over quarter in the results.

Jason: Mckellar in Dci, which we combine is Australia and our results were up $31 million on a quarter, which was impacted by rain in December.

Jason: But during which mckellar posted another impressive utilization number at 82%.

Jason: This top line positive variance was offset by lower revenue quarter over quarter in the oil sands, but as previously mentioned was importantly up from the third quarter by 13%.

Jason Veenstra: Our share of revenue generated in the fourth quarter by joint ventures was down from last year as consistent scopes at the Fargo-Moorhead project were offset by lower scopes being completed within the Nuna Group of Companies. Our reported combined gross profit margin of 14.6% was significantly impacted by two items which we have adjusted for in the adjusted EBITDA margin. First was a claim that we extinguished as part of our four-year regional contract, and second was the expensing of certain shipping and logistics costs in the quarter for the equipment that was sent to Australia. Excluding these items, combined gross profit of 19.7%, which reflects the strong underlying operational quarter we had.

Jason: Our share of revenue generated in the fourth quarter by joint ventures was down from last year as consistent scopes at the Fargo Moorhead project were offset by lower scopes being completed within the unit group of companies.

Jason: Our reported combined gross profit margin of 14, 6% was significantly impacted by two items, which we have adjusted for in the adjusted EBITDA margins.

Jason: First was a claim that we extinguished as part of our four year regional contract and second was the expensing of certain shipping and logistics costs in the quarter for the equipment that was sent to Australia.

Excluding these items combined gross profit of.

Jason: Of 19, 7%, which was.

Jason: It reflects the strong underlying operational quarter, we had.

Jason Veenstra: Margins benefited both from the operations in Australia, which were 22% in the quarter, and the Canadian operational personnel and fleet posting solid margins of 18% as they benefited from consistent and stable operating conditions.

Jason: Margins benefited both from the operations in Australia, which were 22% in the quarter and the Canadian operational personnel and fleet posting solid margins of 18% as they benefited from consistent and stable operating conditions.

Jason Veenstra: Moving to slide 11. Q4 EBITDA of $104,000,000 beat last year. As mentioned, the 27.8% margin we achieved reflects an effective operating quarter and was almost 3% higher than last year's margin. This margin level is indicative of where we see our business operating at, with cumulative EBITDA margin since the McKellar acquisition now at 27.0%, which covers over $1.8 billion in revenue and an eventful 15-month time frame. Included in EBITDA is general and administrative expenses of $13.7 million in the quarter, and equivalent to 4.5% of reported revenue, which is slightly above the 4% target we set for ourselves.

Jason: Moving to slide 11.

Jason: Q4, EBITDA of $104 million beat last year.

Jason: As mentioned the 27, 8% margin, we achieved reflects an effective operating quarter and was almost 3% higher than last year's margin.

Jason: This margin level is indicative of where we see our business offering with cumulative EBITDA margin since the Mckellar acquisition now at 27.0%, which covers over one $8 billion in revenue and an eventful 15 month timeframe.

Jason: Included in EBITDA, It is general and administrative expenses of $13 $7 million in the quarter and equivalent to four 5% of reported revenue, which is slightly above the 4% target we set for ourselves.

Jason Veenstra: G&A costs in Canada, in particular, have been lowered in light of lower revenue being generated in the oil sands. Going from EBITDA to EBIT, we expense depreciation equivalent to 14.0% of combined revenue, which is consistent with the third quarter and reflects the depreciation rate of our entire business. When looking at just the wholly owned entities of our heavy equipment in Australia and Canada, the depreciation percentage for the quarter was also 14.0% of revenue and reflects the lower percentage of the Australian fleet as well as the fourth quarter operations in the oil sands which require high idle time during the cold weather.

Jason: G&A costs in Canada in particular have been lowered in light of lower revenue being generated in the oil sands.

Jason: Going from EBITDA to EBIT, we expense depreciation equivalent to 14.0% of combined revenue, which is consistent with the third quarter and reflects the depreciation rate of our entire business.

Jason: When looking at just the wholly owned entities of our heavy equipment in Australia, and Canada. The depreciation percentage for the quarter was also 14.0% of revenue and reflects the lower percentage of the Australian fleet as well as the fourth quarter operations and the oil sands, which require high idle time during the <unk>.

Jason: Hold weather.

Jason Veenstra: Adjusted earnings per share for the quarter of $1 reflects all the positive factors mentioned, with interest and taxes generally consistent with last year. The average cash interest rate for Q3 was 6.7%.

Jason: Adjusted earnings per share for the quarter of $1 reflects all the positive factors mentioned with interest and taxes generally consistent with last year.

Jason: The average cash interest rate for Q3 was six 7%.

Jason Veenstra: Moving to slide 12, I'll briefly summarize our cash flow. Net cash provided by operations prior to working capital of $62 million was generated by the business, reflecting EBITDA performance and net of cash interest paid. Free cash flow of $50 million was driven by the strong EBITDA quarter offset by the typically lighter capital spending in the fourth quarter.

Jason: Moving to slide 12, I'll briefly summarize our cash flow net cash provided by operations.

Jason: Prior to working capital of $62 million was generated by the business, reflecting EBITDA performance and net of cash interest paid free.

Jason: Free cash flow of $50 million was driven by the strong EBITDA quarter offset by the typically lighter capital spending in the fourth quarter.

Jason Veenstra: Moving to slide 13. Net debt levels ended the quarter at $856 million. A decrease of $26 million in the quarter as free cash flow was directed to both growth assets and debt reduction. Of the $856 million, $448 million, or roughly half, is denominated in Australian dollars. and is naturally hedged with the heavy equipment we own in Australia. Net debt and senior secured debt leverage ended at 2.2 times and 1.7 times respectively, which decreased in Q4 on free cash flow. Of note, of course, is that subsequent to year end, we had $73 million of convertible debentures convert into shares, which when applied to the December 31st balances, result in net debt of $783 million and net debt leverage of 2.0 times.

Jason: Moving to slide 13.

Jason: Net debt levels ended the quarter at $856 million.

Jason: A decrease of $26 million in the quarter as free cash flow was directed to both growth assets and debt reduction.

Jason: Of the $856 million.

Jason: $448 million or roughly half is denominated in Australian.

Jason: And is naturally hedged with the heavy equipment, we own in Australia.

