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Aecon Group Inc.  (TSX:ARE)
Q1 2019 Earnings Call
April 26, 2019, 10:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning. My name is Christina and I will be your conference operator today. At this time I would like to welcome everyone to the Aecon Q1 2019 Earnings Conference Call. (Operator Instructions) Adam Borgatti SVP of Corporate Development and Investor Relations, you may begin your conference.

Adam Borgatti -- Senior Vice President, Corporate Development and Investor Relations

Thank you Christina. Good morning everyone and thanks for participating in our first quarter 2019 results conference call. This is Adam Borgatti speaking. 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 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 your questions from analysts.

As noted on Slide 2 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 will now turn the call over to David.

David Smales -- Executive Vice President and Chief Financial Officer

Thank you Adam and good morning everyone. I'll touch briefly on Aecon's consolidated results and then review results by segment before turning the call over to Jean-Louis.

Turning to Slide 3 of the presentation, commencing in 2019 Aecon's Infrastructure and Industrial segments were combined into a construction segment to align with Aecon's new operating management structure. This was driven primarily by the progress Aecon has made in recent years with respect to the One Aecon strategy which has increasingly allowed for integrated project management and systems allowing Aecon to capitalize on those markets providing the greatest opportunity at any point in time.

Turning to Slide 4. Revenue for the three months ended March 31st 2019 of CAD650 million was CAD107 million or 20% higher compared to the same period in 2018 with increases in each segment. Revenue was 35% higher on a like-for-like basis excluding the contract mining business sold in November 2018.

Slide 5 outlines the adjustments to reflect the impact of the sale of the contract mining business. Adjusted EBITDA for the first quarter of 2019 of CAD11.9 million, a margin of 1.8% increased compared to adjusted EBITDA of CAD3.7 million, a margin of 0.7% for the first quarter of 2018 and grew significantly versus adjusted EBITDA of negative CAD9.2 million and negative margin of 1.9% on a like-for-like basis in the prior year.

Likewise the first quarter operating loss of CAD10.8 million and diluted loss per share of CAD0.16 all showed considerable improvement compared to the same period in the prior year on the back of higher volume and improved margins. Reported backlog as of March 31, 2019 of CAD6.7 billion compares to backlog of CAD4.6 billion a year earlier, representing an increase of 46%.

Now turning to results by segment. As noted on Slide 6, construction revenue of CAD638 million in the first quarter was CAD108 million or 20% higher than the same period last year. The increase was driven by higher revenue in civil Infrastructure in both Eastern and Western Canada as well as from urban transportation systems and nuclear power infrastructure in Eastern Canada. These increases were partially offset by lower volume in utilities as well as conventional industrial operations following the sale of the contract mining business in November 2018.

Adjusted EBITDA in the construction segment of CAD7.3 million, a margin of 1.1% was up by CAD1.5 million compared to CAD5.8 million a margin of 1.1% in the first quarter of 2018. Despite the sale of the contract mining business, which contributed CAD12.9 million of EBITDA in the same period last year. Significant improvement in EBITDA from the balance of the construction segment in the first quarter of 2019 was due to a combination of higher volume and improved gross margin.

New contract awards of CAD561 million in the first quarter of 2019 were CAD336 million lower than the same period last year. Construction backlog at the end of the first quarter was CAD6.7 billion, which is CAD2.1 billion higher than at the same time in 2018. The largest period-over-period increase in backlog occurred in civil Infrastructure and urban transportation systems driven primarily by large project awards during 2018 including the REM Montreal LRT, the Finch West LRT and the Gordie Howe International Bridge projects.

Turning to Slide 7. Concessions revenue for the first three months of 2019 was CAD58 million, an increase of CAD27 million or 85% compared to the same period last year. This higher revenue was primarily a result of the Bermuda International Airport Redevelopment Project including the impact of increased construction activity related to the new airport terminal. Adjusted EBITDA in the concessions segment of CAD14.8 million, a margin of 25.5% was up by CAD4.9 million compared to CAD9.9 million a margin of 31.6% in the same period last year. The increase was primarily due to increased contribution from management and development fees for Canadian concessions secured during 2018.

At this point, I'll turn the call over to Jean-Louis.

Jean-Louis Servranckx -- President and Chief Executive Officer

Thanks David. Let's go to Slide 8. As David mentioned earlier, our backlog at the end of the first quarter was CAD6.7 billion. Backlog to be worked off in the next 12 months of CAD2.3 billion increased 50% over the one last year and you can note approximately two-third of this backlog is for work off beyond the next 12 months providing us significant visibility and stability for Aecon long-term outlook. Aecon's annual recurring revenue, which grew by 3% on a like-for-like basis over last year was driven primarily by utilities work in telecommunications, gas and hydro distribution as well as operation at the Bermuda airport.

We do remain extremely focused on the strong execution of our backlog while ensuring we continue to build capacity and flexibility for further growth. If we go to Slide 9 and 10 Aecon's balance sheet, financial capacity and cash generation remain key advantages in our ability to grow and take advantage of the significant level of expected infrastructure investments in Canada in the coming years as well as to pursue select international projects.

Now turning to our outlook on Slide 11. Aecon continues to see significant infrastructure investment commitment by all levels of government across Canada as well as by the private sector. This investment focuses primarily on civil infrastructure, urban transportation systems, nuclear power, utility and pipeline infrastructure which perfectly aligns with Aecon's core strengths. Aecon's strong program of work underpinned by backlog as well as a robust pipeline of new opportunities supports an expectation of like-for-like revenue and EBITDA growth in 2019 offset to some extent by the sale of the contract mining business in November 2018. In our construction segment, bidding activity is expected to be solid in 2019, although new awards are not likely to match the record level of new awards achieved in 2018.

With strong backlog in hand, the focus has shifted to ensuring strong execution and selectively adding backlog through a disciplined bidding approach that supports continued like-for-like margin improvement in the segment. In the concessions segment it (inaudible) partner with Aecon's construction segment to focus on the significant number of P3 opportunities in Canada and on the selected basis internationally. The overall outlook for 2019 remains solid as our current strong backlog, robust pipeline of future opportunities and ongoing concession are expected to lead to another year of improved like-for-like results compared to 2018.

Thank you and we will now turn the call over to analysts for questions.

Questions and Answers:

Operator

(Operator Instructions) Your first question comes from Yuri Lynk from Canaccord Genuity. Your line is open. Please go ahead.

Yuri Lynk -- Canaccord Genuity -- Analyst

Good morning guys.

David Smales -- Executive Vice President and Chief Financial Officer

Good morning.

Jean-Louis Servranckx -- President and Chief Executive Officer

Good morning Yuri.

Yuri Lynk -- Canaccord Genuity -- Analyst

I just wanted to make sure I understood the outlook section. It's got me a little confused, so it's calling for like-for-like revenue and EBITDA growth partially offset by the sale of the contract mining business. Not sure how to interpret that. Can you just clarify if that means you're expecting to exceed the CAD207 million in adjusted EBITDA generated last year?

David Smales -- Executive Vice President and Chief Financial Officer

So without going overly granular Yuri, I think what we're saying is forget contract mining, we expect growth from the balance of the business in both revenue and adjusted EBITDA in 2019. Obviously when you factor in the fact we had contract mining in 2018 and we don't in 2019, that will offset some of that growth. But I'm not going to land on a specific number, but when we say partially offset then I think you can read into that. Yes, we don't expect it to more than offset the impact of the exclusion of contract mining.

Yuri Lynk -- Canaccord Genuity -- Analyst

Okay. But the like-for-like isn't that referring to comparing '19 with '18 excluding the contract mining from '18?

David Smales -- Executive Vice President and Chief Financial Officer

Correct. And we expect that to be up in terms of revenue, adjusted EBITDA.

Yuri Lynk -- Canaccord Genuity -- Analyst

Okay. And then just looking out to the balance of the year I just would like some help on how to think about the third quarter. Obviously it was a very tough comp last year CAD89 million and that's where the consensus is for this year. But I think that would have had CAD7 million of contract mining and then you had a bunch of line three work, which was pretty quick book and burn. So I just want to make sure I am understanding that correctly. And just maybe flag any offsets that might make it not such a tough comp, but at this point it looks like that will be difficult to achieve again in Q3.

David Smales -- Executive Vice President and Chief Financial Officer

I'll remind you that in the number you're calling for 2018 Q3 of CAD89 million, we had about CAD7 million of EBITDA from contract mining that won't be there. So you're talking on a year-over-year basis, comparable number of CAD82 million. Q3 is always our strongest quarter. Don't expect that to be any different this year. There is some moderation in seasonality, but it's quite slight. You see that in our Q1 numbers. But we still expect Q3 to be the strongest quarter. And again I'm not going to say where we're going to be relative to CAD82 million. But Q3 will represent a very strong quarter for us based on the profile of the work that we have going on this year and the level of revenue we expect from major projects.

Yuri Lynk -- Canaccord Genuity -- Analyst

No. No absolutely. But I guess, is it true that the line 3 work I think it was like CAD130 million, CAD140 million that was basically booked and burned in Q3. I'm thinking about that correctly right as a headwind?

David Smales -- Executive Vice President and Chief Financial Officer

Yes. That was in Q3. I mean, but we all -- every year we have projects ramping up ramping down. As you can see from our commentary around revenue overall as well as backlog, we have more than enough work to offset what we were doing at line 3 last year. So that was just one of many projects, so I wouldn't read too much into the fact that one project that we had in Q3 last year, it was in Q3 this year. If you look at our backlog breakdown and work off in the next 12 months that's up significantly from where it was this time a year ago. So yes, it's one project that won't be there. But there will be many other new projects that will be there.

Yuri Lynk -- Canaccord Genuity -- Analyst

Okay. That's very helpful. I will hop back in the queue. Thanks guys.

Operator

Your next question comes from Jacob Bout from CIBC. Your line is open, please go ahead.

Jacob Bout -- CIBC World Markets -- Analyst

Good morning. Wanted to start off with a question on the margins of the construction group. From our math on apples-to-apples basis, it was -- there's an uptick of almost 2.5%. Just talk about what was driving that and was that anomaly or is that kind of a normal course on a go-forward basis?

David Smales -- Executive Vice President and Chief Financial Officer

I'll be predictable by saying that, we say this every quarter, but no one quarter in isolation should drive your margin expectations for the following quarter. We talk about looking over kind of 12-month window. That particularly applies in Q1, just given the relative size of the numbers and the ability for one or two things to drive that margin up or down in a particular quarter when your volume is not as high as later in the year. So I think it's reflective of the fact that we have a strong backlog with good margin profile in that construction business. But when we talk about progression in margin on a kind of 12-month basis, we're talking about modest gradual improvement over time, we're not talking about Q1 representing a step change that you should be assuming for the balance of the year.

Jacob Bout -- CIBC World Markets -- Analyst

So on an apples-to-apples basis comparing it year-on-year what drove that uptick?

David Smales -- Executive Vice President and Chief Financial Officer

Well higher revenue clearly is the biggest driver of that. When you've got a quarter that is typically fairly low in volume and fairly large proportion of fixed costs, which over the year is offset by higher revenue later. If you have some higher revenue in Q1 then there's quite a lot of operating leverage there to that fixed cost base plus we said the new major projects have a better margin profile and there is more of those in the mix in Q1. So it's a combination of things, but I would say, operating leverage based on higher volume is a big component of that.

Jacob Bout -- CIBC World Markets -- Analyst

A couple of projects that you missed out on the Ottawa Stage 2 and the Pattullo project. Maybe talk a bit about what's happened. And are things getting a little more competitive in the space?

David Smales -- Executive Vice President and Chief Financial Officer

Okay. I don't think it's getting more competitive. I would just say we adjusted quite at Gordie Howe, which is an extremely important bridge. And the fact not to be on Pattullo is not of real relevance. I mean, it's not a big deal for us.

Jacob Bout -- CIBC World Markets -- Analyst

Okay. I'll leave it there. Thank you.

Operator

Your next question comes from Derek Spronck from RBC. Your line is open, please go ahead.

Derek Spronck -- RBC Capital Markets -- Analyst

Yeah, good morning. Thank you for taking my questions. Just in terms of ramping up your project work, any changes in terms of equipment availability, labor availability and how should we be thinking about working capital here for the next three quarters? Thank you.

