North American Construction Group Sees $100M+ Free Cash Flow by H2 2025 Amid Australian Growth and Contract Wins

North American Construction Group Ltd. (NOA) expects to return to $100M+ free cash flow in H2 2025, driven by record Australian growth and new contract wins. The company's Q2 2025 EBITDA reached $80M, with a 21.6% margin, despite being impacted by certain factors. NOA's management is optimistic about the future, citing strong performance in Australia and new contract wins.

North American Construction Group Ltd. (NOA), a leading provider of heavy civil construction and mining services, has outlined its plans to achieve $100 million in free cash flow during the second half of 2025. The company's second-quarter (Q2) 2025 financial results, released on August 13, 2025, showed mixed performance, with revenue growth and a significant decline in profitability [1].

In Q2 2025, NOA reported a 12% increase in combined revenue to $370.6 million, driven by strong performance in its Australian and Canadian heavy equipment segments. However, profitability metrics declined significantly, with adjusted earnings per share (EPS) falling by 98% to $0.02 and adjusted EBITDA decreasing by 12% to $80.1 million [1]. The company attributed these issues to operational disruptions in Australia and Canada, as well as a one-time reduction in equity earnings from the Fargo project [1].

Despite these challenges, NOA's management remains optimistic about the company's future. The company's free cash flow use of cash for Q2 2025 was $0.4 million, an improvement from the $10.5 million cash use in Q2 2024. Management expects to return to $100 million+ free cash flow in H2 2025, driven by record Australian growth and new contract wins [1].

NOA's Q2 2025 EBITDA reached $80 million, with a 21.6% margin. The company's adjusted EBITDA margin was calculated using adjusted EBITDA over total combined revenue. The company's net debt increased to $896.9 million, up $29.5 million from the previous quarter, primarily due to growth capital expenditures [1].

Management has maintained its full-year revenue guidance but revised downward its EBITDA and EPS projections for the second half of 2025, citing increased costs related to demand volatility and maintenance requirements. H2 2025 Adjusted EPS is now expected to be $1.40-$1.60, down from previous guidance of $1.95-$2.15 [1].

The company's outlook for 2025 remains positive, with long-term growth targets of 5-10% annual organic revenue growth. Management expects revenue in the remainder of 2025 in the oil sands business to be consistent with original expectations, but with increased costs due to demand volatility and near-term costs on its largest truck fleets [1].

NOA's Board of Directors declared a regular quarterly dividend of twelve Canadian cents ($0.12) per common share, payable to common shareholders of record at the close of business on August 29, 2025 [1].

References:
[1] https://www.stocktitan.net/news/NOA/north-american-construction-group-ltd-announces-results-for-the-3kn3ip97hb7a.html