ATCO (ACO-X) Q2 2024 earnings summary

Executive summary

• Q2 2024 adjusted earnings were $96 million ($0.86/share), up $9 million or 10%–12% year-over-year, driven by strong performance in structures, utilities, and energy systems, while IFRS earnings were $52 million ($0.46/share), down $27 million due to non-recurring items.

• Revenues for Q2 2024 were $1,112 million, up $8 million year-over-year, with growth in workforce housing, space rentals, and regulated rate base.

• Significant contracts awarded in Australia and the US for construction camps and modular units, supporting mining and infrastructure projects.

• Announced major energy infrastructure projects, including the $2 billion Yellowhead Mainline and the Atlas Carbon Storage Hub in partnership with Shell.

• Streamlined cost structure and refreshed teams to align with growth ambitions for the second half of the year.

Financial highlights

• Q2 2024 adjusted earnings: $96 million ($0.86/share, +$0.09 YoY); IFRS earnings: $52 million ($0.46/share, -$0.24 YoY); revenues: $1,112 million (+$8 million YoY).

• ATCO Structures delivered adjusted earnings of $29–$30 million, up 15% year-over-year.

• Canadian Utilities adjusted earnings were $59–$62 million, driven by rate base growth and higher ROE.

• Cash flows from operations in Q2 2024 were $564 million, up $152 million year-over-year.

• Capital expenditures in Q2 2024 totaled $322–$365 million, with 84%–95% invested in regulated utilities.

Outlook and guidance

• Three-year capital investment plan for Energy Systems updated to $4.3–$4.7 billion, with a mid-year rate base CAGR of 3.5%–4.3%.

• Construction of the Yellowhead Mainline pipeline expected to begin in 2026, with completion in Q4 2027.

• Atlas Carbon Storage Hub phase one targeted to be operational in late 2028, supporting hydrogen and carbon abatement initiatives.

• EnPower renewables pipeline totals 1.3 GW with $2.4–$2.6 billion development capital, targeting commercial operations through 2030.

• Dividend growth expected to continue in line with sustainable investment growth.