Morning, and thank you for attending today's 2021 year-end results for Aecon Group. My name is Jason, and I'll be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you'd like to ask a question, please press star one on your telephone keypad. I would now like to pass the conference over to our host, Adam Borgatti. Adam, please proceed.
Thank you, Jason. Good morning, everyone, and thanks for participating in our year-end 2021 results conference call. This is Adam Borgatti speaking, and presenting to you this morning are Jean-Louis Servranckx, President and CEO, and David Smales, Executive Vice President and CFO. Our earnings announcement was released yesterday evening and we posted a slide presentation on the investing section of our website, which we will refer to during this call. Following our comments, we'll be glad to take questions from analysts. We ask that analysts keep to one question before getting back into the queue to ensure others have a chance to contribute. As noted on slide two of the presentation, listeners are reminded that the information we're sharing with you today includes forward-looking statements. These statements are based on assumptions that are subject to significant risks and uncertainties.
While Aecon believes these expectations reflected are reasonable, we can give no assurance that the expectations will prove to be correct. With that, I'll now turn the call over to David.
Thank you, Adam, and good morning, everyone. I'll touch briefly on Aecon's consolidated results, review results by segment, and then address Aecon's financial position before turning the call over to Jean-Louis. Turning to slide three. Revenue for the year of CAD 4 billion was CAD 334 million or 9% higher compared to 2020. Adjusted EBITDA of CAD 239 million, a margin of 6% compared to CAD 265 million, a margin of 7.3% last year. An operating profit of CAD 119 million compared to operating profit of CAD 150 million in 2020.
After adjusting for the impact of amounts related to the Canada Emergency Wage Subsidy, or CEWS, reported in both years, adjusted EBITDA of CAD 207 million and operating profit of CAD 87 million for 2021 increased by CAD 22 million and CAD 17 million, respectively, compared to last year. Diluted earnings per share for the year was CAD 0.78 compared to diluted earnings per share of CAD 1.29 in 2020, both amounts before adjusting for the impact of CEWS. Reported backlog is CAD 6.2 billion at the end of 2021 compared to backlog of CAD 6.5 billion a year ago and CAD 6 billion at the end of the prior quarter. As announced yesterday, Aecon's board of directors approved an increase to the quarterly dividend with this being the 10th increase in the last 11 years.
The quarterly dividend will increase to CAD 0.185 per share from CAD 0.175 per share previously, with the first increased quarterly payment to occur on April fourth, 2022. Now looking at results by segment. Turning to slide four. Construction revenue of CAD 3.9 billion in 2021, with CAD 301 million or 8% higher than last year. Revenue was higher in nuclear, driven primarily by an increased volume of refurbishment work in Ontario and in utilities driven by gas distribution and telecommunications work. Partially offsetting these increases was lower revenue in industrial operations driven by decreased activity on mainline pipeline work in Western Canada and in civil operations driven by lower road building, construction, and foundations work.
Adjusted EBITDA in the Construction segment of CAD 212 million, a margin of 5.4%, compared to CAD 262 million, a margin of 7.2% in 2020. After adjusting for CEWS in both periods, adjusted EBITDA of CAD 180 million decreased by CAD 2 million compared to 2020, primarily driven by lower volume and gross profit margin in Civil, Urban Transportation Solutions, and Industrial. These decreases were largely offset by higher volume and gross profit margin in Nuclear and Utilities Operations. New contract awards in 2021 totaled CAD 3.6 billion compared to CAD 3.3 billion in the prior year. Construction backlog at the end of 2021 was CAD 6.1 billion compared to CAD 6.4 billion at the end of 2020. Turning to slide five.
Concessions revenue for the year was CAD 69 million compared to CAD 98 million in 2020. This lower year-over-year revenue was primarily due to decreased construction activity related to the Bermuda International Airport Redevelopment Project, which was completed in the fourth quarter of 2020. This decrease was partially offset by an increase in airport operations as commercial flight numbers continued to recover from the more severe impacts of COVID-19 on passenger volume experienced in 2020. Adjusted EBITDA in the Concessions segment was CAD 64 million, increased by CAD 22 million versus 2020, primarily due to results from Bermuda Airport. Turning to slide six.
As of the year-end, Aecon had a committed revolving credit facility of CAD 600 million, of which CAD 23 million was drawn and CAD 3 million utilized for letters of credit, as well as a CAD 900 million facility provided by EDC to support letters of credit. Aecon's committed facilities support working capital and letter of credit requirements total CAD 1.5 billion. Aecon has no debt or credit facility maturities until the second half of 2023, except equipment and property loans and leases in the normal course. As at December 31, Aecon was in compliance with all debt covenants related to its credit facility. Capital expenditures in 2022 are expected to be similar to 2021. At this point, I'll turn the call over to Jean-Louis.
