Aecon Group reported a record backlog in its first-quarter results, highlighting strong demand for infrastructure and energy projects despite typical seasonal earnings pressure.
BNN Bloomberg spoke with Maxim Sytchev, managing director of industrial products at National Bank Capital Markets, who said improved contract structures and growth in nuclear and utilities are strengthening the company’s long-term outlook.
Key Takeaways
- Aecon’s backlog reached a record $10.9 billion, reflecting strong infrastructure and energy project demand.
- First-quarter revenue rose 18 per cent year over year, despite typical seasonal earnings pressures.
- The company has reduced risk by shifting away from lump-sum turnkey contracts toward more collaborative project models.
- Nuclear and utilities now represent a significant share of revenue and are key drivers of future growth.
- Investor interest is shifting toward construction firms, supported by Canadian infrastructure spending and project pipelines.
Read the full transcript below:
ROGER: The Toronto-based construction company Aecon reported a record backlog of nearly $11 billion. It expects 2026 revenue to exceed 2025 due to its backlog and other factors.
Joining us now to discuss this and more is Maxim Sytchev, managing director of industrial products at National Bank Capital Markets. Maxim, thanks as always for joining us.
MAXIM: My pleasure. Good to see you.
ROGER: Record backlog, but there was also a loss. What unfolded this quarter?
MAXIM: Backlog is up 12 per cent year over year to almost $11 billion. Revenue actually increased 18 per cent and, given the seasonality — especially in Canada — there is typically an earnings per share loss in the first quarter, which was in line with estimates.
But the market tends to focus more on EBITDA, and that number beat expectations at $32 million versus consensus of $27 million. Overall, it was a very strong quarter.
JOHN: Maxim, good to see you.
MAXIM: Likewise.
JOHN: This has historically been a cyclical industry and stock, but it’s had a strong run over the past year. There used to be more long-term fixed-price contracts, which carried risk due to cost overruns. Is that still a concern?
MAXIM: That’s a very good point. Two things have changed. First, the company has significantly de-risked its contractual profile by doing fewer lump-sum turnkey projects. That reduces the risk of project-specific issues over time.
Projects like Eglinton and other LRT builds have been completed, and now only one major lump-sum contract remains — the Gordie Howe project — which is expected to be completed in the second quarter.
Second, procurement methodology in Canada has changed. Previously, companies were asked to commit to fixed prices before full engineering work was completed, which led to cost overruns.
Now, there is a more collaborative approach between developers, construction firms and engineers. Projects are fully developed before being converted into fixed-price contracts. This shift over the past several years has significantly reduced the risk of negative surprises and improved the industry structure.
ROGER: It sounds like you like what they’re doing. Do you see other changes that could make results smoother?
MAXIM: Yes. It’s also about end-market exposure. Nuclear now represents 28 per cent of the company’s top line, and utilities account for another 18 per cent. Both are growing rapidly.
In Ontario, decisions around nuclear development are still pending, but Aecon is technology-agnostic and will participate regardless of the outcome. Utilities are also a strong market, particularly in the U.S., where the company has expanded through acquisitions.
Utilities now represent about $1 billion in revenue, making it a significant standalone business. So it’s both the improved contract structure and exposure to growing markets that support our positive view.
JOHN: Interesting to hear nuclear is now 28 per cent. How do you rank Aecon relative to peers?
MAXIM: The market is focused on nation-building projects in Canada, while also considering potential AI disruption. What we’re seeing is a shift in fund flows favouring construction companies over engineering firms.
For the first time, construction companies are trading at higher multiples than engineers. While AI may ultimately be an enabler for engineering firms, market perception currently favours construction.
So for investors looking to benefit from current trends, we believe construction — particularly those leveraged to Canadian infrastructure — is where capital is being deployed.
ROGER: One last question — recent acquisitions like KPC. How are they progressing?
MAXIM: These are still early-stage contributions, but they align with the company’s strategy to expand its utilities exposure. That strategy has been a key driver of the company’s strong growth over the past year.
ROGER: We’ll leave it there. Maxim, thanks as always.
MAXIM: My pleasure.
ROGER: Maxim Sytchev, managing director of industrial products at National Bank Capital Markets.
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This BNN Bloomberg summary and transcript of the April 29, 2026 interview with Maxim Sytchev are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