Jean-Louis Servranckx -- President and Chief Executive Officer

Okay. I'm extremely happy with the ramping up of our major projects. If we can take a few example, for example, REM in Montreal, remind you, it's a CAD5 billion job that has to be completed in March 2024. We had a very good preparation during the winter regarding utilities, regarding engineering and preparatory works. And we will have a very strong I would say spring and summer season on REM. Site C is in the same condition.

I'll remind you that Site C is a job with BC Hydro, 700,000 cubic meter of concrete. We finalized during the winter season 25,000 and now we are just ramping up extremely quickly. For example last week we brought 2,500 cubic meter only during one week, I mean that, all those projects are going well and schedule and budget. In term of equipment not that much of a problem. Everything has been forecasted and we are perfectly on line with our forecast.

Derek Spronck -- RBC Capital Markets -- Analyst

And how should we think about working capital sir?

David Smales -- Executive Vice President and Chief Financial Officer

Yeah, I was going to come back to that. So from working capital perspective, obviously over the course of the year it's driven by our usual seasonality where we tend to use cash through Q2 and Q3 and then see an inflow in Q4 and typically in Q1 depending on what's going on in any typical quarter, that's a normal profile. I don't see that being any different this year. I think overall for the year, I think working capital will be a modest net positive for cash, not dissimilar to 2018 in terms of profile of working capital for the full year and on a single basis.

Derek Spronck -- RBC Capital Markets -- Analyst

Okay. That's great. In terms of any projects that you're currently working on, are there any projects that you're losing sleep on. I saw there was a CAD60 million increase in unbilled revenue. I don't know if that's just regular seasonality or project timing-related. Any color there would be helpful. Thank you.

David Smales -- Executive Vice President and Chief Financial Officer

So in terms of unbilled, I mean, that's just a reflection of on these large major civil projects that are significant milestone payments at various times. So as opposed to being paid kind of monthly or every two weeks, you basically have big milestone payments at certain points in time, which can lead to build up in unbilled until you reach certain phases. But it's nothing other than the normal cycle of working capital.

Derek Spronck -- RBC Capital Markets -- Analyst

Okay. And any projects that you're currently working on that might be coming up to completion that you're worried about? Are you fairly comfortable with the project profile of your existing projects right now?

Jean-Louis Servranckx -- President and Chief Executive Officer

No, so far we don't expect these sort of problems. I mean we are extremely focused and disciplined regarding the execution of our backlog. I'm putting a lot of pressure on all my team on the quality of the preparation of the works, on the quality of the engineering, of the integration of the engineering with works, of the quality of the execution, the scheduled traceability on our project control. And I can just say that so far all our projects are on track.

Derek Spronck -- RBC Capital Markets -- Analyst

Okay. Great. And just one more for myself and I'll pass it over. There was a pickup of finance lease debt due to IFRS and only just a modest increase in EBITDA. I think you indicated CAD1.7 million in EBITDA add due to the IFRS change. That seems a little bit low relative to the amount of finance debt that was added because of the accounting change. Should we assume that CAD1.7 million EBITDA add back due to the accounting change is reflective of each quarter going forward? Or how should we think about that?

David Smales -- Executive Vice President and Chief Financial Officer

So, that's the right way to think about it.

Derek Spronck -- RBC Capital Markets -- Analyst

Okay. Fair enough. Thanks, David. Okay, thank you, that's all my questions.

Operator

Your next question comes from Chris Murray from AltaCorp Capital. Your line is open, please go ahead.

Chris Murray -- AltaCorp Capital Inc. -- Analyst

Thanks folks, good morning. Just if we can, I just was kind of curious about some of the restatements in your segmented note. And what I'm trying to understand a little bit better is the eliminations between construction and concessions. So is it fair to think now that what we're seeing in the other in eliminations bucket is really the construction work being done primarily for the Bermuda airport?

David Smales -- Executive Vice President and Chief Financial Officer

Yes.

Chris Murray -- AltaCorp Capital Inc. -- Analyst

So that's what we're seeing. So we're now able to see a cleaner more direct number in that, OK. So the question I've got is, in the quarter you talked about CAD43 million in construction revenue, but another CAD2.5 million in revenue intersegment. Is that -- where is that other CAD2.5 million coming from?

