Ladies and gentlemen, thank you for standing by, and welcome to the Aecon Q1 2020 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this time, you will need to press star then one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Mr. Adam Borgatti, SVP of Corporate Development and Investor Relations. You may begin.
Thank you, Amy. Good morning, everyone, and thanks for participating in our first quarter 2020 results conference call. We hope that you are all keeping safe and well in this extraordinary time. This is Adam Borgatti, Senior Vice President, Corporate Development, and Investor Relations speaking. Presenting to you this morning are Jean-Louis Servranckx, President and CEO, and David Smales, Executive Vice President and CFO. Respecting current best practices, we are presenting to you from separate locations, so please bear with us if there are any technical issues along the way. Our earnings announcement was released yesterday evening, and we have posted a slide presentation on the investing section of our website, which we will refer to during this call. Following our comments, we will be glad to take questions from analysts.
As noted on slide two of the presentation, listeners are reminded that the information we are sharing with you today includes forward-looking statements. These statements are based on assumptions that are subject to significant risks and uncertainties. Although Aecon believes that the expectations reflected in these statements are reasonable, we can give no assurance that these expectations will prove to be correct. With that, I'll now turn the call over to Dave.
Thanks, 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 three months ending March 31st is CAD 748 million, CAD 97 million or 15% higher compared to 2019. Adjusted EBITDA for the first quarter, CAD 19.2 million, a margin of 2.6%, improved by CAD 7.3 million or 61% compared to adjusted EBITDA of CAD 11.9 million, a margin of 1.8% in Q1 last year. First quarter operating loss of CAD 9.7 million improved by CAD 1.1 million compared to an operating loss of CAD 10.8 million in the same period in 2019. Diluted loss per share of CAD 0.19 in the quarter compared to a diluted loss per share of CAD 0.16 in the same period last year.
Reported backlog of CAD 7 billion compared to backlog of CAD 6.7 billion a year earlier, representing an increase of 3%. Turning to results by segment. As noted on slide four, construction revenue of CAD 735 million in the first quarter was CAD 97 million or 15% higher than the same period last year. This increase was driven by higher revenue in civil operations and urban transportation systems in both Eastern and Western Canada. Revenue was also higher in utilities operations due in large part to the acquisition of Voltage Power in February and in industrial operations, primarily due to increased activity on mainline pipeline projects in Western Canada.
Partially offsetting these increases was lower revenue from nuclear operations driven by a reduction at the Darlington nuclear facility in Ontario, where work was winding down on the first unit of the main reactor refurbishment project ahead of ramping up in future quarters on the next units. Adjusted EBITDA in the construction segment of CAD 16.5 million, a margin of 2.2%, increased by CAD 9.2 million compared to CAD 7.3 million, a margin of 1.1% in Q1 2019. This was primarily due to increased revenue in industrial and civil operations and urban transportation systems and higher gross profit margin from nuclear operations. These increases were partially offset by lower gross profit margin in utilities. New contract awards of CAD 896 million in the first quarter of 2020 were CAD 334 million higher than the same period last year, driven primarily by the award for the Pattullo Bridge replacement project in BC.
Construction backlog at the end of the quarter was CAD 6.9 billion, which is CAD 187 million higher than at the same time in 2019. Turning to slide five. Concessions revenue for the first quarter was CAD 27 million, a decrease of CAD 31 million or 53% compared to the same period last year, primarily as a result of lower construction activity as the new airport terminal in Bermuda gets closer to completion. Adjusted EBITDA in the concessions segment of CAD 14.3 million was CAD 0.5 million lower compared to CAD 14.8 million in the same period last year. This was primarily related to operations in Bermuda, resulting from the slowdown and then temporary suspension on March 20th of all commercial flights in and out of Bermuda due to COVID-19.