Thank you, Dave. Turning now to slide seven. Despite the ongoing impacts of COVID-19 on Aecon's operations, we continue to deliver solid results in 2021. Aecon's balanced and diversified portfolio and agile culture continue to be significant strengths and are well-suited to the market opportunities across Canada today. The Construction segment is aligned to the significant infrastructure investment commitments by all levels of government across Canada and on a select basis internationally, as well as by the private sector across the market sectors in which we participate. The concession segment is purpose-built for the large key infrastructure projects being developed and brought to market by governments with a P3 and alliance model, and is also targeting innovative development and private finance opportunities in power, clean tech, and other related markets, as well as participating as a concessionaire on the five P3 projects identified on this slide.
Turning to slide eight. Backlog, recurring revenue program, and the pipeline of bidding opportunities for new work remain at strong levels across Canada. New awards of CAD 3.7 billion in 2021 exceeded 2020 by CAD 413 million. Early 2022 has already seen a number of new projects awarded, but not included in the year-end backlog, including the Interstate 90 State Road 18 Interchange Improvement Project in Washington State and the Annacis Water Supply Tunnel Project in British Columbia. An Aecon partnership was also selected as a preferred proponent of the Montréal Trudeau Airport REM station in Québec. Most recently, an Aecon consortium was named first negotiation proponent for the transformative GO Rail Expansion On-Corridor Works project in Ontario under a collaborative model with Infrastructure Ontario and Metrolinx.
This potential award would be the largest project undertaken by Aecon in its history. These awards clearly demonstrate the strong demand for Aecon services for projects of all sizes and across our operating sectors and geographic areas of focus. Aecon is also pre-qualified on a number of large project bids due to be awarded over the next two years, including several procurements for the Ontario Line and most recently, the Scarborough Subway Extension stations, rail, and systems. We expect demand for our services to remain healthy for the foreseeable future as the federal government and provincial governments across Canada have identified investment in infrastructure as a key source of stimulus as part of economic recovery plan and an essential part of the transition to a net zero carbon economy through more sustainable infrastructure.
Recurring revenue was up 28% in 2021 versus last year, primarily from growth in utility operations. Recurring revenue is expected to continue to grow, driven by demand in the utility sector, and the concession segment is expected to see airport traffic in Bermuda continue its recovery during 2022 from the impact of the COVID-19 pandemic. I would also like to formally welcome our new employees from Pacific Electrical Installations or PEI, which we acquired in November 2021. PEI is the largest independent full service power line contractor in British Columbia, providing maintenance, construction, and emergency restoration services for critical electrical infrastructure, the majority under master service agreements and recurring revenue arrangements. PEI is the designated power line service provider for BC Hydro for the Lower Mainland, South, and Okanagan regions, and also works with a variety of private sector customers.
Turning now to slide nine. We are continuing in our drive to be an industry leader in sustainability. Last year, we announced our GHG reduction target of 30% by 2030 and net zero by 2050. In 2021, we focused on operationalizing these targets by integrating new technologies to reduce emissions across our portfolio, and we are the first construction company in Canada to trial an electric mini excavator. We also trialed technologies such as battery-powered tools, solar powered equipment, and battery packs to replace diesel use on our projects. We mentioned our ESG commitment by becoming the first Canadian construction company to incorporate a sustainability-linked credit facility tied to ESG objectives.
We plan to release our next sustainability report in April 2022, and look forward to highlighting our achievements and opportunities as we continue to focus on building what matters to enable future generations to thrive. Turning to slide 10. The trends that I've spoken to already in terms of the strength of the construction market in Canada, both in the public and private sector, continue to be positive and well-aligned to Aecon's diversified construction segment. In the concession segment, in addition to expecting continued recovery in travel through the Bermuda Airport during 2022, there are a number of opportunities to add to the existing portfolio of Canadian and international concessions in the next 12-24 months, including in the U.S., an innovative project with private sector clients that support a collective focus on sustainability and the transition to a net zero economy.
The overall outlook for 2022 is positive as construction continues on a number of projects that ramped up in 2020 and 2021, the strong level of backlog and new awards during 2021, and the strong demand environment for Aecon services, including recurring revenue programs. Thank you. We now turn the call over to analysts for questions.
Thank you. If you'd like to ask a question, please press star followed by one on your telephone keypad. If for any reason you'd like to remove that question, please press star followed by two. Again, to ask a question, press star one. As a reminder, if you're using a speakerphone, please remember to pick up your handset before asking your question. We will now pause here briefly as questions are registered. Our first question is with Yuri Lynk from Canaccord Genuity. Yuri, please proceed.
