APTIM EBITDA slumps 46% YoY as cost savings roll off

APTIM’s 1Q20 adjusted EBITDA came in at USD 12.1m, before adjusting for the cap on addbacks, according to two sources familiar with the matter. That’s down 46% year-over-year from USD 22.6m.

Post-cap, the engineering and construction services company generated USD 11m of adjusted EBITDA at 1Q, up YoY from USD 10.1m, the sources continued. Revenue reached USD 325m for the quarter, down 7% YoY from USD 349m.

While APTIM has been adding cost savings to boost its bottom line, those initiatives are rolling off, one of the sources said. Management said it continues to streamline the business with various initiatives, said the source.

APTIM’s LTM leverage ballooned to 19.7x at the end of the recent period, based on USD 515m of total debt and USD 26.1m of post-cap adjusted LTM EBITDA, the sources noted.

Amid soft earnings and liquidity pressures, APTIM last month sold a USD 153m package of receivables tied to its US Virgin Islands business at a steep discount. The company received USD 71.3m in cash proceeds, slated to fund general corporate purposes.

Liquidity at 31 March totaled USD 181m, consisting of USD 159.7m of cash and USD 21m of availability under its undrawn ABL facility.

APTIM has been struggling with contract losses since Veritas Capital acquired the business from Chicago Bridge & Iron in 2017. The USD 755m deal was partly financed with a USD 515m secured bond issue.

The USD 515m 7.75% secured notes due 2025 last traded at 35.375 on 19 May, up from the 34-34.25 context in early April. The notes have recovered from a low of 31.5 on 24 March, but are still down from 57 in early March, according to MarketAxess. 

APTIM did not respond to a request for comment.

2020 Debtwire

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