CA - North American Construction Group: Steady Project Flows Curtailed By Utilization Concerns

2024-07-04 08:21:33 ET

Summary

• NOA has opportunities in the Australian heavy equipment market and oil sands industry, with recent awards improving asset utilization.
• Despite undervaluation, NOA's balance sheet with high debt and deteriorated cash flows raises concerns for strong returns in the short term.
• Acquisition of MacKellar diversified NOA's portfolio, but challenges like adverse weather and asset mobilization affected recent performance.

NOA Has Its Share of Opportunities And Challenges

I discussed North American Construction Group ( NOA ) in the past, and you can read the previous article here , published on July 7, 2023. NOA's recent awards will go a long way in improving its asset utilization. While oil sands can continue for the next several years, there is a growing market for heavy equipment in Australia, and the strong demand for heavy equipment will also drive it forward. Also, multiyear projects in Australia (Quebec and South Australia) involving mining should help with utilization....

For further details see: