Edmonton-based North American Construction Group has been ranked 10th on a list of the 30 best performing stocks on the Toronto Stock Exchange.
EDMONTON – The TSX30 list looks at performance over the past three years based on dividend-adjusted share price appreciation.
Much of the company’s success can be attributed to restructuring decisions made in 2012, said Joe Lambert, president and chief operating officer at North American.
“We’ve gone through that belt-tightening for three years, so when that downturn came we were also in a position to have cash in the bank,” said Lambert last Thursday.
The company was also well positioned to focus on reducing costs for its oilsands clients, he said.
While mining and natural resource producers were represented on the TSX30, North American was the only stock from the Canadian energy sector on the list.
Based in Edmonton and Acheson for the past 66 years, North American has provided services to large oil, natural gas and resource companies. It trades on the Toronto Stock Exchange and the New York Stock Exchange under the symbol NOA.
The company’s restructuring period, which Lambert called “painful times,” included selling off two of its four main divisions — its piling and pipeline businesses. By 2014, the company was “rightsized. … We got our balance sheet in order. So when in 2016 the oil price dropped we were already in the spot we needed to be in,” Lambert said.
Despite the downturn in oilsands spending, North American managed to improve margins, gain market share, and generate a total return of 304 per cent over the past three years, according to a statement.
The company made two major acquisitions last year, including a 49 per cent stake in Nuna Logistics Ltd. — a civil construction and contract mining company based in Edmonton for $42.8 million — and a fleet of heavy equipment from Calgary-headquartered Aecon Group Inc.’s contract mining business for $198 million.
North American also opened a new $28-million dollar headquarters and maintenance facility in Acheson, and is building another 3,300 square metre (36,000 square foot) facility to further expand maintenance services for other companies, Lambert said.
“Being able to take an asset that’s at the end of its life, take it down to its frame and rebuild it, has been a great value for us in our business, and now we’re able to do that for others,” Lambert said.
For the 2018 fiscal year, North American reported a gross annual operating profit of $69 million, an earnings before interest, tax, depreciation and amortization of $88.7 million, and a cash dividend of $0.08 per share.