David Smales -- Executive Vice President and Chief Financial Officer

I'm not sure I know where that number -- what number you're referring to there Chris, but the vast majority of it as I said is revenue between construction and concession related to Bermuda. There's obviously a few other things going through on the concession side where we have construction ongoing, but any delta is driven by Bermuda primarily.

Chris Murray -- AltaCorp Capital Inc. -- Analyst

Okay. And then just so I'm making sure that I'm understanding this correctly. The rest -- the majority of what we're seeing in the concessions segment in reported is tied to Bermuda and then the other projects you've got, things like Waterloo and Eglinton they're all coming through as the equity pickup correct?

David Smales -- Executive Vice President and Chief Financial Officer

Correct. Although it's also reflected in the operating profit for concessions. But when you look at consolidated P&L as opposed to a segment breakout, yes, the Canadian concessions are primarily on the income from equity-accounted projects.

Chris Murray -- AltaCorp Capital Inc. -- Analyst

Yes. Just, I mean, David, I guess, where I'm getting at is, as the concessions business comes -- gets bigger, we're having to start to value the concessions business separately from the construction business. So I am just trying to make sure I understand how you guys have changed it in the resegmenting, so just where that one goes. Along those lines, just thinking about Bermuda, we still have I guess construction going through the middle of 2020, any thoughts around additional P3s and P3 opportunities that you guys are seeing right now? And how we should think about -- how any of the growth in that equity pile or that equity method there or gain over the next few years is going to change independent of Bermuda?

David Smales -- Executive Vice President and Chief Financial Officer

Sorry, Chris. You mean the equity-accounted investments as likely to be lower...

Chris Murray -- AltaCorp Capital Inc. -- Analyst

Yes, so I am thinking about the Canadian concessions, you know...

David Smales -- Executive Vice President and Chief Financial Officer

To the extend we will involve Canadian concessions where we're not in control with joint venture partners, then yes, that is likely. We continue to bid a pretty healthy pipeline of P3 opportunities. So if we secure more then yes, they will likely be based on the structure of those P3s equity-accounted projects.

Chris Murray -- AltaCorp Capital Inc. -- Analyst

Okay. But I guess what I'm also trying to understand to is, I mean, you recorded CAD3 million in equity pickup in the quarter. Is that a good run rate to be thinking that you're at right now and really what's the growth rate in that as you continue to progress through the construction maybe over the next year or two?

David Smales -- Executive Vice President and Chief Financial Officer

Yes, I think, it's likely to be increasing based on our normal seasonality. So for example in Q1 some of the work that we will be doing at the peak of the season on some of these projects will be increased. But it's not -- most of it comes from the concession side where it's really management fees tied to construction in terms of timing or recognition of those. So there is some seasonality to it, but it's not huge. But Q1 would be on the low side for that contribution.

Chris Murray -- AltaCorp Capital Inc. -- Analyst

Okay. All right. We'll try to figure it out as we try to -- back into the construction summer. Just coming back to your comment on the outlook around like-for-like. I mean the way you've characterized there was like-for-like growth, then we started, I think further to Yuri's question, you started talking about sort of absolute dollars on a like-for-like basis. Just trying to maybe can you just go through this one more time because it's a little fuzzy on. Are you talking about like the growth rate '17 versus '18 and to '18 to '19 ex mining? Or is it just the absolute numbers? And if not the underlying construction business offsetting mining, can you end up kind of in the same place for '19 as you were '18? Just it's -- it's just a little fuzzy.

David Smales -- Executive Vice President and Chief Financial Officer

Chris, I don't think we've ever talked about it being related to growth rates. We're talking about absolute dollars growth 2019 versus 2018 if you exclude contract mining, which contributed over CAD200 million of revenue in 2018. Obviously that growth will be offset to some extent by the fact that CAD200 million plus of revenue won't be there in 2019.

Chris Murray -- AltaCorp Capital Inc. -- Analyst

Okay. That's helpful. Thank you.

Operator

(Operator Instructions) Your next question comes from Michael Tupholme from TD Securities. Your line is open. Please go ahead.

Mike Tupholme -- TD Securities -- Analyst

Thanks, good morning. I was wondering if you can comment on Aecon's outlook for future potential Infrastructure work in Ontario in particular and possibly provide any thoughts on the recent Ontario provincial budget?

