North American Construction Group Ltd. announced its financial results for the first quarter ended March 31, 2025, on May 14, 2025. The company reported revenue of $340.8 million, a 15% increase from Q1 2024, and combined revenue of $391.5 million, up 13%, marking the second-highest quarter in company history.
Despite top-line growth, profitability was significantly impacted by severe weather conditions across both operating geographies. Heavy Equipment - Australia saw revenue increase by 18%, but equipment utilization dropped to 68% from 80% in Q1 2024 due to excessive rainfall, which was nearly double historical averages at the Carmichael mine. This led to gross margins being over 10% lower than operational expectations in that segment.
In Canada, the Heavy Equipment segment's revenue increased by 13%, but operating margins were affected by an extended cold snap in the oil sands region, impacting gross profit margin by an estimated 5% to 7%. Additionally, extraordinary early component failures related to a discontinued third-party vendor agreement impacted margins by $4.3 million.
Adjusted EBITDA saw only a slight 3% increase to $99.9 million, and the adjusted EBITDA margin decreased to 25.5% from 28.2% in Q1 2024. Adjusted earnings per share (EPS) declined by 34.2% to $0.52 from $0.79 in Q1 2024, primarily due to higher depreciation expenses and increased interest expenses from the MacKellar acquisition. Free cash flow was a use of cash of $41.6 million, driven by working capital consumption.
The company reiterated its full-year 2025 expectations, anticipating more stable conditions for the remainder of the year. Separately, Dr. Vanessa Guthrie, AO, resigned from her position as a director of NACG effective May 14, 2025, for personal reasons.
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