Aecon Group (TSE:ARE) reported record quarterly revenue and a sharp increase in adjusted EBITDA for the second quarter of 2026, while reaffirming its expectation for double-digit revenue growth this year.
Revenue rose 25% from a year earlier to a company-record CAD 1.6 billion, with approximately 80% of the increase generated organically, Senior Vice President of Corporate Development and Investor Relations Adam Borgatti said. Adjusted EBITDA doubled to CAD 82 million from CAD 41 million in the prior-year period, while operating profit increased to CAD 36 million from CAD 2 million.
Utilities, Nuclear and Transportation Drive Revenue Growth
Chief Financial Officer Jerome Julier said construction revenue increased across every operating sector. Utilities generated the largest gain, with revenue rising CAD 138 million on higher volumes of electrical, gas and telecommunications work in Canada and the United States. The increase also reflected contributions from KPC and ARC, acquisitions completed during the first quarter.
Urban transportation solutions revenue increased CAD 93 million, supported by subway and rail work as well as closeout activity on Ontario light rail transit projects that entered service in 2025. Nuclear operations revenue rose CAD 80 million as refurbishment, decommissioning, new-build and engineering-services activity expanded at North American generating stations.
Civil revenue increased CAD 22 million, primarily due to work on the civil components of power and rail projects, foundations work and international major projects.
Concessions adjusted EBITDA declined to CAD 11 million from CAD 16 million in the prior-year quarter, reflecting lower management and development fees from concession projects that reached substantial completion in 2025. Improved operating results at Skyport in Bermuda partly offset the decrease. Aecon said the book value of its concessions portfolio exceeded CAD 250 million at quarter-end.
Preferred Share Buyout Affects Reported Earnings
Aecon reported a diluted loss per share of CAD 1.58 for the quarter, primarily due to a CAD 128 million fair-value adjustment related to its agreement to purchase Oaktree Capital’s convertible preferred equity investment in Aecon Utilities. The adjustment increased the carrying value of the preferred shares to the agreed purchase price of CAD 320 million.
Excluding that adjustment, adjusted diluted earnings per share were CAD 0.33, compared with an adjusted loss per share of CAD 0.10 in the second quarter of 2025.
The CAD 320 million purchase price implies a CAD 1.2 billion equity value and CAD 1.5 billion enterprise value for Aecon Utilities, according to the company. Julier said the transaction will give Aecon full economic and strategic control of the utilities platform while simplifying its ownership structure.
Aecon Utilities generates more than CAD 1.2 billion in pro forma annual revenue, with more than 70% of revenue coming from recurring long-term master service agreements, Julier said. Electrical infrastructure has grown from about one-quarter of the business’s revenue to nearly half, while U.S. operations now account for 25% of revenue.
The company also said legacy projects reduced gross profit by CAD 4.5 million in the quarter. Over the trailing 12 months, the negative impact from those projects was CAD 36 million.
Backlog, Cash Flow and Project Pipeline
Aecon ended the quarter with CAD 10.5 billion in backlog, compared with CAD 10.7 billion a year earlier. It booked CAD 1.3 billion in new contract awards during the quarter and CAD 2.7 billion year to date. The backlog does not include Aecon’s share of certain significant awards under collaborative and progressive delivery models that are expected to be added later.
Management said the company has approximately CAD 4 billion of secured backlog executable over the next 12 months. Julier also noted that the Greenlight Electricity Centre in Alberta and the Winnipeg Wastewater Phase 2 Biosolids Program are expected to be added to backlog in the third quarter.
President and Chief Executive Officer Jean-Louis Servranckx said the company is pursuing a diversified portfolio across nuclear, civil, utilities, industrial and urban transportation markets. Power and utility services together represent more than 55% of Aecon’s nearly CAD 6 billion in trailing-12-month construction revenue.
Recurring revenue exceeded CAD 1 billion over the trailing 12 months ended June 30. Recurring utility-services revenue rose 30% to CAD 868 million from CAD 668 million a year earlier.
- Core cash and cash equivalents were CAD 129 million at June 30, excluding Aecon’s proportionate CAD 500 million share of cash held in joint operations.
- Net debt was CAD 672 million, including the CAD 320 million preferred-share repayment agreement.
- Net debt to trailing-12-month adjusted EBITDA was 2.2 times, or 2.0 times excluding the negative impact from legacy projects.
- Trailing-12-month free cash flow was CAD 301 million, compared with negative CAD 10 million a year earlier.
The board approved a quarterly dividend of CAD 0.1925 per share, equivalent to an annualized dividend of CAD 0.77 per share. The dividend is payable Oct. 2 to shareholders of record as of Sept. 22.
Outlook Emphasizes Growth With Risk Discipline
Servranckx said Aecon expects double-digit revenue growth in 2026 and further revenue growth in 2027, supported by strategic acquisitions, recurring utility programs, small- and mid-sized work, and the ramp-up of multi-year projects in nuclear construction and mass transit.
Management said it remains focused on improving profitability gradually while reducing project risk. Julier said the company’s construction adjusted EBITDA margin, excluding legacy projects, remained around 6% on a trailing-12-month basis through the second quarter despite revenue growth and investments in delivery capacity.
Among recently announced opportunities, Aecon highlighted the 932-megawatt Greenlight Electricity Centre in Alberta, which will support a data center for Meta; Roberts Bank Terminal 2 in British Columbia; the Winnipeg Biosolids Facilities Project; and the Mactaquac Life Achievement Project in New Brunswick.
The company also marked the substantial completion of the Gordie Howe International Bridge on June 9. The bridge opened to traffic July 27 and is the first new Canada-U.S. border crossing in more than 60 years, according to Aecon. Aecon holds a 20% equity interest in the project and a 30-year interest in operations, maintenance and rehabilitation activities.
About Aecon Group (TSE:ARE)
Aecon Group Inc is a Canada-based company that operates in two segments: Construction and Concessions. The Construction segment includes various aspects of the construction of public and private infrastructure projects, mainly in the transportation sector. Its concessions segment is engaged in the development, financing, construction, and operation of infrastructure projects. Aecon generates the majority of its revenue from the Construction segment.
