APTIM’s earnings soften in 1Q21; backlog and new awards show sequential growth

APTIM released 1Q21 earnings, disclosing year-over-year declines in revenue and adjusted EBITDA for the three-month period, according to two sources familiar with the situation. But the engineering and construction services company’s backlog and new awards grew sequentially, pointing to future earnings momentum, the sources added.

For 1Q, revenue totaled USD 309.8m, down 5% from USD 324.6m the year prior, but up 2% sequentially from USD 303.8m. EBITDA in the quarter shook out to USD 7.1m, up from USD 6.3m last year. 

Before adjusting for the cap on addbacks, adjusted EBITDA totaled USD 9.5m, down from USD 12.2m in 1Q20. On a post-cap basis, adjusted EBITDA was USD 9.5m, down from USD 11.2m in 1Q20. 

Veritas-backed APTIM also reaffirmed EBITDA expectations at a 25bps to 50bps increase in EBITDA margins for 2021, which translated to a 4.5% increase from its 2020 adjusted EBITDA, the source added.

During 1Q, APTIM generated USD 446m of new awards, compared to USD 245m in 4Q20. At quarter-end, backlog totaled USD 1.7bn, up 8% from year-end 2020, sources added.   

As of 31 March, the company is 9.36x levered through USD 515m of total debt and USD 55m of LTM adjusted EBITDA. Liquidity stood at USD 175.3m through USD 157.7m of cash and USD 17.6m of ABL availability. 

APTIM has struggled with contract losses since Veritas 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% senior secured notes due 2025 last traded in size at 87 to yield 11.848% on 11 May, according to MarketAxess. Prior to the earnings report, released on 26 April, the bonds traded at 85.25 to yield 12.371%.  

Officials from APTIM did not respond to a request for comment. Veritas declined to comment.

2021 Debtwire

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