Jason: Net debt and senior secured debt leverage ended at two two times and one seven times, respectively, which decreased in Q4 on free cash flow.

Jason: Of note of course is that subsequent to year end, we had $73 million of convertible debentures convert into shares which when applied to the December 31 balances resulted in net debt of $783 million and net debt leverage of 2.0 times.

Joseph Lambert: With that, I'll pass the call back to Joe. Thanks Jason Looking at slide 15. This slide summarizes our priorities for 2025. In 2025, the company will prioritize enhancing safety systems with a focus on consistency and training for frontline leaders. Key objectives include increasing equipment utilization, advancing telematics, including a rollout in Australia, and maintaining a strong focus on customer satisfaction to secure contract extensions and expansion. On slide 23 in the supplemental information, you'll see a Texas Thermal Coal Mine contract and the Queensland Thermal Coal Mine contract that ended in 2025. Both contracts are being retendered with the Texas contract award in the second half of the year and the Queensland contract which includes both an extension and potential expansions of services being awarded in the first half.

Joe Lambert: With that I'll pass the call back to Joe.

Joe Lambert: Thanks, Jason.

Joe Lambert: Looking at Slide 15, this slide summarizes our priorities for 2025 and 2025, the company will prioritize enhancing safety systems with a focus on consistency and training for frontline leaders.

Joe Lambert: Key objectives include increasing equipment utilization advancing telematics, including a rollout in Australia, and maintaining a strong focus on customer satisfaction to secure contract extensions and expansions.

Joe Lambert: On slide 23 in the supplemental information you will see a Texas thermal coal mine contract and the Cleveland thermal coal mine contract that ended in 2025.

Joe Lambert: Both contracts are being re tendered with the Texas contract award in the second half of the year and the Queensland contract, which includes both an extension of potential expansions of services being awarded in the first half of the year.

Joseph Lambert: We're confident in our ability to retain and expand these contracts because of our incumbency, our positive client relationships, and our safe, low-cost provider status. Additionally, the company plans to diversify geographically in terms of resources beyond Queensland and Alberta, optimize business processes and reduce costs for the ERP system in Australia, and expand external maintenance component rebuild services for third-party customers. On slide 16, the BITS pipeline remains over $10 billion with continuing and consistent strong demand in Australia, a modestly increasing demand in Canadian mining. The oil sands region is expected to see consistent project demand driven by higher projected barrel production, while infrastructure opportunities are also on the rise, especially in the United States.

Joe Lambert: We're confident in our ability to retain and expand these contracts because of our incumbency are positive client relationships and our safe low cost provider status <unk>.

Joe Lambert: Additionally, the company plans to diversify geographically in terms of resources beyond Queensland and in Alberta.

Joe Lambert: <unk> business processes and reduce costs for the ERP system in Australia, and expand external maintenance component rebuild services for third party customers.

Joe Lambert: On slide 16 the.

Joe Lambert: The bid pipeline remains over $10 billion with continuing and consistent strong demand in Australia are modestly increasing demand and Canadian mining projects.

Joe Lambert: The oil Sands region is expected to see consistent project demand driven by higher projected barrel production, while infrastructure opportunities are also on the rise, especially in the United States.

Joseph Lambert: As I mentioned in my letter, we see infrastructure works growing to about a quarter of our business over the next several years, and with that strategic focus, we'll be adding some more infrastructure talent and experience to our team to bid, win, and execute these projected projects.

Joe Lambert: As I mentioned in my letter, we see infrastructure works grown to about a quarter of our business over the next several years and with that strategic focus will be adding some more infrastructure talent and experience to our team to bid win and execute these projected projects.

Joseph Lambert: Moving to slide 17. The company is a record-setting contractual backlog of $3.5 billion, with strategic partnerships in the mining resource and civil sectors, such as those with the Miccosukee First Nation, Kittick-McInnuit Association, Red River Valley Alliance, and ASN Construction. Despite over $1.1 billion of work being executed in 2020-2024. New additions of $1.7 billion have further strengthened the backlog and continue to demonstrate not only our ability to win work, but to grow our backlog and continue to diversify both geographically and by commodity.

Joe Lambert: Moving to slide 17.

Joe Lambert: The company is a record setting contractual backlog of $3 $5 billion with strategic partnerships in the mining resource and civil sectors, such as though with those with the <unk> Cree first nation, <unk> and you'd Association Red River Valley Alliance and ASN constructors, despite over $1 $1 billion of work being <unk>.

Excluded in 2000 2024.

Joe Lambert: New additions of $1 7 billion have further strengthened our backlog and continue to demonstrate not only our ability to win work, but to grow our backlog and continue to both diversify both geographically and by commodity.

Joseph Lambert: On slide 18, we've provided our outlook for 2025. The 2025 outlook remains aligned with previous expectations driven by existing contracts in Australia and Canada. The per share metrics have been adjusted to the new share count after a recent debt conversion and the growth capital adjusted for deferred growth asset deliveries and project scheduling in Australia. Key financial metric for 2025 includes combined revenue of $1.4 to $1.6 billion. Adjusted EBITDA of $415 million to $445 million. Adjusted EPS of $3.70 to $4.00. Sustaining capital of $180 million to $200 million. and free cash flow of $130-$150 million and growth capital of $65-$75 million with a net debt leverage target of $1.7 down from the $1.8 after the previously mentioned debt conversion and growth spending.

Joe Lambert: On slide 18, we provided our outlook for 2025.

Joe Lambert: The 2025 outlook remains aligned with previous expectations, driven by existing contracts in Australia and Canada.

Joe Lambert: The per share metrics have been adjusted to the new share count after our recent debt conversion and the growth capital adjusted for deferred growth asset deliveries and project scheduling in Australia.

Joe Lambert: Key financial metric for 2025 include combined revenue of one four to one 6 billion.

Joe Lambert: Adjusted EBITDA of $450 million to $445 million adjusted EPS of $3 70 to $4 sustaining capital of $180 million to $200 million.

Joe Lambert: And free cash flow of $130 million to $150 million and growth capital of $65 million to $75 million with a net debt leverage target of $1 seven down from the one eight after the previously mentioned debt conversion and growth spending.