Thank you, and good morning, everyone.
Good morning, Yuri.
Good morning, guys. I don't know who wants to take this one, but you mentioned the outlook for 2022 is positive, but I struggle to see how the Construction segment EBITDA grows this year. You know, your 12-month backlog's down about 5%, and the margin comps are really tough, at least through Q3, especially in light of the weaknesses in the fourth quarter. How do we get to growth in the Construction segment in 2022?
Yeah. Yuri, I will take this one. I would have two vectors to answer your question. The first one is about the quality of our backlog. As you know, and as I've been repeating it, the quality of backlog is not an issue. The issue is about selectivity of projects, and it's about going on de-risking our portfolio, our backlog. As you have seen, all the indicators of what we decided to do go in the right direction. In indicators, about the kind of projects, it's really the part of lump sum and fixed price to unit price. About the size of project, we have not seen that from September 2018. I mean, we have not taken a project superior to CAD 1 billion because we just want to go on with the one that are at the moment.
We are more and more diversified geographically. Our sectors, I mean, are quite stable and equally weighted. Our backlog is staying between CAD 6 billion-CAD 7 billion. Agree. No real issue with the quality. It's a problem of selectivity and quality of backlog and contracting mode. We're not doing extreme swing to the left or to the right. I mean, we are decided and quietly but firmly, and we are shaping the activity of tomorrow, knowing and convinced that this will drive better profitability. If I take, for example, the On-Corridor P roject, I mean, it's transformational for Ontario, but also for Metrolinx, Infrastructure Ontario, and of course for Aecon. I mean, when you calculate about what share Aecon can have, I mean, it's worth around CAD 3 billion.
Operation, you know, we have 28% of operation for 25 years between 2024 up to 2050. I mean, the cumulative value is around CAD 6 billion. It's all collaborative. It will begin with the development phase of two years, where we will, with the client, fix together what will be the service level for the train, what strategy are we going to use in line with our offer. From this we look at what kind of works, how are we going to do this. What will be the price? I mean, it's a totally transformative way for Aecon to work. This is a way to drive profit. My second answer, my second vector will be about execution. Execution is key. We are extremely happy with our continuous improvement program.
A lot of enthusiasm within the company on most of our job sites. I'll just give you an example. You can see it on the investor presentation. The picture is about Gormley Outreach, and you can see the two pin elements that remain inside. Those pin elements, you just cast segment per segment. We have something like 35 segments to do. We were stuck at around 40 days per segment. We implemented our continuous improvement. We went rather quickly to 10, then seven, and a few days ago, we reached five days per segment. This is money. This is profitability. It goes directly to the bottom line. We are investing a lot in our Aecon University Project Management Group. I mean, all this is important because this is money at the end of the day.
last but not least, actually, we have totally reorganized our procurement, and we are much, much more efficient. This is why we say that construction, I mean, we have a good trend.
Yuri, if I can add to that.
Mm-hmm.
If you take from Jean-Louis down to the strong focus on profit growth. In terms of revenue, I think if you look at the comparison of 2020 to 2019, where we came into 2020 with exactly the same amount of backlogs to be worked off over the next 12 months as we had in 2019, and yet we still grew by 9% top line, coming into this year. It's really driven by recurring revenue. It's driven by the level of new awards within the year, and we've already had a significant number of wins early this year. If they'd have happened a month earlier, that year-end position of backlogs that you're looking at, which is very similar to the position at the end of last year, it would look very different.
We're not too worried about the revenue side. As Jean-Louis spoke about, the big focus is on ensuring that revenue growth is possible.
Sorry. The margin weakness that we saw in the fourth quarter, you don't see that spilling into 2022? That's my last question, and I'll hop off.
Yeah, no, I mean, if you look at the fourth quarter, we're really talking about impacts confined to Civil and Urban Transportation space. A small handful of projects where, you know, we've come through, you know, a pretty tough operating environment during the resurgence of Omicron late in 2021. Obviously supply chain disruptions, and we made a lot of progress in settling some significant claims in the quarter. And, you know, the impact of all of that kind of coming together. There's no one particular issue that is always significant out of those factors. Combined, they caused the numbers to be a little lower in Q4. We don't see that moving over.
Obviously, there was some Omicron impact early in January, but we're through that now, very much back to normal from a COVID perspective. It's something we've been living with for two years, but that Omicron additional wave did have some impacts for the space of about a month or so. Now in terms of supply chain, the issue is always when you get some shift and a certain disruption. We've been living with the, you know, the impacts on supply chain now for so long enough that in all our new work and our new bids and contractual arrangements, we're able to factor that in. We don't expect that to be something that impacts our earnings going forward.
Thank you.