Turning to slide six, Aecon's financial position, liquidity, and capital resources remain strong and are expected to be sufficient to finance operations and working capital requirements for the foreseeable future. At March 31st, Aecon had CAD 105 million of cash on hand, excluding cash in joint ventures and restricted cash, and a committed revolving credit facility of CAD 600 million, of which CAD 30 million was drawn and CAD 75 million utilized for letters of credit. When combined with an additional CAD 700 million performance security guarantee facility to support letters of credit provided by EDC, Aecon's committed credit facilities for working capital and letter of credit requirements total CAD 1.3 billion. Aecon has no debt or working capital credit facility maturities until the second half of 2023. In the current environment, however, Aecon believes it is prudent to conserve cash and has eliminated non-essential spend and reduced discretionary capital investments as previously disclosed.
At this point, I'll turn the call over to Jean-Louis.
Thank you, Dave. Turning to slide seven. We are confident that Aecon's diversified portfolio, strong financial position, and safety-first culture will be of great benefit as we navigate evolving market conditions and focus on the health and well-being of our employees while successfully serving our clients. The construction segment is aligned to the significant infrastructure investment commitments by all levels of government across Canada, as well as by the private sector. The concession segment is pursuing a number of large-scale infrastructure projects that require private finance solutions, and participating as a concessionaire on the five P3 projects identified on this slide. Aecon expects that demand for its services will remain strong following the COVID-19 pandemic, as the federal government and provincial governments across Canada have identified investment in infrastructure as a key source of economic stimulus once the country reaches the recovery phase. Turning now to slide eight.
As Dave mentioned earlier, backlog at the end of the quarter was CAD 7 billion. The timing of work to be performed for projects in backlog as of March 31st is subject to some uncertainty due to the impact of COVID-19 and related slowdowns, rescheduling, and in some cases, suspension of work for an indeterminate period. As such, we have not provided detail on estimated timing of backlog work off at this time, but we'll endeavor to do so as visibility improves. In addition, certain projects that were expected to be available to Aecon to bid on to secure new revenue have been delayed. Any such delays are currently expected to be temporary, and the current backlog and level of new awards year to date have remained robust. To date, no projects that were previously recorded in Aecon's backlog have been canceled.
Trailing 12 months recurring revenue was down 17% compared to last year, as certain projects typically performed through the recurring revenue model in our utilities operations were undertaken as defined scope backlog contracts in the period. Total revenue in utilities was higher versus the same period last year and demonstrates the flexibility Aecon has in our contracting model to meet our clients' needs. Turning now to slide nine. I would like to address the significant impacts from and corresponding measures we have put in place in response to the unprecedented events arising from the COVID-19 pandemic.
In terms of operational impacts, with the majority of governments across the jurisdictions in which Aecon operates declaring a state of emergency in response to the COVID-19 pandemic, Aecon's operations have been impacted by work suspension of certain of our projects, either by its clients or due to a broader government directive, by disruption to the progress of projects due to the need to modify work practices to meet appropriate health and safety standards, or by other COVID-19 related impacts on the availability of labor or to the supply chain. The main impacts to date relate to the Bermuda International Airport redevelopment project, where both commercial operations and construction of the new terminal have been suspended. The Montreal REM LRT and partially Site C projects that construction has been temporarily suspended, and nuclear operations where ramp-up on the next phase of refurbishment work has been delayed.
While the impact to these projects, as well as others, will be to reduce revenue and the normal operation resumes, there is no warranty that all related costs will be recovered, and therefore, it is possible that future project margins could be impacted. Aecon has activated continuity plans and a rigorous COVID-19 health and safety assurance process, which meets or exceeds guidance by applicable government health authorities to minimize disruptions to its business and adapt to evolving market conditions and safety standards. These plans include stringent site pre-screening processes, heightened hygienic and disinfection practices, physical distancing, provision of additional personal protective equipment to frontline workers, team separation and staggered work hours where possible, as well as extensive technology-enabled remote work initiatives. As Dave mentioned earlier, Aecon's financial position remains strong and is expected to be sufficient to finance its operations and working capital requirements for the foreseeable future.
Turning now to slide 10, much of Aecon's outlook has been covered in our earlier comments. However, I want to stress several key areas before turning the call over to analyst for questions. While certain projects that were expected to be available to Aecon to bid on to secure new revenue have been delayed, any such delays are currently expected to be temporary, and the current backlog and level of new awards year to date have remained robust. To date, no projects that were previously recorded in Aecon backlog have been canceled. Aecon expects that demand for its services will remain strong following the COVID-19 pandemic, as the federal government and provincial governments across Canada have identified investment in infrastructure as a key source of economic stimulus when the country reaches the recovery phase.