Joseph Lambert: Half-year and quarterly splits of EBITDA are expected to be weighted slightly towards second half of the year, with Q1 contributing slightly less than Q2 and Q3 being the largest quarter as our typical high Q1 in oil sands has less influence on the overall business. Our Australian business having typical high Q1 weather impacts and not achieving the full benefits of the growth capital additions until the second half of the year, and our NUNA and construction works which achieve typical peaks in Q3. Our half-year and quarterly splits in EPS are expected to follow the same trends, with increased weighting towards the second half of over 55%, Q1 contributing about 20%, with Q3, again, the largest quarter.

Joe Lambert: Half year, and quarterly splits and EBITDA are expected to be weighted slightly towards second half of the year with Q1 contributing slightly less in Q2, and Q3 being the largest quarter as our typical high Q1 in oil sands has less influence on the overall business, our Australia business, having difficult high Q1 weather.

Joe Lambert: Impact and not achieving the full benefits of the growth capital additions until the second half of the year and our newness and infrastructure construction works, which achieved difficult peaks in Q3.

Joe Lambert: Our half year on a quarterly splits and EPS are expected to follow the same trends with increased weighting towards the second half of over 55% Q1, contributing about 20% with Q3 again the largest quarter the.

Joseph Lambert: The difference in the weighting on EPS from EBITDA is due to the front loaded equipment repair costs and increased depreciation in our Canadian business unit from high Q1 equipment demand and increased equipment idling during cold weather.

Joe Lambert: The difference in the waiting on EPS from EBITDA is due to the frontloaded equipment repair costs and increased depreciation in our Canadian business unit from high Q1 equipment demand and increased equipment idling during cold weather.

Joe Lambert: On slide 19, the company's diversification journey continues with Australia operations expected to generate 60% of earnings before interest and tax in 2025.

Joseph Lambert: Slide 19. The company's diversification journey continues with Australian operations expected to generate 60% of earnings before interest and tax in 2020. The earnings composition by contract type includes 65% from time and material, 20% from unit rate, 10% from equipment rental, and 5% from fixed price contract. Mining services make up 80% of the revenue, with civil construction contributing 15% and equipment and component sales 5%. Geographically 60% of earnings come from Australia, 30% from Canada, and 10% from the U.S. The Canadian oil sands region is expected to contribute about $25 billion.

The earnings composition by contract type includes 65% from time and material, 20% will generate 10% from equipment rental and 5% from fixed price contracts.

Joe Lambert: Mining services make up 80% of the revenue with civil construction, contributing 50%, 15% and equipment and components sales of 5%.

Joe Lambert: Geographically, 60% of the earnings came from Australia, 30, Canada, and 10% from the U S.

Joe Lambert: The Canadian oil Sands region is expected to contribute about 25%.

Joseph Lambert: future quarterly decks. We plan to provide longer term projections and insights into how we expect to continue to grow and diversify our business, including our target to grow our infrastructure business to 25% of earnings and our continued commodity geographic diversification in Australia.

Joe Lambert: And future quarterly that we planned to provide longer term projections and insights.

Joe Lambert: We expect to continue to grow and diversify our business, including our target to grow our infrastructure business to 25% of earnings and our continued commodity geographic diversification in Australia.

Joseph Lambert: Lastly, regarding capital allocation, we remain committed to paying down debt and further strengthening our balance sheet. We believe our free cash flow will provide ample opportunity to continue to invest in shareholder-friendly ways while still being able to pay down debt and pursue acquisition and expansion opportunities when those returns warrant investment.

Joe Lambert: Lastly regarding capital allocation, we remain committed to paying down debt and further strengthening our balance sheet. We believe our free cash level will provide ample opportunity to continue and invest in shareholder friendly ways, while still being able to pay down debt and pursue acquisition expansion opportunities when those returns warrant investment.

Joseph Lambert: In closing, and as I said in my letter to shareholders, we have great expectations for our business in 2025 and going forward, and believe we're in the best position we have ever been. who continue to grow and diversify with improving profitability and with positive free cash flow to drive increased shareholder benefits.

Joe Lambert: In closing and as I said in my letter to shareholders, we have great expectations for our business in 2025 and going forward and believe we are in the best position we've ever been.

Joe Lambert: To continue to grow and diversify with improving profitability and with positive free cash flow to drive increased shareholder benefits.

Joseph Lambert: With that, I'll open up to any questions you may have. Thank you.

Joe Lambert: With that I'll open up to any questions you may have.

Joe Lambert: From floor to ask a question. Please press star one on your Touchtone phone Okay. Mr. With Joel Your question you can trust stock.

Operator: To ask a question, please press star one on your touchtone phone. If you wish to withdraw your question, you can press star two. Once you have completed your questions and would like to return to the queue, please press star 1 again.

Joe Lambert: Once you have completed your questions and it looked like to return to the queue.

Joe Lambert: Please press star one again.

Operator: After a brief pause, we will begin the Q&A section.

Joe Lambert: After a brief pause we will begin the Q&A session.

Joe Lambert: Okay.

Yuri Lynk: Your first question is from Yuri Lynk from Canaccord Genuity. Your line is now open. Hey, good morning, guys. Morning, Yuri.

Speaker Change: Your first question is from Yuri Lynk from Canaccord Genuity. Your line is now open.

Joe Lambert: Yeah.

Yuri Lynk: Hey, good morning, guys.

Joe Lambert: Morning, Eric.

Joseph Lambert: I just want to dig in on the 2025 outlook in Canada, you know, utilization still struggling. So, wondering... what you need to win to hit your numbers or do you feel you've got that in the backlog already? and kind of related to that. You know, 12-18 months ago, I thought the outlook for non-oil sands mining awards in Canada was pretty bright. continue to wait for. success there. Can you just update us on...

Joe Lambert: Just wanted to dig in on the 2025 outlook.

Joe Lambert: In Canada.

Joe Lambert: Utilization still still struggling so.

Joe Lambert: Wondering.

Joe Lambert: What you need to win to hit your numbers or do you feel you have got that in the in the backlog already.

Joe Lambert: And kind of related to that.

Joe Lambert: 12 to 18 months ago I thought the outlook for non oil Sands mining awards in Canada was pretty bright, but we continue to wait for for some success. There can you just update us on.

Joe Lambert: Kind of the mid funnel as it pertains to commodities outside of the oil sands.

