N.A. Construction signs $800-million contract extension

Executive Summary

• North American Construction Group Ltd. (via its subsidiary MacKellar Group) has secured an amended and extended five-year mine service contract with a leading coal producer in Queensland, Australia.
• The contract carries a total value of approximately $2.0 billion and extends through April 30, 2030, representing the largest contract in the company's history.
• This award increases the company's total contractual backlog to a record $4.0 billion (pro forma as of March 31, 2025), up from $3.2 billion previously reported, providing revenue visibility through 2029.

Key Details

• Contract Value: Approximately $2.0 billion total backlog for the specific Queensland contract.
• Contract Duration: Five-year term, expiring April 30, 2030.
• Backlog Impact: The extension adds $800 million to the original contract value.
• Total Company Backlog: Increases to $4.0 billion on a pro forma basis as of March 31, 2025 (previously $3.2 billion in Q1 2025 MD&A).
• Previous Record: Surpasses the prior company record of $3.5 billion reported on December 31, 2024.
• Australian Operations Backlog: Stands at $3.0 billion (pro forma as of March 31, 2025), providing top-line visibility through 2029.
• Contract Terms: Amendments introduce risk and reward mechanisms to align North American Construction with the producer. The contract does not contemplate growth capital, with backlog values generally based on the existing run rate of the mine.
• Client: An existing leading coal producer in Queensland, Australia.

Notable Quotes

• Joe Lambert, President and CEO: "Signing the largest contract in our history is a testament to the consistent execution and trusted partnerships we've built... With record-high backlog, including over $3.0-billion from Australia alone, we have exceptional revenue visibility through the decade and a rock-solid foundation for long-term growth."
• Barry Palmer, COO: "This is an exciting extension for the MacKellar Group with it being a tangible demonstration of the successful and productive relationship we've had with this customer since inception in 2022... We are devoted to and aligned with this customer's continued success, and look forward to delivering tangible results on site."