Jean-Louis Servranckx -- President and Chief Executive Officer

Okay. I would say simply it is a moment for Aecon when we just read what the Ontario government has produced during the last two weeks just in terms of major project, (inaudible) extension, Eglinton West, Ontario Line, I mean, all those kinds of jobs are our specialties. I mean, they are our pieces of cake and we are perfectly ready to catch them. So it's a very good news.

Mike Tupholme -- TD Securities -- Analyst

And some of these projects Jean-Louis are obviously quite large in size and is considerable lead time until from the time that the projects would be awarded. But would you possibly envision any awards in the province of these kinds of projects during 2019?

Jean-Louis Servranckx -- President and Chief Executive Officer

Okay. I'll just remind you that our backlog is almost CAD7 billion. The job we have in our backlog is, I mean, just take a few days, REM is there to be finalized in 2024, going out to the end of 2024. Finch, 2023, it means that this is a long time from now. So we are not that much worried about the lead time on the new projects. I would say, it's even good for us. And of course, on all those projects I've been talking about a few minutes ago there will not be any award in 2019.

Generally speaking we had explained I mean during the last month at 2019 (ph) most probably going to be bidding years and an award year. And it's good for us, I mean, it just gives us all the time to deploy our capacity on our new backlog and to have people working on the bidding there. I just give an example, during the last few days, we just submitted two big P2, one in Edmonton, Edmonton Valley Line and one in Vancouver as the Millennium Line. So -- and we are not worried about the pace of works coming.

Mike Tupholme -- TD Securities -- Analyst

Okay. That's helpful. Thank you. Separate question, the last several quarters you've talked in your outlook about some improvements in commodity prices in particular oil, but not yet to levels that would incite clients to move necessarily forward with projects. Just wondering, we have seen oil rally pretty strongly through the first part of the year here, albeit off of low levels at the end of last year. But wondering if you can just update us on what you're hearing from some of your clients in the energy sector in particular, but also possibly the commodity sector more broadly?

Jean-Louis Servranckx -- President and Chief Executive Officer

Okay. We mainly see it in our industrial operating sector. It is true that the oil prices have been on the upside for over last months and we can see in our potential industrial clients that they are gaining more traction on new plans called derivative of oil, which is good for us.

Mike Tupholme -- TD Securities -- Analyst

Okay. Perfect. And then just anything else outside of oil specifically in terms of other resource areas such as mining?

David Smales -- Executive Vice President and Chief Financial Officer

I'd say nothing substantial at this point Mike. I think we've talked a number of times in the past about upticks in engineering activity and then things slowed down again. And I would say at this stage, there is nothing concrete that suggests that's going to be a significant opportunity in the near term. I think we'll have to see how prices hold up over a longer period and whether that stimulates people actually making investment decisions. But at this stage nothing concrete.

Mike Tupholme -- TD Securities -- Analyst

Okay. And then just lastly Dave, it looked like the tax rate in the first quarter was a little bit higher than I expected. Can you just talk about what you expect the effective tax rate for the year to look like?

David Smales -- Executive Vice President and Chief Financial Officer

Yes. I don't expect it on a full year basis to be significantly different to 2018. I mean, it depends a little bit -- the things that drive it are kind of mix of earnings and where they come from which provinces, Bermuda et cetera. But overall over the course of the year, no, I don't expect any big shift in the tax rate.

Mike Tupholme -- TD Securities -- Analyst

Okay. All right. That's all I had. Thank you.

Operator

Your next question comes from Frederic Bastien from Raymond James. Your line is open, please go ahead.

Frederic Bastien -- Raymond James -- Analyst

Good morning guys. I was wondering if you could talk about how Bermuda is actually going both in terms of the construction and the operation of the existing airport traffic-wise and things like that?

Jean-Louis Servranckx -- President and Chief Executive Officer

Okay. I will first answer on the construction side. It's going quite well. We are all targeting the substantial completion for mid-2020. I don't see any problem with this project on the construction side.

David Smales -- Executive Vice President and Chief Financial Officer

Yes. And from an operations perspective, going well, continues to go well. In terms of passenger numbers, they continue to be strong and are growing. And we expect continued good performance from that operation.

