EDMONTON, Alberta and NEW YORK - Global design and engineering firm Stantec (NYSE:STN) reported a year of record financial results with a significant increase in net revenue and adjusted diluted earnings per share (EPS) for the year ended December 31, 2023.
The company, trading on TSX and NYSE under the symbol STN, announced a net revenue of $5.1 billion, marking a 13.7% increase over the previous year. Adjusted diluted EPS also saw a rise of 17.3%, reaching $3.67.
The company's backlog grew to $6.3 billion, up 6.8% since December 31, 2022, indicating a robust pipeline of future work. This growth is attributed to organic expansion and strategic acquisitions, with organic growth accounting for 9.9% of the increase.
Stantec's focus on operational excellence and strong project execution led to an adjusted EBITDA margin record of 16.4%. The firm's net income rose by 34.1% to $331.2 million, and diluted EPS increased by 34.2% to $2.98. Excluding the impact of the long-term incentive plan (LTIP) revaluation, adjusted diluted EPS would have been $3.91.
The company also announced the planned retirement of Theresa Jang, executive vice president and chief financial officer. Jang has been credited with strengthening Stantec's financial position since joining the company in 2018. The search for her successor is underway, considering both internal and external candidates.
Looking ahead to 2024, Stantec has raised its net revenue growth and adjusted diluted EPS growth targets, following the acquisitions of companies like Morrison Hershfield, which closed on February 9, 2024. The firm expects net revenue growth between 11% and 15% and adjusted diluted EPS growth in the range of 12% to 16%.
Stantec's financial position is bolstered by a net debt to adjusted EBITDA ratio of 1.0x as of December 31, 2023, and operating cash flows that have increased by 79.0% to $544.7 million.
The company also declared a dividend of $0.21 per share, payable on April 15, 2024, to shareholders of record on March 28, 2024, representing a 7.7% increase.
These results are based on a press release statement and are reflective of Stantec's commitment to sustainable design and engineering, as evidenced by its ranking as the #9 most sustainable corporation in the world by Corporate Knights.
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