ADF Group (TSE:DRX) Issues Earnings Results

ADF Group (TSE:DRX) released its quarterly earnings results on Thursday. The company reported C$0.10 EPS for the quarter, FiscalAI reports. ADF Group had a net margin of 9.79% and a return on equity of 16.30%. The business had revenue of C$95.03 million during the quarter.

Here are the key takeaways from ADF Group’s conference call:

• Strong revenue and EBITDA growth: Second-quarter revenue rose to CAD 95 million, while adjusted EBITDA increased to CAD 8.4 million from CAD 3.7 million year over year. Year-to-date revenue and adjusted EBITDA were up 79% and 91%, respectively.
• Record backlog supports future activity: Backlog reached a record CAD 693.7 million, including CAD 243.3 million at Groupe LAR, with 64% tied to Canadian-based projects. Management expects margins to improve as the lower-margin legacy LAR backlog is completed.
• Reported earnings were reduced by non-cash and foreign-exchange items: Share-unit mark-to-market costs lowered net income by CAD 4.3 million in the quarter, while foreign-exchange losses reduced it by CAD 1.8 million. A CAD 20.2 million revenue and CAD 5.3 million gross-margin benefit from a customer-claim settlement also boosted the quarter and was non-recurring.
• Cash generation and expansion remain strong: Cash and equivalents rose to CAD 91.4 million, supported partly by a CAD 25 million claim-related inflow, while year-to-date operating cash flow reached CAD 47.1 million. ADF said its LAR expansion is on time and on budget and plans more than US$10 million of investment to expand and modernize its Great Falls facility.
• Tariff exposure remains uncertain but limited so far: Management said the new 50% U.S. tariff and latest U.S. proclamations do not currently directly affect ADF products, and relief is expected from Canadian counter-tariffs. However, steel costs and an approximately 10% charge on some Canadian-fabricated products shipped to the U.S. continue to pressure margins.

ADF Group Trading Down 8.3%

TSE DRX opened at C$13.76 on Friday. ADF Group has a 52 week low of C$6.90 and a 52 week high of C$18.44. The company has a 50 day moving average price of C$16.44 and a 200 day moving average price of C$12.88. The company has a quick ratio of 1.74, a current ratio of 2.20 and a debt-to-equity ratio of 20.56. The firm has a market cap of C$392.89 million, a PE ratio of 13.10 and a beta of -0.70.

About ADF Group

ADF Group Inc is a North American leader in the design and engineering of connections, fabrication, including the application of industrial coatings, and installation of complex steel structures, heavy steel built-ups, as well as in miscellaneous and architectural metals for the non-residential infrastructure sector. ADF Group Inc is one of the few players in the industry capable of handling highly technically complex mega projects on fast-track schedules in the commercial, institutional, industrial and public sectors.