Joseph Lambert: Yeah, I think, you know, as far as our our guidance, Yuri, If they're underutilized and we can't What do you, I mean, there's obviously been a large step down in your oil sands business. I mean, that is it deferred work? Is it work on to competitors? Is it in sourced work? Can you just give us some color as to, you know, what's going on in that. I can hypothesize, Yuri. It dropped about 30% last year. We're right about the same levels this year as last year. We look at that as the consistent level we'll project going forward.

Joe Lambert: Yes, I think.

Joe Lambert: As far as our our guidance here.

Joe Lambert: We expect the.

Joe Lambert: The utilization to stay similar to what it was last year with a little bit of increased demand in oil sands and.

Joe Lambert: Drops off in the second half of the year a bit.

Joe Lambert: <unk>.

Joe Lambert: Get to our 75% we would.

Joe Lambert: Which would put us over our guidance I would say in Canada that would mean winning.

Joe Lambert: Winning some work outside which we still have active tenders in in Ontario in particular.

And.

Joe Lambert: Or are the worst case scenario.

Joe Lambert: We would prioritize working Canada additional work in Australia, and where we would have shipping but that wouldn't necessarily affect 2025 and.

Joe Lambert: Our final resolution and this is predominantly smaller equipment, we'd be this element.

Joe Lambert: And if they are under utilized and we can't place them.

Speaker Change: What are you I mean, there's obviously been a large step down in your oil sands business I mean.

Speaker Change: That is a deferred work as that work on to competitors is it in sourced work.

Speaker Change: You just.

Speaker Change: Give us some color as to whats going on in that market.

Speaker Change: I can hypothesize Jerry it dropped about 30% last year, we're right about the same levels this year as last year.

Speaker Change: We look at that as a consistent level of project going forward.

Joseph Lambert: As far as the 30% drop and whether it was in-house or deferred, it's very difficult to say. It could be a combination of both. It's a very long cycle. These are four or five years.

Speaker Change: As far as the 30% drop and whether it was in house or deferred it's very difficult to say could.

Speaker Change: Could be a combination of both.

Speaker Change: It's a very long cycle. These are long life mines there.

Speaker Change: It could be deferral for four five years.

Speaker Change: And we're just going to plan on being where it is and it's very strong demand on the big truck side, it's still.

Speaker Change: Low demand on the civil construction works from the small trucks and those are the ones that we would look to take out of oil sands and in place somewhere else.

Speaker Change: We just take the demand as it is and if there is an upside in the future with increased production the barrel production and oil sands projected to go up significantly year on year.

Speaker Change: And we just see this as an opportunity.

Speaker Change: Okay.

Joseph Lambert: Okay, last one for me, just the two adjustments you made out of gross, gross margin. I guess the shipping costs are self-explanatory, a bit much higher than I thought it was going to be. But what happened with the claim? and as that's been put to bed. Yeah, it was just negotiated as part of our four year contract So we resolved it with that and so we dropped the claim and we negotiated into our contract.

Speaker Change: One for me just the two adjustments you made out of gross gross margin.

Speaker Change: I guess the specific costs are self explanatory.

Speaker Change: Higher than I thought it was going to be.

Speaker Change: But could you what happened with the claim.

Speaker Change: Has that been put to bed.

Speaker Change: Yes. It was just negotiated as part of our four year contract extension.

Speaker Change: So we've resolved it with that and so we dropped the claim and we we negotiated into our contract.

Yuri Lynk: Okay, I'll, I'll turn it over. Thanks, guys. Thank you.

Speaker Change: Okay.

Speaker Change: I'll turn it over thanks, guys you bet.

Speaker Change: Thank you.

Speaker Change: Yeah.

Speaker Change: Thank you. Your next question is from Aaron Macneil from TD Cowen. Your line is now open.

Aaron MacNeil: Your next question is from Aaron MacNeil from TD Cowen. Your line is now open. Hey, morning. Good morning, Aaron. they're an app. Oh, no, it's the work in Australia would fit our fleet in Canada, and we don't have long term commitments on a lot of that fleet, be it big or small. The smaller assets fit into a lot of the Western Australia opportunities we see and even the most recent copper mine, when we had in New South Wales, that's a that was 100 ton truck. And we placed some 240 ton trucks at a coal mine there as well.

Aaron MacNeil: Hey, good morning, all and thanks for taking my Gardner.

Speaker Change: Maybe just build on <unk> question. It looks like you've added a large project in Australia in the active procurement phase more generally things seem to be going pretty well there.

Speaker Change: Can you give us a bit more detail in terms of how you might mobilize equipment to the extent that you win incremental awards in Australia, and specifically you know you're sort of bumping up against that 85% utilization target Canada.

Speaker Change: Canada.

Speaker Change: <unk> remains below target so is.

Is there an appetite for further asset transfers or is the stuff that's still in Canada too small too.

Speaker Change: Sorry to be effective and that work scope.

Speaker Change: Oh no.

Speaker Change: The work in Australia would fit our fleet in Canada, We don't have long term commitments on a lot of that fleet being bigger small.

Speaker Change: The smaller assets fit into a lot of the western Australia opportunities, we see in even the most recent copper mine when we add in new South Wales, that's a that was 100 contracts.

Speaker Change: And and we placed 240 ton trucks.

Speaker Change: At a coal mine there as well so.

Joseph Lambert: So You know, I think you hit the nail on the head there, Aaron, that if you can get 85% utilization in five-year committed contract terms, that kind of return on assets, yeah, I do think we'll continue to see assets going from Canada to Australia with wins of contracts like that. It makes great sense for us as far as return on capital. You do incur a little bit of short-term pain in the shipping time frame. I mean, we would love to have it engaged in long-term contracts closer by to where we don't have that loss of time when we're mobilizing between jobs.

Speaker Change: I think you hit the nail on that they had there and then.

Speaker Change: You can get 85% utilization in five year committed contract terms.

Speaker Change: That kind of return on assets, Yes, I do think we'll continue to see assets going from Canada to Australia.

Speaker Change: With Windsor contracts like that.

Speaker Change: Great sense for us as far as return on the capital you do incur a little bit of.

Speaker Change: Short term pain and that shipping timeframe.

Speaker Change: We'd love to have it engaged in long term contracts closer bided, where we don't have that.

Speaker Change: Loss of time, when we're mobilizing between jobs, but.

