May 6, 2009 / 1:50 PM / 9 years ago

UPDATE 2-Aecon revenue, backlog climb; sees strong 2009

* Revenue rises 13 pct to C$341 mln

* Backlog climbs to record C$1.36 bln from C$1.23 bln

* Shares up 2.2 percent (Adds details from conference call, analyst comments; updates stock)

By Susan Taylor

OTTAWA, May 6 (Reuters) - Aecon Group Inc (ARE.TO) reported better than expected results on Wednesday and said it is was well-positioned for a strong performance through 2009 and beyond, thanks in part to the federal government’s C$40 billion ($34 billion) stimulus plan.

Canada’s biggest publicly traded construction company also said it was in good shape to weather the economic downturn, buttressed by a record backlog, strong balance sheet and robust pipeline of project bids.

“We, right now, are looking at billions (of dollars worth) of work that we know is coming out in the next 12 months, maybe 18 months in certain cases, which will all be part of this infrastructure stimulus program,” Chief Executive John Beck said on a conference call on Wednesday.

“We will not need to be competing for the smaller projects; there will be significant larger projects which are more our expertise and our sweet spot.”

There is a “sense of urgency” at various levels of government to get projects started, but Beck said it is still very early in the process.

“I think it’s going to take a few more months and I think late 2009, 2010 is the right best guess for when we’re going to feel that push,” he told analysts.

Aecon said it closed the first quarter with a record backlog of C$1.36 billion as of March 31, up from C$1.23 billion a year earlier.

“The impressive backlog growth was achieved despite the industrial verticals year-over-year and sequential declines,” Genuity Capital Markets analyst Maxim Sytchev said in a note.

“First-quarter bookings also showed remarkable resilience with new contract awards amounting to C$296 million during the quarter, almost identical to last year’s showing.”

Aecon reported it results late Tuesday, after markets . Closed. It posted a net loss of C$600,000, or 1 Canadian cent a share, compared with net income of C$300,000, or 1 Canadian cent a share, in the year-earlier period when it booked a C$4 million tax recovery.

Revenue climbed to C$341 million from C$302 million.

Its gross margin nearly doubled to C$32.6 million from C$18.5 million and its operating profit of C$1.8 million reversed last year’s loss of C$1.3 million.

The company said strong demand at its infrastructure and buildings business will be partly offset by “significant weakness” over the next year or two in its industrial segment, which is being stung by delays in oil sands projects resulting from sharply lower crude prices.

Infrastructure revenue rose nearly 18 percent to C$112 million and the backlog jumped 59 percent to C$660 million. Building division revenue was flat at C$109 million, while the backlog rose to C$520 million from C$428 million.

Revenue from industrial operations rose 6.5 percent to C$97 million while the backlog plunged 54 percent to C$179 million as construction work declined in the province of Ontario.

Aecon’s concession unit, which finances, develops and operates projects in partnership with the public sector, saw revenue jump 67 percent to C$25 million.

Aecon shares gained 27 Canadian cents to C$12.57 on the Toronto Stock Exchange on Wednesday. The stock has dropped nearly 28 percent over the past 12 months.

    $1=$1.17 Canadian Reporting by Susan Taylor; editing by Rob Wilson

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