Major Canadian engineering services group WSP Global says its record work backlog can underpin further growth in revenue and earnings after it reported a June quarter of “accelerating operating momentum”.
“In a market where investors are increasingly focused on long-term visibility we believe our backlog, sub-backlog and pipeline of opportunities provide a clear indication of future growth potential,” CEO Alexandre L’Heureux told analysts on a call after WSP posted 28.8% higher EBITDA of C$815 million, compared with a year ago, and a 22.9% year-on-year rise in net revenue to $4.27 billion.
Net revenue was at the higher end of management’s outlook range for the quarter of $4.1-4.3 billion. Full-year guidance is now at $16.2-17 billion of net revenue and $3.1-3.18 billion of EBITDA. Last year’s comparables were $13.96 billion and $2.56 billion, respectively.
L’Heureux said WSP was seeing healthy demand across its portfolio.
“The strongest areas of demand we see today are directly linked to long-term duration investment themes, including AI-enabled digital infrastructure, power generation and transmission, data centres, critical minerals, defence and nuclear energy,” he said.
“WSP is involved in some of the largest and more complex projects globally. For example, our top 20 opportunities alone represent more than C$4 billion in potential revenue.
“Defence, mining, transportation, power and energy, and nuclear together make up of one of the most compelling growth profiles in our portfolio in Canada and globally and we expect that to continue.”
L’Heureux said WSP’s domestic pipeline was “exceptionally deep” and momentum was broad-based.
“In defence we hold a position few can match. WSP is the leading direct provider of engineering and environmental services to Defence Construction Canada, with hundreds of projects underway nationwide and over 25 active master service agreements.
“Our pipeline has doubled in the past year, positioning us as a strategic partner on major current and upcoming opportunities.
“In mining, our recognised global leadership with more than 5000 professionals worldwide helped us convert several major opportunities.
“Capital keeps moving toward critical minerals driven by AI, electrification, grid expansion and energy transition.”
L’Heureux said the company’s data centre sales pipeline had also expanded by about 30% in 12 months.
“Ranked number one in data centre design by Engineering News-Record, WSP now supports more than six sites with more than one gigawatt of compute power capacity and is a trusted partner to the 70 clients we serve in this sector, which has doubled in the last year,” he said.
He highlighted the US nuclear sector as another market that was scaling quickly.
“We are now supporting 22 new sites across the US, spanning site selection, licensing, design and construction support and we recently won a role in the primary design of an industry-first gas to nuclear SMR project with Blue Energy at the Port of Victoria site in Texas,” L’Heureux said.
“Few firms can operate across the full cycle of nuclear program and that is precisely where the market is heading.”
The CEO said WSP’s water infrastructure business was also up 20% yoy and “is another fast-scaling part of our portfolio”.
And he highlighted a return to growth after six quarters of negative impetus in the Asia Pacific region, “powered by a notable turnaround in Australia”.