As we count with all of the
Thank you for your question. Our next question is with Jacob Bout with CIBC. Jacob, please proceed.
Good morning. I want to continue on with the construction margin question. Maybe just help us out understand, you know, what the biggest drivers were. You know, how much was Omicron impact. And then as far as the civil urban transportation projects, you talked about claims adjustments. Could there be any positive adjustments to offset this in later quarters?
Yeah. Taking those together, I mean, if you look overall, I mean, put this into context of the full year, our Construction segment over the full year saw progression from 2020, which in an environment again which was subject to a lot of disruption. We think the Construction segment across the year actually performed well. You know, we've overcome, as I said earlier, you know, if you look at, you know, where people are looking at EBITDA reported in quarters of just over CAD 60 million versus a consensus of just over CAD 80 million.
You know, I would say the fact that I talked about in terms of overall supply chain and projects, hopefully, you know, very similar kind of impacts in terms of that difference.
Maybe I can add some words on Omicron. Omicron has hit the economy from December up to the end of January. As we all know, it was not as strong as the Delta variant, but it was spread over, I mean, much quicker. We had, I mean, from December, in some occasions more than 50% of our people isolating. I mean, at all levels of the company. I got Omicron with very mild symptoms, but I had to isolate myself for seven days. On all our jobs, I mean, it was like this. Yes, it has affected us.
On the good side of it, I mean, we are closing little by little all our emergency centers for COVID because the situation is just getting better and better extremely quickly.
Do you get back to pre-pandemic levels as far as margins in 2022?
Yeah, we're actually and again, you know, going back to kind of pre-COVID days, as you say, looking at 2019, and this is my comment about the Construction segment, because as you know, the Concession segment will continue to be a ramp up as traffic recovers. Looking at the Construction segment alone, yeah, we do expect to get back to its pre-pandemic levels for sure.
Okay. We'll leave it there. Thank you.
Thank you, Mr. Bout, for your question. Our next question is with Jean-François Lavoie with Desjardins Capital Markets, sorry. Jean-Francois.
Yes, thank you very much. Good morning. So David, just wanted to come back on the question for margin on the Construction segment in 2022. You mentioned for sure would go back to pre-pandemic level, but would it be achievable to go beyond the 6% level? I know you don't like to provide—you don't provide specific guidance, but looking at consensus with the actual revenue target and the visibility that you have in the backlog, I was just wondering if you could provide a bit more color on the potential for margin in Construction, please.
Yeah, no problem. Yeah, I mean, you partly answered your own question by saying we don't give specific margin guidance. You know, I think if you go back to Jean-Louis' comments at the beginning, in answer to the first question, the focus is very much on the margin profile of the work we bid in, the execution of that work. You know, we feel pretty confident about the mix of work we have for 2022. We feel very confident about the progress we're making on productivity and execution. You know, all subject to you know, any other surprises. You know, we think we've dealt with everything we know about right now, but we're in an environment where things change quickly.
Barring absolutely any surprises, then yes.
Okay. That's great color. Then moving from a free cash flow standpoint, should we expect a positive reversal of working capital in 2022 given the significant consumption we saw in 2021, or the ramp-up of key projects will continue to consume some working capital?
Yeah. We do expect, I mean, there's always some seasonality in our cash flow where, you know, we normally see an unwinding of working capital and generation of cash flow in Q4 and Q1. Sometimes it's more Q4 and less Q1, and sometimes it's the reverse. We expect the reverse this time around. The biggest impact in Q4 with the issue we disclosed at the end of Q3 around the Coastal GasLink Pipeline and the impact that had on our cash flow. As we've noted, we've made a lot of progress on that front, so that will help in Q1 2022 as we formalize those agreements. You know, that will benefit the first quarter as well, the normal seasonal unwinding.
We should start to see that position improve in 2022 and we get back to a more normal cash flow profile that we've seen historically.
Okay, very helpful. Maybe one last for me. Considering that the outlook for 2022 looks quite positive, you increased your dividend once again. I just wanted to pick your brain on your preference for M&A versus share buyback in the current context with the share price that is unjustifiably being punished this morning.
Yeah, I mean, obviously the dividend has been focused for a long period of time now, over a decade. You know, we continue to see that as a predictable and consistent approach. That's our focus on that side of things. We do see opportunities on the M&A side. We are focused on looking at where we can continue to grow the business. You know, Jean-Louis talked about a focus on recurring revenue and continuing to look at the profile of the type of work we do. We're looking for M&A opportunities that help us achieve that.
Thank you very much. Thank you.
Thank you for your question. Our next question is with Frederic Bastien with Raymond James. Please proceed.
