Bird Construction Inc. : Announces 2017 Fourth Quarter and Annual Financial Results
03/09/2018 | 02:41am CEST
LISTING: TORONTOSTOCK EXCHANGE SYMBOL: BDT
MISSISSAUGA, ON, March 8, 2018 /CNW/ -
During the fourth quarter of 2017, the Company generated a net income of $4.7 million on construction revenue of $377.7 million compared with net income of $5.8 million and $430.7 million of construction revenue in 2016. The year-over-year decline in the amount of fourth quarter net income is reflective of the lower construction revenues in the quarter.
In 2017, the Company generated net income of $11.6 million on construction revenue of $1,418.4 million compared with net income of $25.0 million and $1,589.9 million of construction revenue in 2016. The decrease in 2017 earnings is reflective of the low volume of industrial project backlog carried into 2017 as several large industrial projects were substantially completed in the fourth quarter of 2016. In 2016, the Company benefitted from a higher proportion of higher margin industrial work than in 2017, which has shifted to predominantly commercial and institutional projects.
In 2017, the Company secured $1,467.4 million of new contract awards and change orders which is 38% higher year-over-year, and executed $1,418.4 million of construction revenues. The success in securing new work through the year contributed to a Backlog of $1,186.0 million for the Company at December 31, 2017, an increase of $49.0 million from the $1,137.0 million of Backlog recorded at December 31, 2016.
In the fourth quarter of 2017, the Company was part of a consortium that has been contracted to design, build, finance and maintain Bruce Power's new office complex and training facility in Kincardine, Ontario. This project will be the Company's first in the nuclear market.
In the fourth quarter of 2017, the Company announced that it is part of the Hartland Resource Management Group consortium that was selected as preferred proponent to design, build, finance, operate and maintain the residuals treatment facility for the Capital Regional District ("CRD") in Victoria, BC. Subsequent to the 2017 year-end, the consortium executed the contract with CRD, and will add to the Company's Backlog in 2018.
The Company achieved substantial completion on three Public Private Partnership and alternative finance ("PPP") projects in 2017:
Calgary Composting Facility - The plant is the largest composting facility in Canada and has an administration and educational building that is the first commercial building in Alberta registered under LEED® v4.
Casey House Redevelopment – The project is a four-story addition to a heritage-designated Victorian mansion in downtown Toronto and is a specialized health care facility that will service 200 registered clients and has 14 new inpatient rooms.
Saskatchewan Joint-Use Schools – The Company delivered 18 new schools on nine sites in Regina and the Saskatoon region representing the largest new schools project in Saskatchewan's history. Each joint-use site includes two schools: one public and one Catholic, along with a 90-space childcare centre and community space. Joint-use schools are co-located so that they share a roof and spaces such as gymnasiums and multipurpose rooms.
In the fourth quarter of 2017, a PPP project achieved substantial performance in late December as defined in the provincial lien legislation but did not achieve substantial completion from a contractual standpoint. As a result, the Company took a provision to cover the additional escalation costs and financing costs from lenders that would result in the first quarter of 2018. The Company has taken appropriate measures and expects to achieve substantial completion in the first quarter of 2018.
In 2017, the Company has realized equity income of $1.8 million, through its investments in equity accounted entities compared with equity investment losses of $0.1 million recognized during 2016.
Cash used for property and equipment additions has increased $9.1 million compared with 2016. The additions support increased activity with self-perform activities on energy and resource related projects as well as diversification of the Company's service offerings to clients in these sectors.
The Board has declared monthly eligible dividends of $0.0325 per common share for March 2018 and April 2018.
"Fiscal 2017 was a challenging year for Bird and unfortunately the recent issues on a PPP project in which we did not achieve substantial completion on time impacted our fourth quarter negatively and overshadows the fact that we successfully delivered and handed over three PPP projects in the second quarter of this year. While financial results in the fourth quarter were lower than the expectations we set for ourselves, we are encouraged by the strength of our Gross Profit Percentage in the quarter which exceeded that of a year ago." said Ian Boyd, President and CEO of Bird Construction Inc. "I am pleased by the progress we are making in the execution of our Build Bird five-year strategic plan and in the successes we are having diversifying our earnings base including our recent wins in the environmental and nuclear sectors. We are seeing progressive improvements in market conditions in the energy and resource sectors and expect to see more strength come from our industrial work program in 2018."
(in thousands of Canadian dollars, except per share amounts)
Three months ended
Basic and diluted earnings per share
Cash flows from operations before changes in non-cash working capital
In 2017, the Company generated a net income of $11.6 million on construction revenue of $1,418.4 million compared with net income of $25.0 million and $1,589.9 million of construction revenue in 2016. The decrease in the amount of net income year-over-year is reflective of the low volume of industrial project backlog carried into 2017 as several large industrial projects were substantially completed in the fourth quarter of 2016. In 2016, the Company benefitted from a greater proportion of higher margin industrial work than in 2017, which has shifted to predominantly commercial and institutional projects.
The $13.4 million year-over-year reduction in net income for 2017 was the primary driver of the $18.8 million year-over-year reduction in cash flows from operations before changes in non-cash working capital. The year-over-year change in income tax expense of $4.1 million accounts for most of the remaining difference.
Bird Construction Inc. also announced that its Board of Directors has approved monthly eligible dividends for the months of March 2018 and April 2018 in the amount of $0.0325 per common share to be paid as follows:
The March dividend of $0.0325 per share will be paid on April 20, 2018, to the shareholders of record as of the close of business on March 29, 2018.
The April dividend of $0.0325 per share will be paid on May 18, 2018, to the shareholders of record as of the close of business on April 30, 2018.
A conference call for analysts and investors will be held at 10:00AM EDT on Friday, March 9, 2018, to discuss the quarterly results. The dial in number is 1-855-328-1925. Attendees are asked to be on the line 10 minutes prior to the start of the call.
This press release contains forward-looking statements that involve a number of risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. Many factors could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.
The Toronto Stock Exchange does not accept responsibility for the adequacy or accuracy of this release.