Frederic Bastien -- Raymond James -- Analyst

Is the traffic at the airport experiencing better than what you underwrote your contract with?

David Smales -- Executive Vice President and Chief Financial Officer

Yes, I mean, if you -- I mean there's obviously a financial model that drives the financing and everything else and that's built on pretty conservative forecasts and early days into a 30-year concession obviously. But yes, so far so good in terms of passenger growth today has exceeded what was built into that financial model.

Frederic Bastien -- Raymond James -- Analyst

Good to hear.

David Smales -- Executive Vice President and Chief Financial Officer

I don't think that's particularly unusual. These finance models are usually pretty conservative. So we went into it expecting that and it's delivered on those lines so far.

Frederic Bastien -- Raymond James -- Analyst

Okay. And then obviously over the past several years you've been investing in some P3 concessions internationally. Are there any other ones that you are looking at right now potentially looking at investing and contributing to the construction?

Jean-Louis Servranckx -- President and Chief Executive Officer

No, at the moment no, on a short-term basis. But of course, I mean, trying to find another project like the Bermuda one is extremely important for us. So we are -- we have put some business development forces from the last month on the go and we are ready to expand internationally on everything that we do well at home.

Frederic Bastien -- Raymond James -- Analyst

Thank you very much.

Operator

Our next question comes from Maxim Sytchev from National Bank Financial. Your line is open, please go ahead.

Maxim Sytchev -- National Bank Financial -- Analyst

Hi, good morning.

David Smales -- Executive Vice President and Chief Financial Officer

Good morning Max.

Maxim Sytchev -- National Bank Financial -- Analyst

David, just, not trying to do belabor the guidance thing, but correct me if I'm wrong, but in 2018 you also had a number of unusuals that were part of the EBITDA. So what clean EBITDA sort of like-for-like that you are using for 2018 that you are building your expectations off for 2019?

David Smales -- Executive Vice President and Chief Financial Officer

Yes, I think in 2018 Max, those are in the contract mining adjustment. You basically had in the first quarter of last year a couple of million dollars of onetime cost related to wrap up of the sale process and some severance. But outside of that, I don't think there's anything else in Q2, Q3 or Q4. So it's a very minor impact year-over-year.

Maxim Sytchev -- National Bank Financial -- Analyst

Okay. So we're talking about like CAD190 million-ish clean EBITDA for 2018, correct?

David Smales -- Executive Vice President and Chief Financial Officer

You mean, excluding contract mining?

Maxim Sytchev -- National Bank Financial -- Analyst

Correct.

David Smales -- Executive Vice President and Chief Financial Officer

Yes, I mean, that would -- no, it would be a little lower than that Max. You see we reported CAD206 million of EBITDA last year, CAD207 million. And contract mining was around CAD30 million of that.

Jean-Louis Servranckx -- President and Chief Executive Officer

CAD21 million.

David Smales -- Executive Vice President and Chief Financial Officer

So CAD180 million, CAD185 million-ish.

Maxim Sytchev -- National Bank Financial -- Analyst

Okay. So again, what you're suggesting that, excluding the change -- sorry excluding the mining then, does it mean that you're not going to be able to match the absolute number that you generated in 2018 with the mining?

David Smales -- Executive Vice President and Chief Financial Officer

You look at -- what we've said, like-for-like growth will be partially offset by the impact of no longer having contract mining, which indicates we expect -- to fully offset the like-for-like growth.

Maxim Sytchev -- National Bank Financial -- Analyst

Okay. So, OK, a positive delta. Okay. So in terms of Q1, I know, you didn't call it out at all, but was there any negative weather impact at all in Q1?

Jean-Louis Servranckx -- President and Chief Executive Officer

I mean nothing abnormal, I would say, I mean, Q1 is winter. And so, we have climate impact of course. I'll just remind you that, for example, on Eglinton, we are still on civil works, what will not be the case in 2020, we will be inside, I mean, inside the ground with (inaudible). But there is nothing abnormal in Q1 in terms of climate.

Maxim Sytchev -- National Bank Financial -- Analyst

Okay. That's helpful. And actually Jean-Louis and I guess a question to you and to David as well. I mean, given the share price volatility that we've seen over the last let's call it month for, I would say, no specific reason, any incremental thought on having a share buyback program as a backstop to deal with that type of volatility? And any thoughts there?