Thanks, and good morning, everybody. Would you mind discussing more the collaborative nature of the GO Rail Extension project that you recently secured and how we should think about how the you know the development phase will transpire over the next few years?
Yes, I will do it, Frederic. We have been advocating and working with all our clients about changing the contracting mode of the big and complex projects. I mean, basically speaking, estimating those major complex projects, especially the one where there is system integration, on a lump sum price is extremely difficult. We have been exploring all these ways with our client to say, we need to define much more together what we wanna do and what is going to be the cost of it. This is what we call the development phase. We have been chosen on the On-Corridor Extension program. I would say we have been chosen on the capacity of our team.
I would say the way we have explained and put on the table the various strategy for service operation during the 25 years and how the service operation, I mean, could drive the CapEx for Metrolinx and infrastructure on time. Now that we have been chosen, I mean, during two years, in addition to do some early work, I mean, that we have done and that are important to enable when we begin after the two years of the main works, I mean, to go quicker and to go better. I mean, during these two years, we are going to finalize the operation strategy with Metrolinx, and from this finalize what are the infrastructure that are necessary and the equipment that are necessary to this.
Together we will define what can be the budget for this, and we will work with our client on a cost-plus basis during execution with a target price. At this stage, we are negotiating with our client. I would say the detailed rule of the project, and then we will begin with the development phase. It's what we call progressive design-build. It's what we call collaboration. We are extremely happy. I think that it has been a three years long first bid. To have won this first bid, I mean, we are extremely happy because these are the projects, those are the projects of the future. The risk profile is totally different than the technology.
Okay, thanks for that additional color, Jean-Louis. Second question relates to sort of the progress you are making entering the U.S. market. I know it's been a, you know, been earmarked or identified as an opportunity a few years back, but you won a recent contract in Washington State and then you're shortlisted for another one in Michigan. I don't think it's a coincidence that these states are bordering Canada, but just wanted to know, you know, maybe is this the combination of many years of business development, or have these opportunities kind of presented themselves more recently?
Yeah. You probably remember what I told you, I mean, a few months ago. We cannot ignore United States, although we know there's a huge pipeline for infrastructure in Canada. I mean, when we have a neighbor of this size, plus the new infrastructure bill. We have been working a lot during the last four months. What we have discovered is that it's not only about roads and bridges, it's also a lot about activities, about network, about telecommunication, about increased capacity. With those two vectors, we will go, I would say prudently, but steadily, we are going to enter the U.S. market. In terms of civil, we have decided that we will enter this market from our bases in Vancouver and go down the West Coast progressively.
This is why the first job we took it in Washington State. It's a relatively small job. It's a CAD 125 million job. It's a job, I mean, extremely classic for Aecon. This is a project that we do, I mean, on all our divisions. We have studied extremely carefully. We think we have with us a very good team of local companies and partners. Then we will expand on job maybe a little bigger, maybe different kind of association with bigger companies, and go down the West Coast to go at least up to California, where there is probably one of the biggest parts of this infrastructure deal. There's a lot to do. This is a plan in-
In utilities, we are looking at the market, looking at the alliances we can do. As always, I mean, for these two examples, it's what I have always told, we're not gonna add a new country and add it to a new activity. I mean, we have a new country, okay, but we do it on, I would say, our core businesses so that we don't have any surprise.
Great. Thanks a lot. Appreciate it.
Thanks a lot.
Thank you for your question. Our next question is with Chris Murray from ATB Capital Markets. Please proceed.
Yeah, thanks, folks. Good morning. Maybe turning back to the margin question just a little bit, just trying to understand a little bit of the disclosure around Q4. Dave, just what was the Qs contribution in Q4? And you didn't call it out, but you know, I get to expect that there's gotta be some revenue that you've probably lost in the quarter just due to Omicron. Just trying to get a sense of what the normalized margin would've been for the quarter.
Yeah. The Omicron impact was around CAD 4 million in Q4. That's that piece. I mean, in terms of revenue, as Jean-Louis said, we had some impacts through December. I wouldn't say the revenue impact was hugely significant. It was more of a productivity impact that impacted us through December. You know, revenue may be kind of in the CAD 20 million range, but it's not that significant in terms of overall revenue. It's just tougher to schedule work and get the right crews with the right number of people. It was a bit more of a scramble in December in terms of availability of workforce.
Okay. Just I guess what I'm also trying to understand is as we go into 2022, I mean, I think the first thing I'm assuming is that there'll be no more CEWS payments next year. If we think about the call it the CAD 32 million of CEWS that were in earnings this year, you know, should we be thinking about, you know, that, you know, backing out that CAD 32 million as a contribution and kind of. I think you also mentioned thinking about, you know, 2022 maybe kind of more like a pre-COVID year. I'm just trying to, you know. Is the assumption that, you know, you'll overcome the loss of the CAD 32 million in margin type of thing. Is that the right way to be thinking about this directionally?