Joseph Lambert: But, you know, certainly with the equipment we sent there and are replacing the contracts, if we can do more of that, I think it'd make great sense for the business, both from return on capital and long-term stability. I think our, yeah, it would be better to transfer under utilize assets and put them into an area where you can get high utilization long term commitments. And, and frankly, if they're looking for newer assets, we can take the ones we have and rebuild them second life rebuilds back to new standards, if that was the need. So we'd absolutely look to employ our existing assets before we went out and bought any, any growth assets.

Speaker Change: Certainly with with the equipment, we sat there and a replacement of contracts. If we can do more of that I think can make great sense for the business, but both of them return on capital and long term stability.

Speaker Change: I guess.

Speaker Change: Not to put too fine a point on it but would there be.

Speaker Change: Like would it be.

Speaker Change: <unk> sort of lease or buying new equipment to source that work or is it better to continue to transfer underutilized.

Speaker Change: Well I think our yeah, it'd be better to transfer underutilized assets and put them into an area, where you can get high utilization of long term commitments in and frankly, if they're looking for newer assets. We can take the ones, we have and rebuild them second like rebuilds back to new standards, if that was the need so.

Speaker Change: So we would absolutely look to employ our existing assets before we went out and bought any any growth assets.

Aaron MacNeil: Gotcha.

Jason: Got you and then maybe one for Jason you outlined the diversification journey on slide 19.

Jason Veenstra: And then maybe one for Jason, you outline the diversification journey on slide 19. Can you speak to any progress, if applicable on how you might be thinking about North American's GICS code and maybe more superficially about the corporate name just given that, you know, the GICS code. Yeah, with the filing of yesterday, you know, we will be engaging in a GICS review to, you know, we feel, you know, on slide 19, that does show a pretty diversified business and we will be making the argument for a recategorization to reflect that. So, you know, I'm looking forward to that actually next week, we are scheduled to have those conversations.

Speaker Change: Can you speak to any progress if applicable on how you might be thinking about.

Speaker Change: Americans gigs code and maybe more superficially about the corporate name just given that you know the gigs code and the name don't really reflect the business fundamentals anymore.

Speaker Change: Yes, with the filing of yesterday.

Speaker Change: So we will be engaging in a <unk> review.

Speaker Change: We feel you know.

Speaker Change: On slide 19 that does show a pretty diversified business and we will be making the argument for a re categorization.

Speaker Change: Two two.

Speaker Change: To reflect that so im looking forward to that actually next week.

Speaker Change: We are scheduled to have those conversations so.

Jason Veenstra: And so. Having this Trailing 12 audit was an important milestone and so that is done, effective yesterday and so those conversations will start next week. And, you know, Joe can comment as well, but, you know, we continue to debate the name change. It's one of those decisions that's tricky.

Speaker Change: Having this trailing 12 audit wasn't it was an important milestone and so that.

Speaker Change: That is not effective yesterday, and so that those conversations will start next week.

Speaker Change: And Joe can comment as well, but we continue to debate the name change. It's it's one of those decisions. That's that's tricky we clearly are.

Aaron MacNeil: We clearly have a name that doesn't fit our 60% Australia, you know, generating business, but, you know, I would say stay tuned for that. Gotcha. Thanks both. Happy to turn it back. Thank you.

Speaker Change: Have a name that doesn't fit our 60% Australia.

Speaker Change: You know generating business, but.

Speaker Change: I'd say stay tuned for that.

Speaker Change: Got you.

Speaker Change: Thanks, Paul and happy to turn it back.

Speaker Change: Yes.

Maxim Sytchev: Your next question is from Maxim Sytchev from National Bank Financial. Your line is now open. Hi, good morning, gentlemen. I was wondering if it's possible to get any call in relation to, I mean, I think there's some inclement weather in Australia recently, and how we should be thinking about those, you know, impacts for the upcoming Q1. So yeah, just maybe any call in terms of how Q1 is trending specifically. You know, like I said in my comments, Q1 is only about 20% of our year in the financial side of things. It's quite a contrast.

Speaker Change: Your next question is from.

Speaker Change: Yes sitcom Commonwealth Nonbank financial your line is now open.

Speaker Change: Hi, good morning, gentlemen.

Speaker Change: Sure.

Speaker Change: John I was wondering if it's possible to get any color in relation to I mean, I assume there was some inclement weather in Australia recently, and how should we be thinking about those.

Speaker Change: Impacts for upcoming Q1.

Speaker Change: So yes, just maybe any comments on Q1 is trending specifically to that.

Speaker Change: You know like I said in my comments.

Speaker Change: Q1 is only about 20% of our year and the financial side of things.

Speaker Change: It is quite a contrast, I know you've been around with US a long time Max quite a contrast, one where 95% of all fans in Q1.

Joseph Lambert: I know you've been around with us a long time, Max, but quite a contrast when we were 95% oil sands and Q1, you know, used to be a third of the business at times. What drives that is that Q1 is actually the highest weather impact quarter now, because it's the biggest weather, well, really the only weather quarter other than the tail end of Q4 in Australia. And we do get some impacts on extreme cold in Alberta, you know, and oil sands, the busier oil sands, Q1 is now tempered by the fact that it's only 25% of the business.

Speaker Change: Used to be a third of the business at times.

What what's driving that is it.

Speaker Change: Q1 is actually the highest weather impact quarter now because it's.

It's the biggest weather well really the only weather quarter other than the tail end of Q4 in Australia.

Speaker Change: And we do get some impacts from the extreme cold in Alberta.

Speaker Change:

Speaker Change: And oil sands, the busier oil Sands Q1 is now tempered by the fact that it's only 25% of the business and then the other thing that affect that in the second half of the year and the growth assets. We added last year some of which have.

Joseph Lambert: And then the other thing that affects that in the second half of the year is the growth assets we have in last year, some of which have... timing slipped into this year. We don't get a full year effect of those. They start ramping up as those growth assets come in. And so the second half of the year, we'll just see more influence from that. And then we also, if you look at our, you know, our summer seasonal businesses, which is typically the NunaWork up north, and the Fargo-Moorhead project, that's why we peak in Q3. So, you know, we go from that 20% low in Q1 to a peak in Q3, and then it backs up slightly in Q4.

Speaker Change: Slipped into this year.

Speaker Change: We don't get a full year effect of those.

Speaker Change: They start ramping up as those assets come in and so.

Speaker Change: The second half of the arrows you see more influence from that and then we also.

Speaker Change: You look at our.

Speaker Change: Our summer seasonal businesses, which is typically the new network up north and the Fargo Moorhead project.

