North American Construction Group raised its full-year 2026 revenue outlook to a range of CAD 1.7 billion to CAD 1.8 billion while lowering its adjusted EBITDA forecast due to operational hurdles in Australia and a steep loss on a joint venture project.
TradingView reported that the company posted combined revenue of CAD 438 million for the third quarter ended September 30, marking a CAD 47 million increase from the same period a year earlier. Earnings before interest, taxes, depreciation, and amortization held steady at CAD 100 million, while Chief Financial Officer Jason Veenstra put adjusted earnings per share at CAD 0.25 on the earnings call.
The top-line expansion was largely powered by the acquisition of IMC in the second quarter, which contributed CAD 74 million in revenue. Excluding that purchase, Australian revenue grew organically by 5%, and Canadian revenue jumped more than 20% on a like-for-like basis. Veenstra attributed the Canadian growth to improved equipment availability and strong demand in the oil sands.
Offsetting those gains was an approximately CAD 50 million pretax impact from the Fargo joint venture project. Veenstra explained that a revised forecast received in early October increased total project costs by 9%, forcing the company to record a CAD 30 million increase in general and administrative costs alongside a CAD 20 million equity loss.
Because the project is in a contract loss position and approaching physical completion, management excluded the hit from adjusted results by classifying the venture as non-core.
President and Chief Executive Officer Barry Palmer pointed to delayed completion, schedule impacts, rework, and late cost increases as drivers of the Fargo write-down. Veenstra noted that North American Construction Group intends to enter future joint venture arrangements only when it retains operational control.
Operational pressures also weighed on Australian margins. Gross profit margin in the region dropped to 11.9% from 14% in the second quarter, sliding below the company’s target range of 15% to 20%.
Veenstra cited roughly CAD 10 million in extra parts and labor costs at a major Queensland site, alongside production inefficiencies stemming from a pit wall failure at a Western Australia site. Palmer cautioned that the Queensland maintenance expenses will likely persist through the end of the year.
By contrast, domestic operations showed improvement. Canada’s gross profit margin climbed to 10.5% from 7% in the previous quarter, driven by better maintenance capabilities, reduced repair costs, and fleet efficiency initiatives.
Reflecting these cross-currents, management narrowed its full-year adjusted EBITDA guidance to a range of CAD 370 million to CAD 400 million, lowering the midpoint to CAD 385 million from CAD 400 million. At the same time, the company raised the midpoint of its combined revenue forecast to CAD 1.75 billion.
Net debt was CAD 1.1 billion at the end of the quarter, with trailing 12-month net debt at 3.0 times, or 2.8 times based on the third-quarter run rate following the IMC integration. Veenstra stated that the company will direct free cash flow toward debt reduction to bring the debt-to-EBITDA ratio into the low twos over the medium term.
Contractual backlog stood at approximately CAD 3.2 billion as of September 30, supported by a bid pipeline exceeding CAD 15 billion.
