North American Construction (NYSE: NOA) reported Q4 EPS of $0.10, $0.20 better than the analyst estimate of ($0.10). Revenue for the quarter came in at $131 million versus the consensus estimate of $54.97 million.

Martin Ferron, Chairman and Chief Executive Officer of the Company stated, “We are very pleased to post a strong end to another memorable year, in which we handily exceeded our operational and financial objectives. For the full year we grew revenue and EBITDA by 40% and 61% respectively, to follow on from 37% and 18% growth in 2017, against targets of 15% in each year for both measures. We also closed the two previously announced acquisitions during the quarter and moved into our new combined heavy equipment maintenance facility and central office, in Edmonton, ahead of schedule and on budget.”

Additionally, Mr. Ferron commented, “Looking ahead we expect the two acquisitions to firmly bolster our organic growth plan to yield further strong growth in 2019 and beyond. Currently we expect around 70% revenue growth and about a 60% increase in EBITDA during 2019, with the outcomes spread more evenly through the quarters than recorded historically. These anticipated improvements, could then propel our basic earnings to over $1.60 per share and lead to top decile returns on equity and capital, in our industry.”

Outlook

The Company has just completed the second year of a three-year growth plan that targeted a minimum 15% compound increase in revenue and Adjusted EBITDA over that period. The Company’s strategy to achieve the growth, organically and via acquisitions, is to:

1. Build production related recurring services volumes in the Company’s core oil sands market, together with the addition of value creating services.
2. Expand the Company’s market coverage to include other resource mines (e.g. coal, copper, gold, diamonds etc.) and infrastructure related projects that involve major earthworks.

Following on from 37% and 18% growth in revenue and Adjusted EBITDA respectively in 2017, the Company achieved a further 40% and 61% growth in the same two measures for 2018, as well as a meaningful improvement in profitability. The Company has also recently closed two important acquisitions that had only a marginal contribution to 2018 results but have the potential to provide a leap change in the Company’s financial results for 2019 and beyond. The Company currently anticipates the 2019 improvement to be around 70% for revenue and 60% for Adjusted EBITDA which could propel its basic EPS to over $1.60.

For earnings history and earnings-related data on North American Construction (NOA) click here.