Aecon continues to monitor developments and mitigate risks related to the COVID-19 pandemic and the impact on Aecon's projects, operations, supply chain, and most importantly, the health and safety of its employees. At this time, the majority of governments across the jurisdictions in which Aecon operates have deemed the types of construction projects that constitute the majority of Aecon's contract to be essential services, and therefore, operations are broadly continuing, although in many cases on a modified basis, as noted. As this is still an evolving situation, shifting directives and policies are expected to continue. I want now to personally thank all of Aecon's employees, in particular our frontline workers, for their dedication, commitment, and professionalism during this challenging time. Thank you. Be safe, and we will now turn the call over to analyst for questions.
At this time, ladies and gentlemen, if you would like to ask a question, please go ahead and press star, then the number one on your telephone keypad. Your first question today comes from the line of Yuri Lynk of Canaccord Genuity. Your line is open.
Hi, good morning, guys.
Morning, Yuri.
Obviously, a lot of moving parts. I understand that margins in Q2 likely to be impacted as I think you'll probably be carrying some overhead costs associated with the projects that are shut down. I get that. Are your clients trying to download the cost associated with delayed projects by not recognizing COVID-19 as a force majeure event?
Yes, Yuri. It's an interesting question. None of our contracts are similar. Mainly speaking, when we receive an instruction by government or an authority or a client to suspend, we are covered for time and financial compensation. When works being declared as essential services are going on, the impacts on productivity are negotiable with our clients. Most of the time, the delay is not an issue, and so far, most of our clients have just gone through a very positive attitude in order to help us to navigate through this challenging time.
The clients are by and large going to be eating the resulting cost overruns, and you don't expect to see a material amount of that downloaded to you?
As I said, most of our clients are very positive. The work is extremely collaborative to try to find the good response to this pandemic. What we can say is that most of our work are on as essential services. Works continue under stringent procedures. As I told you, that meet all Canadian applicable government requirements. What we have just realized during the last five-six weeks now is that it works. It means that when our team followed the rules about screening, about hygiene, about disinfection, about physical distancing, about taking care about shared tools, about masks, and about staggered work hours and team separation. When our teams follow the rules, it works. We have very few positive cases.
On another hand, what we have been proving during the last week is that when a team doesn't follow the rules, it can become a problem and rather quickly. After a certain discovery phase, everybody now is well acquainted with what has to be done, and we just have to be extremely focused on ramping our productivity and the new methodology of works, and we are working very hard on it.
Okay, thanks. Last question from me, and I guess related to that, is there any way you can quantify or qualify the pace of backlog burn on the projects that are continuing at this point versus pre-shutdown?
Yeah. The projects are continuing. Really, from a revenue perspective, not huge impact. As Jean-Louis said, there was a period of time where we went through a little bit of disruption right around quarter end, where we were working out what the appropriate work practices would be going forward. Now we've got all the protocols in place. Work is progressing pretty much as normal on all those projects. It's only really the projects that have been formally put on hold, where we're seeing any kind of gap in revenue burn.
Okay. I'll turn it over, guys. Thanks.
Your next question comes from the line of Maxim Sytchev of National Bank Financial. Your line is open.
Hi, good morning.
Good morning.
Maybe I'll start with a question to David, if I may. When we look at the concession rights in the cash flow from investing of CAD 20.7 million. That's down versus last year. I'm just trying to see, because you're not actually doing construction right now in Bermuda. Should we expect, I guess, a much smaller contribution on that concession rights in the cash flow from investing on a, let's call it, for the next two quarters? Is that the way we should be thinking about this?