Yeah. You're right. The CEWS program has ended now, so there won't be any contribution from that in 2022. We, you know, we've obviously been impacted by COVID throughout the year, including early in the year, including impacts on Bermuda as well, obviously, that we expect to see recovering through 2022. When we look at CEWS and COVID impacts together, assuming we continue in the operating environment we're in right now, which is really having no impact on the business in terms of the current COVID situation, yeah, we think those two kind of offset and allow us to get back to kind of a pre-COVID type of margin performance.
Okay, great. Just to make sure too, I know in previous years you sort of talked about the fact that just the first half of the year might not be as substantially down as the second half just 'cause of the nature of some of the work. We should still be thinking that seasonality impacts in Q1 and Q2 again in 2020. Is that also fair to think?
That's right. You know, Q3, Q4 typically the highest revenue quarters. You know, that has moderated to some extent over time, but it's still definitely the case. I would expect that seasonality to be any different this year, really.
All right. That's helpful. Thanks, guys.
Thank you for your question. Our next question is with Troy Sun from Laurentian Bank Securities. Please proceed.
Great. Thank you. Good morning. Maybe just quickly on the Coastal GasLink Project here. Obviously noticed the change in language in the disclosure. Sounds pretty positive here. I'm just trying to get a sense from you in terms of how, I guess, comfortable that you're feeling in terms of derisking the free cash flow exposure there on that project, if possible, please. Thank you.
Maybe I begin about CGL. CGL is a very complex nature, but also by the massive change in all the regulation about erosion and sedimentation control. It's not only a problem at CGL.
I think everybody is aware, I mean, of the same kind of issues that have been encountered in Trans Mountain in terms of cost overrun, in terms of schedule being pushed on to the right. Those are complex projects. We have developed at the highest level with our clients very good relation based on trust and transparency to make the best out of this difficult situation. We have, during the last quarter, reached some agreements with our clients. All these agreements have been formalized during Q1, so they have just fixed the cash position for Aecon.
You know that in addition, we have begun an arbitration to decide later on what is going to be the final value for this project. In between, we are also working with our client to try to settle some a little discrete issues because arbitration is time and money consuming, so we are also advancing well on those issues. This is at the moment where we are on an operational way at CGL. Maybe, David, you can take more financial part of it.
Yeah. I mean, I think just building on what Jean-Louis said, obviously, the disclosure in Q3 was focused on cash flow and we've obviously made a disclosure now. Jean-Louis kind of saw progress on that front. You know, I think we've obviously been working on this project for quite a period of time now and you know, we've reflected the challenges we've had in other projects and you know, obviously other contractors facing similar challenges. We've reflected that in how we've positioned the projects. So from that perspective, that was kind of the number one concern is really around cash flow and we've made good progress on that front.
Okay, great. That's helpful. Maybe just also, I guess a big picture question for Jean-Louis here. Just in terms of the infrastructure spending potential, let's call it in Canada, I think people largely were expecting a meaningful pickup post-COVID. I guess just based on what you're seeing now, like, where are we in terms of that progress from a spending perspective for 2022? Are we still in the early days of, you know, seeing the full potential of government funding or like it's quite mature at this point?
You probably remember, I mean, I told you more than one year ago, I don't believe in solar or any projects in infrastructure. The fact is that on Friday, we're gonna invest a lot on infrastructure. It's gonna happen on Monday mornings. I'll just give an example. For example, in Toronto, there have been a lot of works done in the streets, rehabilitation of bridges during the COVID because there was no more trucks and no more cars because everybody was at home, so it has allowed us to work there. Mainly, the program on which our teams at the moment are preparing themselves are perfect. Our first week that we have been knowing and we knew they were on our radar for the last two years. We were ready for this.
I would say it's steady. The pipeline infrastructure is strong. Is there a strong correlation with COVID and with recovery plan? Maybe not that much. It is not the main driver. The main driver is that we have something like 500,000 newcomers in Canada and those people are, I mean, are smart immigrants. They need better highways, they need better telecommunication, they need better source of power, better source of communication. All this drive what we are seeing at the moment, the backlog. To come back to something extremely positive for us, I mean, you have noticed this CAD 680 million in recurring revenue. I mean, telecommunication is booming.
