Stantec Inc. (TSX:STN)(NYSE:STN) -
Today, Stantec announced strong second quarter 2013 results,
with several key items to highlight
-- Gross revenue increased 19.7% to C$566.7 million in Q2 13 from C$473.4
million in Q2 12
-- Net income increased 17.5% to C$36.2 million in Q2 13 from C$30.8
million in Q2 12
-- Diluted earnings per share increased 16.4% to C$0.78 in Q2 13 from
C$0.67 in Q2 12
-- The Company declared a quarterly dividend of C$0.165 per share
"At the midpoint of the year we are excited to see continued
solid growth and operating performance," says Bob Gomes, Stantec
president and chief executive officer. "It is the outstanding
efforts of our staff in building strong client relationships that
have allowed us to achieve these positive results for the
Company."
Compared to Q2 12, Stantec's gross revenue increased by 19.7% to
C$566.7 million from C$473.4 million, EBITDA increased 18.0% to
C$66.2 million from C$56.1 million, net income increased 17.5% to
C$36.2 million from C$30.8 million, and diluted earnings per share
increased 16.4% to C$0.78 from C$0.67.
In Q2 13, Stantec's gross revenue grew organically by 7.3%,
demonstrating a sustained ability to generate organic growth within
the diversity of the Company's business model. This is the eighth
quarter of continuous organic growth for the Company. Stantec's
positive results in the second quarter were mainly due to activity
in the oil and gas, environmental services, and transportation
sectors.
Executing on Strategy and Capitalizing on Market
Opportunities
With the strength of its recent acquisitions and its depth of
expertise, Stantec is well-positioned to capitalize on diverse
market opportunities across its practice areas. For example, by
cross selling the Company's transportation expertise, Stantec
recently secured a project in its Buildings practice to reconfigure
the campus entrance and associated intersections at the University
of Maryland, Baltimore County campus, to safely and easily move
pedestrians, cyclists, and drivers to their destinations.
Stantec is also seeing the results of its recognized expertise
in the water sector. This expertise, together with the Company's
local presence and relationships with leading design-build
contractors, has resulted in a recent project where Stantec is the
lead engineer and architect for PCCP Constructors, a joint venture,
selected for a contract with the US Army Corps of Engineers, New
Orleans District. The three new permanent canal closure and pump
facilities will form one of the largest drainage pumping stations
in the world, and will operate continuously and independently
during major hurricane events to protect the New Orleans area from
another disaster.
The development of long-term relationships continues to
strengthen Stantec's project roster. This is particularly evident
in the midstream oil and gas sector where, with the Company's
enhanced capabilities, Stantec is working on many large pipeline
and facilities projects. In the transportation sector, Stantec's
relationships, ability to adapt to changing trends, and increased
depth of expertise drive a steady share of projects such as bridge
inspections and design-build opportunities from repeat clients.
In the urban land sector, despite some soft regional markets,
Stantec continues to capitalize on opportunities, particularly in
the mid-to-high density brownfields market, with projects such as
one in Guelph, Ontario, to provide the planning, engineering,
environmental impact study, and traffic services in a mixed use
residential development on former industrial lands in the downtown
core.
Continued Growth
Stantec's strategic plan focuses on its strong local presence
across North America and leveraging its world class expertise to
the relationships the Company has at the local level. Stantec
further strengthened its geographic presence and depth of services
with three acquisitions in the second quarter. In May, IBE
Consulting Engineers Inc., based in Sherman Oaks, California,
joined Stantec, further enhancing Stantec's buildings engineering
presence on the US West Coast. Also in May, Stantec acquired
Ashley-Pryce Interior Designers Inc., based in Vancouver, British
Columbia, that will augment Stantec's interior design practice in
that area. In June, Stantec acquired civil engineering firm Roth
Hill, LLC. Based in Bellevue, Washington, the acquisition will
allow Stantec to expand water/wastewater and municipal service
capabilities in the Pacific Northwest.
Additional Company Activity
On July 9, 2013, Stantec extended its credit facility by one
year with no change in terms or conditions or covenants, and on
July 31, 2013, the Company declared a dividend of $0.165 per share,
payable on October 17, 2013, to shareholders of record on September
27, 2013.
Conference Call and Company Information
Stantec's second quarter conference call, to be held Thursday,
August 1, 2013, at 2:00 PM MDT (4:00 PM EDT), will be broadcast
live and archived in the Investors section of www.stantec.com.
Financial analysts who wish to participate in the earnings
conference call are invited to call 1-800-820-0231 and provide
confirmation code 7755151 to the operator.
Stantec provides professional consulting services in planning,
engineering, architecture, interior design, landscape architecture,
surveying, environmental sciences, project management, and project
economics for infrastructure and facilities projects. We support
public and private sector clients in a diverse range of markets at
every stage, from the initial conceptualization and financial
feasibility study to project completion and beyond. Our services
are provided on projects around the world through approximately
13,000 employees operating out of more than 200 locations in North
America and 4 locations internationally. Stantec is One Team
providing Integrated Solutions.
Cautionary Statements
Stantec's EBITDA is a non-IFRS measure, and gross revenue is an
additional IFRS measure. For a definition and explanation of
non-IFRS measures and additional IFRS measures, refer to the
Critical Accounting Estimates, Developments, and Measures section
of the Company's 2012 Financial Review. Figures for 2012 have been
restated for the adoption of IFRS 10, "Consolidated Financial
Statements" and IFRS 11 "Joint Arrangements" as further described
in note 4 of our Q2 13 unaudited interim consolidated financial
statements.