Yeah. That number was coming down anyway because we're getting near to the end of construction of the new terminal. Obviously, we're in a period of time here where construction has ceased. We're hopeful construction will start up again in Bermuda in short order, hopefully early May. The number was coming down anyway because we're through the bulk of the main construction period where we had a lot more workers on site, a lot more activity. We're really now into just finishing the interior of the terminal and starting to get to the phase where we're commissioning all the systems and equipment and baggage handling and all that kind of stuff. The construction piece in Bermuda has really ramped down anyway in terms of volume.
Okay. Fair enough. In terms of once you start amortizing the new concession, once you're done construction of the new terminal, is there a different pace of the amortizing concession assets on the cash flow statement vis-a-vis the income statement?
In the cash flow statement, the amortization, it's non-cash. I'm not quite sure I follow your question. Obviously, once we go into the new terminal, the amortization number comes down in the P&L because up until now, we've been amortizing the existing terminal over the life of construction. Going forward, we'll be amortizing the new terminal over the remaining 27 years of the concession. The absolute number in terms of amortization is coming down in the P&L. I'm not sure what you're getting at in terms of cash flow side.
Sorry. Because when I look at last year, for example, 2019, the concession rights on the cash flow statement is like CAD 160 million. I'm just trying to get a better sense in terms of how we should be thinking about this on a going-forward basis?
Yeah. That investment in concession rights is effectively the cost of construction building up.
Right.
Obviously, as I said, that's slowing down now as we reach the end of construction. Once we reach the end of construction, that balance will start to be amortized down. You've got the amortization going through the P&L, and that's effectively reducing the balance sheet concession right investment every period.
Right. Okay. No, that's really helpful. Thank you. Then just in terms of, you mentioned you're hoping for the Bermuda restart in May. Can you maybe provide, and maybe that's a question to Jean-Louis, based on your conversations with clients in terms of some opening up, is that what you guys are expecting that in May, at some point, most of these projects will get going again? I guess how are you internally thinking about managing capacity and so forth to be able to ramp up on REM, Bermuda, and so forth?
What is important to note is that on most of the projects that have not been suspended, it's not a zero one activity. It means that we just know now that before the vaccine or adequate treatment will be on the market, it will be a continuous ramp-up, but with different methodology of work. Yes, we just consider that it's not even May. We have begun to ramp up in productivity after a sort of discovery phase by all our workers about this new method of working. We think that we have the situation internally under control. In terms of absenteeism, we have probably benefited from a lot of other construction projects that were not essential. The workers from those sites have just come to our sites.
What we have to be careful about is about supply chain, to be sure that while we will ramp up progressively, what we have already begun, we don't have default of our supply chain, then can hamper this ramping up. This is where we are at the moment. Bermuda may be a little different, as David said. Most probably what we are hearing at the moment is that we may be able to resume construction during the first half of May on all our finishing trades. The rest being commissioning and integrating systems that may take a little more time because we have to wait for experts being able to monitor the commissioning and coming from abroad Bermuda. This is where we are at the moment.
All right. Going back to David, I believe you were capitalizing the interest on Bermuda. That will start to get expensed once you physically finish the construction, right? Is that how we should be thinking about this?
Yeah. I think we flagged in our year-end release that we expected the new terminal to open kind of mid-year. That would mean we would start expensing the interest at that point in time as opposed to capitalizing it. Now it's more likely the new terminal will open at the end of the year or early next year. We'll continue to capitalize any interest now through that construction period, and start to expense it once the new terminal opens. That will delay the expensing of that interest. I just want to come back to your earlier question, Max. By the way, I think Max was also asking specifically about the other projects that are suspended, like REM and Site C, and what our expectations are for a restart on those projects.
Maybe I can comment on this. REM has been suspended, first by the province of Quebec, then by CDPQ, our clients. We are now working for trying to reopen it during the first 15 days of May, under the decision of the government. We are working extremely closely with CDPQ, we'll be ready to come back to work as soon as the authorities allow it. Site C has been partially suspending on all activities that are not on the critical path of the global project. Probably, the trigger of this decision was about the camp. You know that it's a remote place, we have a camp where most of our workers and workers of other joint ventures are living. To be careful, to be sure that there could not be an outburst of cases, this decision was taken by BC Hydro.
There have not been any positive cases in the camp of Site C. It means that we are expecting probably a relaxing of this suspension within the two to three weeks to come on the job of Site C.