Speaker Change: That's why we peak in Q3, so we go from that 20% low up to a peak in Q1 to a peak in Q3, and then it backs up slightly in Q4.

Maxim Sytchev: Yeah, okay, that makes sense.

Speaker Change: Yeah, Okay that makes sense.

Maxim Sytchev: And then your comment around, you know, 25% of the business to be infrastructurally levered, you know, over time, how should we think about the capital intensity of the business that's still going to be very similar and we should be thinking about kind of, you know, Fargo type, you know, projects or, I guess, again, any thoughts on that we Yeah, I mean, my expectation would be very capital light as part of what we like the business, the Fargo project is standalone on its fleet requirements. We haven't put any assets in there. It's very modest on capital and they posit cash flow very quickly.

Speaker Change: And then your comments around 25% of the business to be infrastructural levered over time.

Speaker Change: How should we think about the capital intensity of the business is that still going to be very similar and what should we be thinking about kind of.

Speaker Change: Fargo type projects or I.

Speaker Change: I guess again any thoughts on what would be helpful.

Speaker Change: Yeah, I mean, my expectation it would be very capital light and it's part of what we liked the business The Fargo project.

Stand alone on its fleet requirements, we haven't put any assets in there its very modest on cap on the positive cash flow very quickly.

Joseph Lambert: All of what's attractive about that marketplace. And then I think there's a growing demand for our kind of practical construction mentality and doing these kind of The type of contracts like the progressive design bills and the construction management at risk contracts I think fit the way we manage operations very well. And yeah, I think that, you know, overall we see. High demand in infrastructure projects, especially more that fit what we do with these climate resiliency and with that low capital intensity, that's absolutely the reason we're pursuing them that much more.

Speaker Change: All of what's attractive about that marketplace and then I think there is a.

Speaker Change: A growing demand for our kind of.

Speaker Change: Practical construction mentality and doing these kind of.

Speaker Change: The type of contracts Act, a progressive design build and construction management at risk contracts I think fit the.

Speaker Change: We manage operations very well.

Speaker Change: Yes, I think that overall, we see.

Speaker Change: The high demand in infrastructure projects, especially more that fit what we do with these climate resiliency and.

Speaker Change: With that low capital intensity, that's absolutely the reason we're pursuing.

Speaker Change: That much more Matt.

Joseph Lambert: Yeah, and I guess is it going to be both Canada, Australia, or is the sort of global focus on a specific job? Yeah, predominantly U.S. and Australia, but certainly some in Canada, but I think the biggest market is the U.S. and I think Australia is like just after that. Okay, that's helpful.

Speaker Change: Yeah, and I guess is it going to be both Canada, Australia or is there sort of mobile focus on all of that specific geography.

Speaker Change: Yeah, predominantly U S and Australia, but certainly some in Canada, but I think the biggest market is the U S and I think Australia is like just after that.

Speaker Change: Okay. Okay.

Jason Veenstra: And then maybe just one quick question for Jason, if I may. In terms of Fargo, because correct me if I'm wrong, it was peak revenue generation in 2024. So how should we think about kind of the curvature of that, you know, normalization as the year progresses in 2025? It's about 10% down from 2024. So it's still a big strong year in 2025. You know, we might not get to 150. But you know, 140 type of top line we expect out of Fargo this year.

Speaker Change: Helpful. And then maybe just one quick question for Jason If I may.

Speaker Change: Fargo, because correct me if I'm wrong. It was peak revenue generation in 2024, so how should we think about kind of the corporate share of that.

Speaker Change: Monetization as the year progresses in 2025.

Speaker Change: It's about 10% down from 2024, so it's still a big strong year in 2025.

Speaker Change: We might not get to 150, but you know 140.

Speaker Change: Type of topline, we expect out of Fargo. This year.

Speaker Change: Okay. Okay very helpful. And then is it possible to get to them.

Jason Veenstra: Okay, very helpful.

Jason Veenstra: And then is it possible to get the last question, any incremental thoughts on sort of NCIB quantum timing, kind of trigger points, anything you can you can add? You know, we've been active in the NCIB. I think we'll continue to be at these share prices.

Speaker Change: All right.

The last question any incremental thoughts on sort of and CIB quantum timing kind of trigger points and anything you can you get out there.

Speaker Change: We've been active in CIB.

Speaker Change: I think we'll continue to be at these share prices.

Jason Veenstra: I would expect, you know, we're kind of A low level of activity and as our cash flow improves, depending on our share prices, I would expect it to increase if it were staying the same as it is now as our cash flow improves during the year. Okay, that's great.

Speaker Change: I would expect we're kind of add.

Speaker Change: Our low level of activity and as our cash flow improves and depending on where share prices I would expect it to increase if it were staying the same as it is now as our as our cash flow improves during the year.

Speaker Change: Okay. That's great that's it for me thank essential.

Operator: That's it for me. Thank you so much. Thank you once again.

Speaker Change: Yes.

Speaker Change: Thank you once again, please press star one should you wish to ask a question.

Operator: Please press star 1 should you wish to ask a question.

Adam Thalhimer: Your next question is from Adam Thalhimer from Thompson Davis. Your line is now open. Hey, good morning, guys. Morning, Adam. One of my questions was what you just answered, the Fargo going from, call it 153 down to 140. Do you think, is there an offset? maybe at Nuna or somewhere else within the JV line. to where you can put up JV revenue growth this year. Yeah, I think it's, we've got some modest increase potential there. And, you know, they're, they're bidding actively right now for a lot of summer work.

Speaker Change: Our next question is from Adam <unk> from Thompson Davis. Your line is now open.

Speaker Change: Hey, good morning, guys.

Speaker Change: Adam.

Speaker Change: One of my questions was what you just answered the Fargo gone from call. It 153 down to 140.

Speaker Change: Is there an offset.

Speaker Change: Maybe at noon hour somewhere else within the JV line.

Speaker Change: So where you can put up JV revenue growth this year.

Speaker Change: Yeah I think.

Speaker Change: We've got some modest increase potential there.

Speaker Change: And.

Speaker Change: They are bidding actively right now for a lot of summer work and so we'll have a better view on that I think after the Q1 close and into Q2.

Joseph Lambert: So we'll have a better view on that, I think after the Q1 close, and into Q2. Got it.

Speaker Change: Yes.

Speaker Change: Got it.

