The stock of Quebec civil engineering giant WSP Global rose to a new high of $217 per share during the day on Thursday, after the announcement of 2023 end-of-year results better than expected by investors and analysts.
In addition, WSP management disclosed new results targets for the 2024 financial year which, if achieved, would place the multinational ahead of its strategic development plan.
“WSP concluded a solid end to the financial year in 2023 and presented new upgraded forecasts for the whole of 2024, while the favorable situation in the civil engineering market and the quality of its management had already put it in “on track to exceed the previous objectives of its strategic plan,” commented analyst Maxim Sytchev, of National Bank Financial, in a note to his clients.
In its 2023 year-end results, announced Wednesday evening, WSP said its total revenues (from ordinary activities) for its 4e quarter amounted to 3.7 billion, up 4.6% year-on-year.
Quarterly operating profit (adjusted EBITDA) reached 524.9 million, up 17.6% year-on-year, while net profit (adjusted) was 247.8 million, up 18 % over one year.
For the full financial year 2023, WSP recorded total revenues of 14.4 billion, a strong increase of 21% (7% from internal growth and 12% from acquisitions).
Net income (adjusted) for fiscal 2023 was $860 million, or $6.90 per share, up 24% year-over-year.
“We have concluded a year of significant growth and consolidation in 2023,” said Alexandre L’Heureux, President and CEO of WSP Global, in his comments on the quarterly results.
“As we continue to move forward and realize our ambitions, we enter the final year of our strategic plan [de trois ans] with confidence fueled by healthy market conditions and sustained growth opportunities. »
Started in 2022, this strategic development plan was first marked by the acquisition for US 1.81 billion of the environment and infrastructure activities of the British group John Wood.
Since then, WSP has acquired four other engineering companies based on three continents, bringing its total workforce to just over 66,000 employees.
Record new contracts
Building on this momentum, during fiscal 2023, WSP pushed its new contract wins to a record level, which allowed it to end the year with an order backlog valued at $14.1 billion, up by 8.2% over one year.
During the conference call with analysts on Thursday morning, Alexandre L’Heureux indicated that the main source of growth in 2024 would still be activities in the United States and Canada, while WSP continues to benefit from the investment program. in infrastructure of 1,200 billion US dollars launched by the United States government in November 2021.
“We continue to see positive momentum coming from the bipartisan bill [au Congrès américain] on infrastructure investments,” said Mr. L’Heureux.
“The biggest opportunities for this program in the United States and other stimulus programs globally are in roads, bridges and large transportation projects,” according to the president of WSP Global.
This is also a sector of activity where the company experienced a strong increase in revenue in 2023.
Additionally, WSP continues to diversify its activities to meet demand in “hypergrowth sectors” such as healthcare, hospitality, data centers and manufacturing.
PHOTO PATRICK SANFAÇON, LA PRESSE ARCHIVES
The president of WSP Global, Alexandre L’Heureux, in 2019
“We are ensuring the sustainability of WSP Global to support our growth ambitions,” emphasized Alexandre L’Heureux.
In the meantime, analysts continue to maintain a rather favorable outlook regarding WSP’s market valuation.
As of Thursday, there were 12 buy recommendations for the company’s shares, compared to one “hold” and one “sell” recommendation.
As for the average target price for WSP shares, analysts place it around $219, a few dollars above their recent stock price.