Okay, that's very helpful. Thank you very much. That's it for me.
Your next question comes from the line of Benoit Poirier of Desjardins Capital Markets. Your line is open.
Yeah. Good morning, everyone. With respect to Bermuda, could you comment a little bit about when the traffic will come back? If you could talk about the traffic these days, and also what are the mechanism that protects you against the significant reduction in activity at the airport? Thanks.
Hi, Benoit. Different to our comments about the construction side in Bermuda and the hope that we're then going again in May, the expectation is that the commercial traffic at the airport will take a little longer to open up again. We'll see whether it's June or later, there's been no decision made around that by the government. Our expectation is, once the airport reopens for operations, it will take a period of time for traffic volumes to start to build up again. I don't think anybody expects this to be a quick return to normal in terms of air traffic. We'll see what happens with other airports and airlines generally, it's going to take a period of time for things to get back to normal for sure.
We're kind of envisaging a slow ramp-up once operations begin again at the airport. In terms of any kind of backstop, that really kicks in over a longer period of time. The real intent of that backstop, which is a minimum revenue guarantee provided by the government, is to protect the cash flow of the airport to the extent that there's any shortfall required to repay the debt on the airport. That's why the debt financing on the airport is non-recourse to Aecon, because it's all either generally specifically by the project or backstops by the government. We're not into that scenario yet where that would kick in. Obviously in a worst-case scenario where this was extended over a longer period of time, the debt repayments or the cash flow needed for those debt repayments is protected.
Okay. That's great color, David. With respect to some other concession opportunities that you were looking, I was wondering if the pandemic will slow your ability to secure a new project to replace Bermuda, or would it be the opposite, where some governments might take the opportunity to renovate their airport during the downturn as a stimulus package?
I will answer this. We are constructive, and we are optimists always. Of course, we just feel that from this crisis situation, we can emerge better and in better position on some of these markets, and we just feel that it will create new opportunities. We are ready for them. Evidently, the fact that we are not able to travel and to have one-to-one, face-to-face discussions and meetings may not help. This being said, we just see this as being an opportunity to develop these sort of projects in the future, and we are ready for this.
Okay. With respect to the government stimulus, Jean, if we go back to slide seven where you show the six business segments, which segment would benefit the most from the government stimulus, and would it be fair to say that some projects may be fast-tracked thereafter as a form of stimulus?
Yes. We have to be a little careful about fast track because evidently the major projects are long lead projects with environmental assessments, with engineering that has to be fully developed before we can build them. What is sure is that roads and highways will benefit from the stimulus package. You've probably heard that Alberta has already announced that they will put in place a CAD 2 billion plan for new jobs. They don't require a lot of engineering. There may be resurfacing of highways. There may be maintenance or rehabilitation of special structures. We really think that this can go very quick. On another hand, utilities also should rebound very quickly. The commercial operators are extremely pushy to try to expand their networks, and the situation created by the COVID with more people working from home just requires more power to all the utilities.
We think that this also will most probably benefit from the stimulus package. All other sectors are also well-positioned. It may be probably better a midterm stimulus than a short-term one.
Okay. That's great color. Could you talk maybe a little bit about the potential opportunities with Voltage Power since you completed the acquisition, Jean-Louis?
Yes. We are very happy about this acquisition. It was a strategic target. We are happy with the team. The team is now with us from the month of February. They are integrating very well. We want to develop in the markets of power distribution. They are extremely competitive in this field, and they are known all over Canada, although based in Manitoba, and also some power substations. We just follow this with a lot of care. We are very happy to see that the integration is going well, and we are looking forward for a lot of very interesting projects between Voltage Power and Aecon.
Okay, thanks. Last one for me. Could you maybe talk a little bit about whether there's been a shift in your capital allocation priority, more specifically about the CapEx expectation for 2020 and also the desire to revisit your share buyback program with the first quarter results?