Joseph Lambert: And I'm just curious high level, you know, kind of what you've what you've learned from Fargo. and what types of projects you'd be looking for in the U.S. going forward. I think we've learned that the how much good partners count. We've had some good partners there and We've learned a lot about executing that work and dealing with you know, the authorities in the US, the permitting, the regulatory side, it's a very It was a very good experience for us because that project is has a national because it's on a on a river. It has two different states because it splits the border two states.

Speaker Change: And I'm just curious high level.

Speaker Change: You know kind of what you what you've learned from Fargo.

Speaker Change: And what types of projects you'd be looking for.

Speaker Change: In the U S going forward.

Speaker Change: No I think we've learned that the how much good partners count.

Speaker Change: We've had some big partners Erin.

Speaker Change: Yeah, we've learned a lot about executing networking and dealing with.

Speaker Change: You know the authorities in the U S. The permitting the regulatory side, it's a very.

Speaker Change: It was a very good experience for us because that project is has a national because it's on a on a river. It has two different states because it splits at the board are two states that do different counties different cities. So it really gave us a lot of good experience into.

Joseph Lambert: It's two different counties, two different cities. So it really gave us a lot of good experience into, you know, how regulatory works from municipalities up to the federal side of things. And, you know, I think we've we've just been in it longer and understand it and have been around our partners and talk to others in in the U. S. infrastructure world and feel more comfortable doing that kind of work. We look for still look for stuff that's more. Earthworks civil construction that we've done before. But, you know, I don't think we'd be scared to get into other areas with the right partner and the right experience.

Speaker Change: All regulatory works from municipalities up to the federal side of things and you know.

Speaker Change: I think we've just been in it longer and understand it and have been around our partners and talk to others.

Speaker Change: In the U S infrastructure world and feel more comfortable doing that kind of work.

Speaker Change: We look for still look for stuff that's more.

Speaker Change: Works civil construction that we've done before but.

Speaker Change: I don't think we'd be scared to get into other areas with the right partner and the right experience, we're not going to jump into building skyscrapers or anything like that but.

Adam Thalhimer: We're not going to jump into building skyscrapers or anything like that. But, you know, we've done roadworks in the past. Concrete's not a huge expansion off our skill base and talent base, so I think most of the infrastructure work that isn't. You know, vertical construction would fit us pretty well. Got it. Okay.

Speaker Change: We've done road works in the past.

Speaker Change: Concretes, not a huge huge expanse.

Speaker Change: Expansion effort skill base and talent base. So I think most of the infrastructure work work that isn't.

Speaker Change: Vertical construction would fit us pretty well.

Speaker Change: Got it Okay and just last one for me I'm curious how you see <unk>.

Joseph Lambert: And just last one for me. Curious how you see... backlog trending this year? Because it looked like your larger bids were more concentrated in early 2016. That's the start dates of those projects, so we would still look to win those in 2025, but they'd be in backlog before then. So I think we've got some good opportunities to continue the growth with some potential expansions, predominantly in Australia, and extensions, early extensions of contracts, and some civil and mining opportunities, in particular in Ontario right now. Yeah, I think there's good opportunities to continue to build on that.

Speaker Change: Backlog trending this year because it looked like your loss.

Speaker Change: Larger bids were more concentrated in early 'twenty six.

Speaker Change: I think that's the start dates of those projects. So we would still.

Speaker Change: It looked a windows in 2025, but they've been backlog before then so I think we've got some good opportunities.

Speaker Change: To continue the growth with some.

Speaker Change: Some potential expansions predominantly in Australia and extensions early extensions of contracts.

Speaker Change: And some.

Speaker Change: Several of mining opportunities in particular in Ontario, right now.

Speaker Change: Yes, I think there is there's good opportunities to continue to build on that.

Aaron MacNeil: Great. Thank you, Joe. You bet. Thank you, Aaron.

Speaker Change: Great. Thank you Jeff.

Anne: Thank you Anne.

Will Witheredge: Thank you. Your next question is from Will Witheredge from Witheredge Company. Your line is now open. Hi, guys.

Anne: Thank you. Our next question is from Robert <unk> with a rich company. Your line is now open.

Speaker Change: Hi, guys. So the one word I have not heard this whole call is tariffs.

Joseph Lambert: So the one word I have not heard this whole call is tariffs, which is kind of the topic of discussion on virtually every other conference call. So, you know, address that. I mean, you know, I presume some heavy equipment purchasing or moving thereof might be faced with this. But anyhow, if you can sort of put together any potential impacts you might see from tariffs. You know, right now, Bill, we haven't felt much and not to say we won't in the future, but it doesn't, you know, most of the stuff we've our assets, we rebuild our own or we've already ordered them and they're on their way.

Speaker Change: We're just kind of the topic of discussion on virtually every other conference call so address that.

Speaker Change: I presume, some heavy equipment purchasing or moving thereof.

Speaker Change: Might be faced with this but and you know if you can sort of put together any potential impacts you might see from tariffs.

Speaker Change: Right now, though we haven't felt much and not to say, we won't in the future, but it doesn't.

Speaker Change: Most of this stuff.

Speaker Change: Our assets, we've rebuilt our own or we have already ordered them and they are on their way.

Joseph Lambert: We don't we don't see a lot of huge asset purchases coming from the US over the next 12 months. You know, we haven't, obviously nothing's affecting Australia, which is like we said is over 60% of our business and nothing's affecting our U.S. operation. And even when we look at the Canada stuff and the tariffs on oil, it's 10% vs. 25% and we certainly haven't seen any dramatic changes in plans as of yet from our clients and the producers.

Speaker Change: No we don't see a lot of huge asset purchases coming from the U S. Over the next 12 months.

Speaker Change:

Speaker Change: We haven't obviously nothing's affecting Australia, which like we said is over 60% of our business and nothing is affecting our U S operations.

Speaker Change: We have seen.

Speaker Change: And even when we look at the candidates toughen that tariffs on an oil it's 10% versus 25, and we certainly havent seen any dramatic changes in plans as of yet from are our clients and the producers.

Joseph Lambert: Not to say we'll be immune from it, but right now it doesn't feel like it's going to have a material effect on us and I guess we'll know more about that on April 2nd, I guess. Right.

Speaker Change: Not to say will be immune from it but right now it doesn't feel like it's going to have a material effect on us and I guess, we'll we'll know more about that on April 2nd I guess.

