WSP profits, backlog up, buoyed by US projects

Dive Brief: 

  • Montreal-based engineering and design giant WSP reported that profits, revenues and backlog all rose from last year in its Q1 earnings report Wednesday. CEO and President Alexandre L’Heureux highlighted several project wins from the past quarter, including designing the Calgary Green Line light rail project and advisory services for Coventry University’s National Centre for Accessible Transport in the U.K.
  • The firm announced a profit of $112.5 million Canadian dollars ($83.41 million), or CA$0.90 per share, up 18.4% from CA$95 million during the same period last year. Its revenues reached CA$3.49 billion, up 28.7% year over year, while backlog stood at CA$13.8 billion, up 25.5% from Q1 of 2022.
  • L’Heureux said on a Thursday investor call that the company’s backlog and pipeline was robust across all sectors, and that it plans to continue its strategic acquisitions around the world to take advantage of opportunities.

Dive Insight:

On the call, L’Heureux reiterated the company’s financial outlook “with confidence” and said he was feeling especially positive about work in the United States, its biggest market. WSP’s permitting, planning and transportation businesses are particularly strong there right now.

“The infrastructure bill, the Inflation [Reduction] Act and all of those initiatives are helpful to our company and to this industry, so I feel good about the future, and actually not just for the foreseeable future but for the next few years, the U.S. should experience very good performance,” L’Heureux said.

The broader economic climate does pose challenges however. If interest rates continue to rise, L’Heureux said he would expect to see financial sponsors be less active, though he has not seen them exiting investments yet. While the office market is in a slump, he sees “tremendous opportunity” in rehabilitating existing commercial real estate into mission critical buildings such as data centers. 

Over the past five years, WSP has diversified its portfolio of work and focused more on health care, data centers and mission critical projects, per L’Heureux, and he expects strong growth in clean energy transmission and distribution, especially solar and wind.

WSP bullish on acquisitions, tech

L’Heureux said he sees artificial intelligence and other new technologies as enablers — as opposed to disrupters — that will allow the firm to provide additional services to clients and grow profits. He also expects the role of engineers to evolve more into advisors and analysts for clients, and believes in the future they will be able to do more stress and scenario testing via digital twins.

The firm is increasingly involved in cloud-based computing and other tech projects, according to L’Heureux, and he expects growth in those areas.

WSP is continuing its acquisition spree, and finalized two in the last quarter:

Other acquisitions include:

  • Lgt, a Quebec-based building engineering firm that will help WSP take advantage of cloud computing and other tech projects. WSP finalized the purchase on May 3. 
  • Calibre Professional Services, an Australian firm that provides sustainability services across the full mining life cycle. WSP announced the plans on April 5.
Leave a comment