I mean, fiber to the home, to rural places, alternative energy also. We are extremely happy to be well-positioned. I was this morning reviewing with one of my operational leader about Voltage. You probably remember this company that we acquired a few months ago. Now that it is well integrated, you cannot imagine the prospect, the perfect synergy wall. I mean, we are now working extremely strongly with Hydro One on the GTA. We're working with BC Hydro. We're working with Fort McMurray, with some private clients. We're working with Manitoba Hydro. I mean, there's a boom which of course, I mean, may be partly a consequence of COVID, but it's not the main driver. The main driver is that Canada is growing, and there's a need, and that we are present.
Okay, great. Awesome. That's super helpful color. That's it for me. Thank you.
Thank you for your question. Our next question is with Naji Baydoun with iA Capital Markets. Please proceed.
Hi, good morning. I just wanted to start off on the nuclear side. A competitor of yours recently ended a joint venture partnership that was focused on nuclear decommissioning work in the U.S. I know you can't comment on that partnership specifically, but how does this event impact or inform your view of the U.S. nuclear market?
Maybe I will begin with what we are doing on the nuclear, I mean, at the moment in Canada. We are full speed ahead with the refurbishment of the two power plants. I mean, OPG, we are now working with the second reactor. We are extremely happy with the ramping up, with the lessons learned from the first one to the second one. We are a few dozen days on the schedule. Our client is delighted with our work. On Bruce Power, you see that we are working on the first reactor. We have added to our backlog the second reactor. There are still four to come. There are still three steam generators. This is good. Our team are getting better and better.
Second point of importance, small modular reactor. You have noticed that OPG has decided on this technology partner with GE Hitachi. We are part of the team with OPG and GE as a constructor and an installer. We are extremely happy with this. I mean, SMR is 300 MW. It is the right size. I mean, it's of course carbon-free energy. I mean, the debate is closed on this. In terms of safety, with new reactors following Fukushima are getting much better. I just remind you that they are passively cooled for a minimum of seven days with a power shortage and without operator action. I mean, it's totally innovative. We are extremely happy to work on this.
United States, we have acquired three years ago a small company specialized in welding that we are using in Canada and United States. I have to say that during the last two years, because of COVID and because the nuclear power plants were rather reluctant to let enter within the plants people working on CapEx and mixing with people working on operation, we have not seen a lot of activity during the last two years, but it's coming back, and it's coming back rather quickly. I cannot comment, I mean, on the disbanding of the JV, but it was all about dismantling existing plants. So far, we are not in this business in the United States.
I guess you're also saying that maybe that's not a business you wanna be in, or that's not a market that you're going after at the moment?
In the United States, we're not pursuing this. I mean, evidently when the time for Pickering will come, I mean, Pickering is Toronto, it's our city. It's a client that we know perfectly, and we are working in collaboration with them about future packages. Entering into mega dismantling projects in the United States is not part of our strategy.
Okay. Understood. That's clear. Just one last quick question. Obviously, you mentioned this in your opening remarks, and in the M&A, pursuing more transition or sustainability related projects and opportunities. Can you just provide a bit more detail on that and perhaps quantify what the market opportunity is for you in Canada?
It's not easy to quantify, but the wave is coming definitely. How do we look at ESG? I mean, first of all, as a company, we are a citizen and we have to take care of our planet. This is why we are the first construction company to have set up targets on greenhouse gas emission reduction for 2030 and 2050. I have to admit, I mean, we have a plan, and we know perfectly how we are going to reduce by 30% for 2030. We don't have really a clue about net zero in 2050. This will come. We are working on it.
The second part, I mean, how to look at ESG, it's as a business. I mean, definitely, you have here new avenues of growth coming from everywhere, mainly the energy sector, I mean the electrical sector, alternative energy. You have probably noticed that most of our recent acquisitions during the last year were around this. We are extremely focused on this new stream of businesses. So much that we have decided to create a single point of entry at Aecon in order to help our clients with their ambitious program regarding sustainability.
The single point of entry will allow us to be more agile in our pursuits, more agile in our solution, and being able to share the work between all the sectors at Aecon from a centralized point of view.
The perfect example would be the corridor project, the On-Corridor Project that Jean-Louis talked to. I mean, clearly electrification of the rail system in the GTA through replacing diesel.
These are the types of capital allocation decisions that have been made across all levels of government with private clients. We're right in the middle of all our activities. You know, it will drive our growth and our opportunity here for the foreseeable future. We don't see that trend going anywhere other than continuing over the long period of time.
Okay. Thank you for those details.
Thank you for your question. Our next question is with Michael Tupholme with TD Securities. Please proceed.
Thank you. Good morning. I was wondering if you can provide an update on traffic levels at the Bermuda Airport, through the first part of the year here in 2022, and maybe to put that into some context, just give us a sense for how that's evolved from what you would have seen in the fourth quarter.