Speaker Change: Right and the other question I have is Australia, you referred to the first quarter has been weak.

Joseph Lambert: And the other question I have is Australia, you refer to the first quarter as being a weaker quarter, in particular because of a usual pattern in Australia. How about this year in particular? How has the first quarter weather in Australia looked overall? And what might this impact?

Speaker Change: A weaker quarter in particular because of you.

Speaker Change: Usual pattern in Australia, how about this year in particular, how how as the first quarter weather in Australia looked overall.

Speaker Change: This impact be.

Joseph Lambert: Oh dear, we just went through... Cyclone Alfred, it has had a significant impact in the... in our operations. We had rains in February, which affected our operating sites more than the cyclone Alfred did. Q1 is always their low quarter because it's the most impacted by rains. Generally, the rest of the year is... Unimpacted by weather other than possibly early cyclones in like late November, early December, but it's very similar to northern Alberta is like our cold weather. We usually get in January, February. The big rains in Australia are usually January and February as well. So that's why our Q1 is most impacted.

Speaker Change: Oh, Yeah, we just went through.

Speaker Change: Cyclone Alfred it hasn't had a significant impact and.

Speaker Change: And our operations.

Speaker Change: More on the corporate side.

Speaker Change: He had rains in February which affected our operating sites more than hurt they cycled one Alfred did it just Q1 is always a low quarter because it's the most impacted by range.

Speaker Change: Generally the rest of the year is.

Speaker Change: Uninfected by weather other than possibly early cyclones in like late November early December, but it's very similar to northern Alberta is like our cold weather, we usually get in January February the big rains in Australia are usually January and February as well. So that's why our Q1 is most impacted and.

Joseph Lambert: And then the rest of it is just they're they're still getting growth assets delivered. And we just started up our Harris project at Copper Mine in New South Wales. And then those growth assets coming and ramping up. So that's what makes the later quarters and second half of the year higher.

Speaker Change: And then the rest of it is just there is still getting.

Speaker Change: Gross assets delivered and we just started up our Arris project at copper mine in New South Wales, and then those growth assets coming in ramping up so that's what makes the later quarters in second half of the year here.

Operator: Thank you. No worries. Thanks, Phil. Thank you. Once again, please press star one should you wish to ask a question.

Speaker Change: Thank you.

Thanks Bill.

Speaker Change: Thank you once again, please press star one should you wish to ask a question and your next question is from Tom Jack from Raymond James Your line is now open.

John Jack: And your next question is from John Jack from Raymond James. Your line is open. Hey, good morning, guys. So just one for me, it's been pointed out that there's been some new opportunities in Australia in the bid pipeline. I just wanted to check in and see how you're seeing the competition level for bids there. And, you know, I expect no, but has there been any change in sentiment there with some of the noise in the global markets right now? We still see very strong demand, there is strong competition, but we will say it's very disciplined competition.

Tom Jack: Hey, good morning, guys.

Speaker Change: Morning, John.

Speaker Change: So just one for me, it's it's been pointed out that there's been some new opportunities in Australia in the bid pipeline I just wanted to check in and see how are you seeing the competition level for bids there and I.

Speaker Change: I expected no but has there been any change in sentiment.

Speaker Change: There was some of the noise in the global markets right now.

Speaker Change: We still see very strong demand there is very strong competition.

Speaker Change: But what we will say, it's very disciplined competition.

Speaker Change: We were very pleased in winning.

Joseph Lambert: We were very pleased in winning that copper mine in New South Wales and getting that kicked off. I think it's going to bode well for us in getting into areas like Western Australia where unit rate work is better, more prevalent. We see strong demand, we do see competition, but it's a very disciplined competition. No one's acting desperate. We think that with our safe, low-cost structure, we'll have a very good opportunity to win that work. We continue to see early potential renewals. Actually, if you look at the bid pipeline, the big blue dot in the middle of the graph in the second row, that's actually an early extension opportunity.

Speaker Change: <unk> copper mine in new South Wales, and getting that kicked up I think it's going to bode well for us in getting into.

Speaker Change: Areas like Western Australia, where unit rate work is better.

Speaker Change: More prevalent.

Speaker Change: We still see strong demand, we do see competition, but it's very disciplined competition no one's acting desperate.

Speaker Change: And so we think that with our safe low cost structure, we will have a very good opportunity to win that work and theyre continuing to we continue to see.

Speaker Change: Early potential renewals actually if you looked at the bid pipeline the big Blue Dot in the middle in the middle of the graph on the second row.

Speaker Change: That's actually an early extension opportunity. So we continue to see contracts that have.

Joseph Lambert: We continue to see contracts that have early renewals and expansion opportunities and long-term commitments. And so we see that marketplace is continuing to be strong in our relationships with our clients and our capabilities to expand beyond our current operations and continue to diversify geographically and commodity-wise.

Speaker Change: Early renewals and expansion opportunities and and long term commitments and so we'd say that marketplaces, continuing to be strong and our relationships with our clients and our our capabilities to expand beyond our current operations and continue to diversify geographically and commodity wise.

Operator: Like I said, I think we're in the best place we've ever been, John. Great to hear it. That's all from you guys. Good morning. Thank you. There are no further questions at this time.

Speaker Change: Like I said I think we are in the best place we've ever been.

Speaker Change: Yeah.

Speaker Change: Great. That's all for me guys.

Speaker Change: No.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: There are no further questions at this time. This concludes the Q&A section of the call and now I will pass the call over to Joe Lambert, President and CEO for closing comments.

Joseph Lambert: This concludes the Q&A section of the call and I will pass the call over to Joe Lambert, President and CEO for closing comments. Thanks, Jenny. Thanks again, everyone for joining us today.

Joe Lambert: Thanks, Jenny Thanks again, everyone for joining us today, we look forward to providing the next update upon closing of our Q1 2025 results.

Operator: We look forward to providing the next update upon closing our Q1 2025 results. Thank you.

Speaker Change: Thank you. This concludes from North American Construction Group conference call on fourth quarter 2024.

Operator: This concludes the North American Construction Group conference call on fourth quarter 2024. The conference call has now ended. You may all disconnect your lines.

Joe Lambert: Conference call has now ended.

Joe Lambert: I'll disconnect your lines.

Speaker Change: Yeah.

Speaker Change: Yeah.