David Smales -- Executive Vice President and Chief Financial Officer

So we talked about in previous quarters the fact that we look at that on a fairly regular basis. At this stage there is no plan to announce a normal course issuer base, but we'll continue to monitor where things go from here and keep that at the forefront of our minds in terms of an potential opportunity depending on how things unfold. But no announcement on that.

Maxim Sytchev -- National Bank Financial -- Analyst

All right. But I mean, it's still something that obviously you consider?

David Smales -- Executive Vice President and Chief Financial Officer

Sure.

Maxim Sytchev -- National Bank Financial -- Analyst

Okay, all right. Thank you very much. That's it for me.

Operator

Your next question comes from Derek Spronck from RBC. Your line is open. Please go ahead.

Derek Spronck -- RBC Capital Markets -- Analyst

Yeah. Thank you. Just a quick follow-up on, in the first quarter, in your outlook, you indicated adjusted EBITDA margin improvement and that commentary wasn't included in this quarter's outlook. Any change there?

David Smales -- Executive Vice President and Chief Financial Officer

No, no change to our outlook for 2019.

Derek Spronck -- RBC Capital Markets -- Analyst

Okay. Thank you.

Operator

And your last question comes from Benoit Poirier from Desjardins Capital. Your line is open. Please go ahead.

Benoit Poirier -- Desjardins Capital Markets -- Analyst

Good morning gentlemen. To come back in Bermuda, I was wondering, if you could provide some color about the -- where you are or the timing around maximizing the value for these assets. I understand that you're finishing construction, the traffic is also very good. But I was wondering where do you think there could be a potential opportunity to potentially divest partially or fully the asset and recycle that money into other concession opportunities?

Jean-Louis Servranckx -- President and Chief Executive Officer

Okay. As we have already said, all options are open. I mean, we all want 100% of the Bermudan project. We still have to finalize the works and then to transfer from the old airport to the new airport, what will be done mid-2020. And at this moment we will consider what are our option and what could be the best one. We have not taken decision at the moment about an eventual divestiture, partial divestiture or not at all.

Benoit Poirier -- Desjardins Capital Markets -- Analyst

Okay. Okay. That's very good color. And obviously when we look at the Canadian opportunities, it's still very, very robust, so you have a big backlog that will be delivered over the next few years. You've been talking that eventually you would look at the U.S. strategy. I understand it's not a rush, but any update on the plan or how long do you still have to time to take a look at the potential entry into the U.S. market finally?

Jean-Louis Servranckx -- President and Chief Executive Officer

Okay. As you can see in the pipeline for Canada, I mean, there is still a lot of project off the table. And I would say every quarter new projects are arising. It means that, we have no rush, I mean, we look at U.S. as a potential opportunity for our future growth, but we have no rush. I mean, of course, we are working on it. But we have not set up neither a date or a side, I mean, we just want to be sure to be able to save the best opportunity what is going to be ready in front of us.

Benoit Poirier -- Desjardins Capital Markets -- Analyst

Okay. That's it for me. Thank you very much for the time.

Operator

There are no further questions at this time. I turn the call back over to the presenters.

David Smales -- Executive Vice President and Chief Financial Officer

Very good. Thanks Christina and thank you all for joining our call today. Have a great rest of the day. And as always if you have any questions, feel free to follow-up. Thanks.

Operator

This concludes today's conference call. You may now disconnect.

Duration: 45 minutes

Call participants:

Adam Borgatti -- Senior Vice President, Corporate Development and Investor Relations

David Smales -- Executive Vice President and Chief Financial Officer

Jean-Louis Servranckx -- President and Chief Executive Officer

Yuri Lynk -- Canaccord Genuity -- Analyst

Jacob Bout -- CIBC World Markets -- Analyst

Derek Spronck -- RBC Capital Markets -- Analyst

Chris Murray -- AltaCorp Capital Inc. -- Analyst

Mike Tupholme -- TD Securities -- Analyst

Frederic Bastien -- Raymond James -- Analyst

Maxim Sytchev -- National Bank Financial -- Analyst

Benoit Poirier -- Desjardins Capital Markets -- Analyst

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