ATCO (ACO-X) Q3 2024 earnings summary

Executive summary

• Adjusted earnings for Q3 2024 were $91 million ($0.81/share), up 12% or $10 million year-over-year, driven by strong Canadian utilities, Structures, and new hydrogen initiatives.

• IFRS earnings attributable to Class I and II shares were $93 million ($0.83/share), up $2 million year-over-year, reflecting timing adjustments and non-recurring items.

• Revenues increased year-over-year, supported by higher activity in workforce housing, space rentals, and regulated utilities rate base and ROE.

• Portfolio strategy focuses on essential services, balancing stable yield, growth, and long-term capital appreciation.

• Closed the $40 million acquisition of NRB Limited, expanding modular manufacturing and national presence.

Financial highlights

• Q3 2024 revenues were $1,116 million, up $58 million year-over-year; adjusted earnings per share were $0.81 (vs. $0.71 in Q3 2023).

• Earnings attributable to Class I and II shares under IFRS were $93 million for Q3 2024, up from $91 million in Q3 2023.

• Cash flows from operating activities were $462 million in Q3 2024; total assets at September 30, 2024, were $26,052 million.

• Q3 2024 capital expenditures totaled $414 million, with 94% invested in regulated utilities.

• Q3 2024 restructuring costs were $6 million, mainly related to staff reductions.

Outlook and guidance

• Utilities' allowable ROE expected to reset to 8.97% in 2025, with earnings growth moderating next year.

• Construction of the Yellowhead Mainline natural gas project is expected to begin in 2026, with completion in late 2027, pending regulatory approval.

• Dividend growth is expected to continue, aligned with sustainable investment growth; Q4 2024 dividend declared at $0.4898 per share.

• Ongoing focus on energy transition, hydrogen development, and sustainability initiatives, including FEED for the AH3 hydrogen project.

• ATCO Australia received regulatory approval for new gas distribution tariffs for 2025–2029, with a higher allowed ROE.