Benoit. Certainly on the CapEx side, we are pushing back anything that's non-essential in terms of capital spend. Obviously, with most of our projects continuing on, they have their equipment needs and other capital needs, so we'll continue to fund those. Anything that isn't required and can be pushed off to next year or a later period, we're certainly doing that. We expect CapEx to be lower than last year, but we don't have the ability to completely freeze it because most of our operations carry on.
In terms of NCIB, obviously we paused that while we were in the blackout period. Now coming out of that period, we're back into a period where we have the optionality and flexibility to be opportunistic, and we'll continue to monitor what's happening in the market and make decisions as and when. No fixed plans either way at this point. We'll just continue to monitor how things unfold.
Okay. Maybe just a quick one. Could you talk about the timing for ramping up the second reactor on the nuclear side, given now the first one is winding down?
Yes, I can take this one. We are mechanically complete on the first unit at OPG Darlington from mid-March. It's a great success. You probably remember that the former units a few years ago had been extremely difficult. This one has been finalized for us on time and on budget. Now we have handed over the unit to OPG operation team, that are just going to ramp it to be able to switch on this unit to the grid. That should happen around the end of Q2. From this moment, OPG could be in a position to disconnect the second reactor and allow us to enter in the vault and to begin with our preparatory works. Under these times of COVID-19 pandemic, OPG is favoring the operation of the reactors to produce and is very cautious about mixing teams of construction with operation.
This disconnection of the second unit to be able to begin the refurbishment works will probably happen during Q4, but the decision on the exact date has not yet been taken. We know that OPG is now thinking about eventually bringing back a little earlier, the beginning of the work. Most probably before the end of the year and maybe earlier in Q4 or end of Q3. It's a decision under OPG management.
Okay. Regarding Bruce?
Regarding Bruce. Bruce, we are beginning with the first reactor. Everything is going as planned, and it seems to be that we will be able to enter the first reactor at Bruce Power between the end of July and middle of August.
Okay. Thank you very much for the time.
Thanks very much.
Your next question comes from the line of Frederic Bastien of Raymond James. Your line is open.
Hi, good morning.
Good morning.
I appreciate you're dealing with a bunch of disruptions that impact your ability to work at a normal pace, but as you limit or spread the number of trades on site, are you seeing a positive offsetting impact on employee productivity?
That's a very interesting question. We are just discovering or figuring out that in some cases we can do more with less. This is why this crisis, at the end of the day, I think will allow us to be better. Just the physical distancing, just the fact that speaking may be an issue even if you have mask. We have extremely focused employees on their own task, and we just realized that it's a balancing effect. Of course, wearing masks, being extremely careful about not sharing tools is an issue and has impact on productivity. On another hand, now that people have realized that this really protects them, there is a very strong focus on executing. It is evident that we will have lessons learned from this crisis, and they will be very interesting for the company.
I know it's maybe early days, but could you provide some of those positive lessons that you may be able to take away from this?
We have also realized that most of our administrative staff can work perfectly and very efficiently from home, so it may be a little difficult to bring them back to the office. Sure, we will have to think about it. Our systems are functioning very well. Everybody is connected. All our supporting teams are perfectly supporting our operations from home. It's probably a different way of looking at our offices. Probably, in terms of supporting teams, that is going to be very interesting. In terms of what I call the operational excellence, I told you about productivity, about focusing on the task. It's evident that this crisis will probably push for more prefabrication, more pre-assembling. Having on-site only the strictly necessary access of the building.
Great. I appreciate your answers. Thank you.
Your next question comes from the line of Jacob Bout of CIBC. Your line is open.
Good morning.
Morning, Jacob.
I had a question on your backlog. What percent could be at risk of termination or what percent could be at risk of being pushed out or delayed in your mind right now?
As I mentioned earlier, none of the projects that we have put in backlog have been either canceled or postponed. There may be some issue about our productivity when we are under essential services. We don't see a real impact on the volume of our backlog so far. On another hand, there is an extremely robust pipeline of prospects and very diverse that perfectly fit with our different operating sectors. I would tend to say that we are not that much worried about the future. Evidently, as you can notice from what we have been telling you from the beginning of this conference, Q2 is going to be challenging. We are extremely focused on our productivity.