Overall for 2021, traffic was up compared to the previous year by about 50%. It was still only around 30% of 2019 levels. We do see that, you know, this is based on tracking all the forecasts that are out there in the market, plus our own knowledge of the plans of the airlines and what's going on in terms of on the ground in Bermuda. We do see that growing to about 60% of 2019 levels on average over 2022. There's a seasonality to that. Q1 is always the slowest quarter for traffic in and out of Bermuda. Clearly, you know, Q4 was kind of impacted in the last month of December because of Omicron.
January 2022, the same kind of impact. Things are now picking up again. I think, you know, Q1 will be too dissimilar to Q4. Then, you know, we think through the course of the year, it starts to ramp up quite nicely.
Okay. Thanks, Dave. Then one follow-up. You were asked earlier about changes in non-cash working capital, and I think most of the comments you made were around sort of the possible difference in seasonality, Q4 versus Q1, reversal. It sounds like you expect more of a reversal in Q1 in 2022 as opposed to what you would have historically seen in Q4. I'm just wondering for the full year of 2022, with it sounds like an expectation of some revenue growth in 2022, how do we think about the full year for changes in non-cash working capital?
Yeah. I think overall for the year, we expect working capital to be fairly neutral across the year. You know, as you said, some of that is due to growth, and the profile of the projects. Overall, you know, all of this can be thrown off by timing close to the end of the year, you know, in terms of where you're at in terms of ramping up other projects and things like that. All things being equal, based on what we see today, we expect it to be fairly neutral in 2022.
Okay. Thanks for that.
Thank you for your question. Our next question is with Sabahat Khan from RBC. Please proceed.
Hey, David. Thanks, and good morning. Just I guess looking forward, I think there was a bit of commentary you shared earlier on your outlook for 2022 and some of the impacts that COVID had through late last year. Then I guess as we think about the outlook, do you think you've kind of in the you know the provisioning that you did going through Q4, taking into account some of the COVID risks earlier in the year and maybe some of the disruptions. Like, I'm trying to figure out if there's still you know larger negotiations with a lot of your projects where you know there's still discussions around recovery and how you're sort of risk managing that for kind of full year looking forward.
Yeah, no. You know, I think in terms of those Q4 impacts, we felt that we dealt with those in Q4, so we don't expect those to carry forward into 2022.
Okay. I guess in terms of like
Sorry, Sabahat, sorry. Other than the comment we made earlier, which is the Omicron impact continued through January. January obviously is a pretty slow month for us anyway from a construction perspective, in calendar. That would be the only thing that kind of carries into the first month of this year. Everything else we feel we dealt with in Q4.
Okay, great. You know, I think you noted in the press release in the call around just opportunities for concessions, like, you know, outside of Bermuda. I guess, is that something that's sort of opportunistic or are you know, actively looking to build out that concession segment and add more assets? Just trying to get an understanding of, you know, where that is on the priority list and, you know, if that's something you know, you compare it to the opportunities maybe on M&A or buyback. Is it that big of a kind of focus for you guys?
Generally speaking, I will begin on my side. I mean, our strategy is to work in the concession and construction segment. We're not going to invest in greenfield assets only to operate it. We just think that our job is to develop a project, is to engineer a project, is to finance it, is to build it and to operate. We are extremely interested in following this model. I have to say that all this sustainability wave that I was talking about is giving us new opportunities with the private sector, with private companies about all those alternative energy issues. This is generally speaking, yes, we want to pursue and we are ready for this. Maybe, David, you can add it on.
Yeah. I think very much we're focusing on those opportunities. I mean, you know, some of these things that we're working on through government procurement. Ontario Line Subway is a P3 opportunity. The Deerfoot Trail improvements in Calgary is a P3 opportunity. Our concessions group, you know, sometimes it's investing equity, but it's always around that long-term revenue stream. Again, On-Corridor would be a perfect example of where the 25-year operations and maintenance piece attached to that opportunity that our concessions group is heavily involved in and will be participating in throughout the On-Corridor lifespan. That's a big focus for us. We're also looking at opportunities to replicate what we've done in Bermuda.
There are some very interesting discussions going on around that space that we take time to come to fruition. Obviously, with all the impacts on air travel over the last little while, there's been kind of a pullback. Those discussions are back up and running again. You know, we're looking across the board for how we can continue to evolve that concessions group. There's quite a number of very interesting opportunities for us to do that.
Okay, great. Thanks very much for the color.
Thank you for your question. There are no further questions waiting at this time, so I'd like to pass the conference over to the management team for closing remarks.
Super. Thanks very much, everybody, for attending today, and as always, feel free to reach out with any further questions. We look forward to connecting again next quarter. Have a great day.
That concludes the 2021 year-end results for Aecon Group conference call. Thank you for your participation. You may now disconnect your lines.