This press release contains forward-looking statements
concerning Stantec's future financial performance, future growth,
and future results from acquisitions. By their nature,
forward-looking statements require us to make assumptions and are
subject to inherent risks and uncertainties. We caution readers of
this press release not to place undue reliance on our
forward-looking statements since a number of factors could cause
actual future results to differ materially from the expectations
expressed in these forward-looking statements. These factors
include, but are not limited to, the risk of an economic downturn,
changing market conditions for Stantec's services, disruptions in
government funding, the risk that Stantec will not meet its growth
or revenue targets and the risk that the contemplated projects will
not be completed when expected or at all. Investors and the public
should carefully consider these factors, other uncertainties, and
potential events as well as the inherent uncertainty of
forward-looking statements when relying on these statements to make
decisions with respect to our Company.
For more information on how other material factors and other
factors could affect our results, refer to the Risk Factors section
and Cautionary Note Regarding Forward-Looking Statements in our
2012 Financial Review. Stantec's 40-F has been filed with the SEC
and you may obtain this document by visiting EDGAR on the SEC
website at www.sec.gov. Our 2012 Financial Review is also available
at the CSA website at www.sedar.com or at www.stantec.com.
Alternatively, you may obtain a hard copy of the Financial Review
free of charge upon request to our Investor Contact noted
below.
Consolidated Statements of Financial Position
(Unaudited)
June 30 December 31
2013 2012(i)
(In thousands of Canadian dollars) $ $
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ASSETS
Current
Cash and cash equivalents 22,765 40,708
Trade and other receivables 376,748 353,451
Unbilled revenue 199,312 148,908
Income taxes recoverable 6,152 3,840
Prepaid expenses 16,554 14,283
Other financial assets 17,877 17,670
Other assets 4,147 4,106
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Total current assets 643,555 582,966
Non-current
Property and equipment 130,966 114,994
Goodwill 587,928 566,784
Intangible assets 83,268 85,748
Investments in joint ventures and associates 3,384 5,286
Deferred tax assets 46,759 40,975
Other financial assets 64,340 63,691
Other assets 1,131 3,791
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Total assets 1,561,331 1,464,235
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LIABILITIES AND EQUITY
Current
Trade and other payables 207,277 211,726
Billings in excess of costs 67,377 60,822
Income taxes payable - 159
Current portion of long-term debt 44,620 42,888
Provisions 13,174 14,863
Other financial liabilities 3,305 1,672
Other liabilities 8,332 8,650
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Total current liabilities 344,085 340,780
Non-current
Long-term debt 250,073 256,408
Provisions 44,619 36,959
Deferred tax liabilities 62,024 57,840
Other financial liabilities 2,438 2,342
Other liabilities 51,102 42,778
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Total liabilities 754,341 737,107
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Shareholders' equity
Share capital 249,029 240,369
Contributed surplus 13,806 14,291
Retained earnings 539,766 491,227
Accumulated other comprehensive income (loss) 4,389 (18,862)
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Total equity attributable to equity holders of
the Company 806,990 727,025
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Non-controlling interests - 103
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Total equity 806,990 727,128
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Total liabilities and equity 1,561,331 1,464,235
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(i) Figures for 2012 have been restated for the adoption of IFRS 10 and IFRS
11.
Consolidated Statements of Income
(Unaudited)
For the two quarters
For the quarter ended ended
June 30 June 30
--------------------------------------------------
(In thousands of Canadian
dollars, except per 2013 2012(i) 2013 2012(i)
share amounts) $ $ $ $
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Gross revenue 566,724 473,410 1,079,931 909,606
Less subconsultant and
other direct expenses 97,275 77,550 183,630 143,276
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Net revenue 469,449 395,860 896,301 766,330
Direct payroll costs 214,946 180,961 411,471 349,892
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Gross margin 254,503 214,899 484,830 416,438
Administrative and
marketing expenses 187,749 158,317 363,137 312,003
Depreciation of property
and equipment 7,717 6,721 14,999 13,163
Amortization of
intangible assets 6,268 4,915 12,072 9,586
Net interest expense 2,247 2,444 4,566 4,661
Other net finance expense 751 644 1,349 1,494
Share of income from
joint ventures and
associates (361) (611) (569) (1,007)
Foreign exchange loss 218 308 324 29
Other (income) expense (60) 77 (368) 190
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Income before income
taxes 49,974 42,084 89,320 76,319
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Income taxes
Current 16,345 10,059 27,231 19,273
Deferred (2,502) 1,278 (2,489) 1,270
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Total income taxes 13,843 11,337 24,742 20,543
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Net income for the period 36,131 30,747 64,578 55,776
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Weighted average number
of shares outstanding -
basic 46,176,303 45,727,219 46,116,563 45,647,581
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Weighted average number
of shares outstanding -
diluted 46,479,367 45,727,219 46,414,325 45,647,581
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Shares outstanding, end
of the period 46,216,049 45,751,251 46,216,049 45,751,251
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Earnings per share
Basic 0.78 0.67 1.40 1.22
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Diluted 0.78 0.67 1.39 1.22
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(i) Figures for 2012 have been restated for the adoption of IFRS 10 and IFRS
11.
Contacts: Media Contact Stantec Inc. Danny Craig Media Relations
(949) 923-6085danny.craig@stantec.com Investor Contact Stantec Inc.
Crystal Verbeek Investor Relations (780)
969-3349crystal.verbeek@stantec.com
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