We are focused on our jobs, and we will take care of them, but not that much worried about the backlog, even without talking about additional short-term shovel-ready projects that both federal and provincial government are getting ready.
This Rio Tinto termination you view as a one-off?
Yes. It's a very special case. As you know, we are very much joint venture with Frontier-Kemper as with a share of 40%. Works are fairly well advanced. It's not at all a problem of performance. It's much more a problem of safety and commercial. We don't think the termination is appropriate, and we are still studying all alternatives. It's a unique case, and we are dealing with this unique case as we have to do it.
Just on the concessions. You talked a bit about Bermuda revenue being tied to traffic volumes. Is it similar for the Canadian concessions, or how should we think about that?
Yeah. The Canadian concessions, I guess two things. They're still primarily in the construction phase, we're not in the concession phase yet, other than Waterloo, where we're a very small piece of that concession. The model in the Canadian P3s is very different in that they're essentially availability payment models. They're not tied to traffic or overall ridership or revenue from those transportation systems. No impact at this stage because they're not really in the concession phase yet. They would be a very different model. There's no traffic risk on the Canadian P3s.
Okay. That's it for me. Thank you.
Your next question comes from the line of Michael Tupholme of TD Securities. Your line is open.
Thank you. Good morning.
Morning.
Morning.
The first question, perhaps for Dave, relates to whether or not you've seen any changes in collectability of receivables or receivables being extended at all. As a follow-on to that, just your views or thoughts around how we should think about changes in non-cash working capital this year. Last quarter, you had talked about the full year looking, I think, sort of relatively flat, like not materially higher or lower. Just wondering if you can provide an update on those fronts?
Yep. No, we haven't really seen any issues around collectability of receivables. If you look at our project profile and client profile, we work primarily with governments or government agencies.
Okay.
I would say, if anything, they're motivated to keep all their contractors well-funded right now as part of the broader government push to support the drivers of the economy in the current situation we're in. From that perspective, no concerns. Even on the private client side, we only work with blue-chip private clients where we have very strong confidence in their funding and their ability to pay for the work that is done. Whether it's utility clients or major manufacturing or processing clients, we have no concerns over the financial viability of any of the customer base. No, we haven't seen any impacts on receivability. Just in terms of the overall outlook for the year, nothing really has changed in terms of our view of overall working capital.
I think, obviously, we expect some lower volume in Q2 for the projects that have been impacted. I don't think large enough in the grand scheme of things to really impact the overall working capital profile. Most of those projects are kind of milestone-based or are funded in advance because they're either P3s or very large civil projects. Our views haven't really changed in terms of the full year working capital outlook.
Okay. I realize this is somewhat early days, just in terms of how long the impacts of the COVID-19 pandemic have been affecting the situation in Canada. As far as your bidding activity, have you seen any changes in competitive behavior, and/or do you expect there to be any changes in competitive behavior coming out of this situation?
Yeah, I will take this question. In terms of our bidding activities, all small and medium projects are just going on at the normal pace. Bigger project have been postponed, not indefinitely. Most of them have been postponed between six weeks and two months and a half. In terms of either delivering an RFQ proposal from our joint ventures or delivering an RFP, I mean, a bid. It means that we are not that much worried about activity. In terms of the competitiveness, it's very early. What is sure is that this sort of crisis will probably make our competitor more prudent. I just take an example. Usually, these clauses on force majeure were not a big part of the negotiation of the contract.
Evidently, it's going to become a very important point, and the way you can have relief on time and on money is going to be a very interesting development. This is what I can answer as of today.
Okay. That's helpful. Thank you. Then just lastly, just back on Bermuda as far as the operations of the existing airport. You provided some commentary around how we could possibly think about the airport reopening and taking some time for traffic volumes to normalize. While the airport is closed, can you just talk about the downside risk as far as your concession segment from an EBITDA and cash flow perspective? I'm just trying to understand if, is this simply a situation where you may not receive what you would have otherwise expected in an ordinary environment? Is there actually a situation where you're incurring costs here, there's actually material downside to the negative side?
