Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
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| Reported revenue, primarily generated by our core heavy equipment fleet, was up 37% quarter-over-quarter, with the driver of this increase being equitable contributions from adjusted equipment and unit rates as well as improved equipment utilization |
| Return on invested capital of 14.3% is the highest return ever as well as trailing 12-month EBIT of $132 million was generated on relatively stable invested capital |
| I often refer to us as a safe, low-cost contractor, and I'm happy to report that on the safety front, we have made significant improvements, and we will always work towards our model of everyone gets home safe |
| Another great quarter |
| So that's where that -- I think we put in that chart, and don't quote me on it, that there's like 1% to 3% margin improvement over the next three-odd years that we expect, and that's kind of based on our history of what we've done in those fleets |
| In the last five years, we've been able to start improving our margins and our profits in our business, and we see that going forward |
| We also believe we have a good chance of being awarded an approximate $75 million over five-year scope for fueling and servicing of an oil sands customer's equipment fleet |
| History is not only a great teacher, but a pretty good gatekeeper as well, and our competitive position is as strong as ever |
| Adjusted EBITDA of $85 million was exceptionally close to the Q4 2022 record of $86 million and was based on the strong margins previously mentioned |
| Combined with safety, low-cost operations is the advantage that works throughout any commodity cycle, and we do this by being good operators and world-class maintenance providers |
| Operating margins benefited from the ML Northern acquisition from both lower internal costs as well as strong margins from the services provided to external customers |
| Combined gross profit margin of 17.4% was a significant improvement from the 13.7% we posted last year in Q1 and reflected strong operational performance in the quarter as our primary operations in the Fort McMurray, Northern Canada and Northern Ontario regions experienced predictable and productive cold weather conditions for the whole quarter |
| We have had a great winter work season and are confident that we will continue to build on what was another outstanding quarter |
| And we're in a very unique environment right now, Bryan, where we have extremely high demand and consistent demand |
| Nuna Group of Companies had another solid quarter of activity at the gold mine in Northern Ontario and the core business has operated at better than historical levels |
| ML Northern, acquired on October 1, provided another full quarter of fuel and lube delivery, and has had an excellent first six months with us |
| Equipment operating hours were up over 20% in the quarter as stable operational and maintenance headcount yielded utilization of 79%, which was significantly higher than the Q1 2022 metric of 65% |
| Stable equipment and operating costs have allowed NACG to offer increasingly competitive rates to clients while improving our bottom-line, a true win-win |
| Slide 18 highlights the continuing strong demand in active project tenders |
| In addition, revenue benefited from the continued growth of top-line revenue from rebuilt haul trucks as well as purchased excavators owned directly by our joint venture with Mikisew, and the increasingly important impact of the joint ventures dedicated to the Fargo-Moorhead flood diversion project |
| So, we have strong expectations, strong enough such that we forecasted that growth capital in there |
| On Slide 9, you'll see we achieved our highest Q1 utilization in five years after just having posted our highest Q4 on record, and the demand for our fleet remains high |
| Our trailing 12-month total recordable rate of 0.36 represents a significant improvement from last year and the Q1 rate of 0.30 matches our Q4 best last year |
| With our strong Q1 results, progress on priorities, and focus on carrying some of that momentum into the summer, we've been able to meaningfully increase the midpoints for all of our key financial metrics |
| First, and as many of you have previously heard, other than the obvious pandemic impacts in 2020, our diversification efforts over the last several years have delivered in expectations and demonstrated higher Q2 and Q3 fleet utilization as we have moved the smaller underutilized portions of our heavy equipment fleet out of oil sands and into other geographies and commodities where they have achieved more operating hours |
| We likewise expect our progress on increasing the maintenance labor workforce will directly correlate to continued improvements in fleet utilization |
| In closing, I would just like to thank the great team I have here at NACG and all of our partners for all your efforts and support in helping us achieve these strong results as we continue to exceed expectations |
| As far as the infrastructure outlook, I believe we see that market is good |
| 20% IRR, three to four-year payback sort of timeframe with -- these are longer life assets, but yes, very strong economics |
| On a total combined basis, revenue was 35% ahead of Q1 2022 |
| Statement |
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| Our forecast right now for the year is to be slightly below that range |
| Unidentified Analyst So, backlog is down, and I understand that's really just due to the timing issue related to a large regional oil sands tender |
| It will be a little softer, muddier conditions |
| I think I might be wrong on this, but I think when the markets were tougher, you had to give a lot of that margin that paid away to your clients |
| The 0.36 achieved gets us back below our industry-leading target frequency of 0.5, and we'll be focusing our efforts in 2023 on continuing improvements |
| Deleveraging at these higher interest rates carries a little more value than it has historically as well |
| And so, you're going to -- we're going to have what we believe is a huge increase this year, and that will drain down over five years and then another one, so it will be very lumpy |
| And I'd say the first five years, we had to give it all away just to maintain our volumes in our market |
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