Stantec has announced a significant increase in its financial performance for the second quarter (Q2) ending 30 June 2024.
The company saw a 16.8% rise in net revenue, reaching $1.5bn, spurred by both an 8.8% acquisition and an organic net revenue increase of 7.1%.
Stantec said that it experienced robust organic growth in all regional and business operating units, except for Energy & Resources.
Notably, the company’s Water and Buildings businesses achieved double-digit organic growth. Project margin also saw an increase, rising by 17.0% to $811.7m, which is 54.4% of net revenue.
Adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) for Stantec rose 14.5% to $247.3m, maintaining a margin of 16.6%.
Despite a slight decrease compared to the same quarter in the previous year, the adjusted EBITDA margin remained within expectations. The company attributes the change to normalising claim provision estimates.
However, net income saw a decline of 3.9% to $84.6m, and diluted earnings per share (EPS) decreased by 6.3% to $0.74.
These decreases were primarily due to a non-cash impairment charge from Stantec's real estate optimisation strategy and increased administrative and marketing expenses.
The company's contract backlog has increased to $7.2bn as of 30 June 2024, with acquisition and organic growth contributing to this rise since 31 December 2023.
Stantec's net debt to adjusted EBITDA ratio was 1.7x, which is within the company's internal target range.
Year-to-date comparisons show that net revenue for the first half of 2024 increased by 14.2% to $2.9bn, and adjusted EBITDA grew by 16.2% to $459.2m. Net income and diluted EPS also saw increases of 7.3% and 4.3%, respectively.
Looking ahead, Stantec has updated its 2024 guidance, now expecting net revenue growth to be between 12% and 15%, slightly raising the lower end of its previous forecast.
Stantec president and CEO Gord Johnston said: "Our outlook for the full year remains very positive and we are well positioned to deliver strong results for the year as we continue to execute our three-year strategic plan."