Mike, in terms of while the airport is essentially closed, there's a very small volume of cargo traffic going in and out of the airport and a couple of other flights associated with just logistics. While the airport is essentially closed to all commercial traffic, we have a fixed cost base there of give or take CAD 1 million a month. It's not huge from that perspective. Obviously, though, from an EBITDA perspective, Bermuda, I think it's kind of known as roughly 2/3 of our concessions EBITDA. To the extent it's not operating and not generating revenue for a period of time, depending on how long that period of time is, I think people can kind of estimate the impact that might have from an EBITDA perspective.
Cash flow isn't really impacted in the short term because all the cash being generated by those operations effectively kind of sits in Bermuda as restricted cash and ends up being part of the cash that eventually goes to repay the debt and distributions. Those distributions aren't due to start for a period of time anyway. There's no short-term cash impact from the suspension.
Okay. That's helpful. Thank you, Dave.
Your next question comes from the line of Chris Murray of AltaCorp. Your line is open.
Thanks, folks. Good morning.
Hi, Chris.
Good morning.
Just maybe turning back to the pipeline a little bit, and some of the delays. I guess just trying to understand a couple different things here. One, how much of the delays are, call it mechanical, just difficulties in accessing processes and getting together with folks to move the paperwork along? How much of this is clients sort of saying, "Let's just hold off on maybe committing to funding or spending at this point"?
We have not seen any client trying to pull off from funding or from putting on the market their projects. This is very important. It may even be the contrary. On another hand, you have probably seen the changes at the head of the Canadian Infrastructure Bank. Michael Sabia from CDPQ is just stepping in. We like this because we have been dealing with CDPQ to acquire the REM projects, and we know that Michael knows how to get things done. I would not be worried about the future of the pipeline. The projects are there. Client are just, when there is a delay, they just take a sort of prudential attitude to say, "We don't know exactly how it's going to end up, this COVID-19 crisis.
Let's have a little more weeks of understanding how it can work, so that we can deal with the eventual impact, and we launch our project. This is the way they are reacting. We do not see any projects being stopped because of this crisis.
Okay. You're not seeing any differences in behavior between public sector and private sector clients, then?
Not that much. As you know, a very significant part of our activities is from public sectors and infrastructure. In those moments, following the shock of this COVID-19, infrastructure is going to be a major part of their action. We have much less than before exposure to private clients. It may be industrial, and as you know, we don't do any more high-rise building or commercial building going with the real estate developer, so it is not that much an issue for us.
Okay. My other question is just maybe a little more theoretical. Even coming into this, you were still working from pretty healthy backlogs. You'd seen some good growth over the last couple of years, but part of the discussion was also around people and your capacity to even absorb more work. The question is, if there actually is stimulus dollars that come into the system, how do you think Aecon is going to perform, and how is the industry going to be able to absorb, which is probably adding on to almost already record levels of work?
It's a very interesting point. What I've just said during the last months, and you probably remember, is that we are comfortable with the backlog between CAD 6 billion and CAD 8 billion. The aim of our company is not to grow extremely quickly. It's to be more profitable. It's to be better organized on our site. It's to be, in term of operational excellence, it's to be the top company in Canada in terms of infrastructure. We are comfortable with our size. What is also sure is that we are not a holding company. We have boots on the ground. We have superintendents. We have team leaders. We have construction manager. We have field engineer working with us. We are in a constant process of educating, of bettering the skills and the capacity of our people.
I'm not seeing, at this stage, any real issue with being able to take the good part of the stimulus package that will come in golden highway. I'm not worried about it. As usual, we will be disciplined in bidding, but we will have to take those opportunities, and our organization just makes us able to do it. As you have seen, between our organization, our own people, our financial strength, I think that Aecon is really very well-equipped to navigate through this strong but temporary crisis and what will follow this crisis.
Okay. Thank you very much.
There are no further questions in queue at this time. I turn the call back to the presenters for any closing remarks.
Thanks very much, Amy, and thank you all for joining us today. Obviously, these are interesting times, so we're always available to speak afterwards. Feel free to try and meet at your convenience. Stay safe, and we look forward to speaking to you all soon. Thank you.
This concludes today's conference call. You may now disconnect.