ATCO Ltd.

Thank you for standing by. This is the conference operator. Welcome to the ADCO limited first quarter 2023 results conference call and webcast. As a reminder, all participants are in listen only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Mr. Colin Jackson, Senior Vice President of Finance, Treasury and Sustainability. Please go ahead, Mr. Jackson.

Thank you. Good morning, everyone. We're pleased you could join us for ATCO's first quarter 2023 conference call. With me today is Executive Vice President and Chief Financial and Investment Officer, Katie Patrick. Before we move into our formal agenda, I would like to take a moment to acknowledge the numerous traditional territories and homelands on which our global facilities are located. Today, we're speaking to you from our Akko Park head office in Calgary, which is located in the Treaty 7 region. This is the ancestral territory of the Blackfoot Confederacy, comprised of the Siksika, Kainai, and Pagani Nations, the Tsitsinu Nation, and the Stony Nakota Nations that include the Chikniki, Berespa, and Good Stony First Nations. The City of Calgary is also home to the Métis Nation of Alberta, Region 3. We honor and respect the diverse history, languages, ceremonies, and culture of the Indigenous people who call these areas home. Katie will begin today with some opening comments on recent company developments and our financial results. Following these prepared remarks, we will take questions from the investment community. Please note that a replay of the conference call and a transcript will be available on our website at ATCO.com and can be found in the investor section under the heading, events and presentations. I'd like to remind you that all our remarks today will be willing that Our remarks today will include forward-looking statements that are subject to important risks and uncertainties. For more information on these risks and uncertainties, please see the reports filed by ACCO with the Canadian securities regulators. And finally, I'd like to point out that during this presentation, we may refer to certain non-GAAP and other financial measures, such as total of segment measures, adjusted earnings, adjusted earnings per share, and capital investment. These measures do not have any standardized meaning under IFRS, and as a result, they may not be comparable to similar measures presented in other entities. And now, I'll turn the call over to Katie for her opening remarks.

Thanks, Colin, and good morning, everyone. Thank you all very much for joining us today for our first quarter 2023 conference call. ATCO achieved adjusted earnings of $137 million, or $1.21 per share, in the first quarter this year. This is $3 million, or $0.04 per share, higher than the first quarter last year. This $3 million of growth came primarily from the strong performance of our structures business, combined with great performance across our broader portfolio of investments. Collectively, this more than offset the expected downwards earning pressure associated with the rebasing of our Alberta distribution utilities within the Canadian utilities investments. Having gone through PBR rebasing five years ago, we have been really focused on driving growth throughout other areas of our portfolio to help mitigate this pressure. You can see the results of this with the strong results in the quarter. Jumping into ACCO structures, we delivered adjusted earnings of $19 million in the quarter, $3 million higher than the same quarter last year. As you've heard Adam and I talk about many times now, A key strategic priority within our structures business is the expansion of our base business earnings. The successful execution of this strategy was a key driver of our earnings growth in the first quarter. Both our core space rentals business and our newly acquired Triple M housing division delivered exceptional results in the period. Compared to the first quarter of 2022, we grew our space rentals fleet size by 14% and our average rental rate by 19%. all while achieving an average utilization rate of 75%. Moving on to Triple M, this business performed exceptionally well in the quarter, which helped offset the contribution last year from our LNG Canada project, which is now complete. As Triple M is a newer business line for us, I thought it may be helpful to touch briefly on the seasonality of this business and how this interacts with the profile of our overall structures business. Generally speaking, Triple M sees its strongest earnings in the first and fourth quarters of the year as it works with dealers to lock in orders and construct the units necessary to support dealer inventories. This quarter's results likely represent half or more of the full year expectations for this business. In contrast, our broad structures business sees a stronger earnings correlation to periods of high construction and economic activity. In Canada, this tends to be in the warmer second and third quarters. This counter-cyclicality is important to note when looking at the performance of our overall structures business and further reinforces the strategic alignment of this acquisition. As I've mentioned in the past, our base business typically accounts for two-thirds to three-quarters of our segment earnings. In addition to this, we saw strong project activity further supporting our earnings growth. At ECHO Frontec, first quarter earnings declined nominally from 2022 levels as the Trans Mountain Clearwater Camp contract was completed and startup costs on the recently signed Pogo Mines project created earnings pressure. Frontec has, however, been very active in signing new contracts that will support earnings moving forward. One notable example of these efforts was the signing of a camp services contract with BHP Janssen. The three-and-a-half-year contract will see Advil Frontex, alongside our Indigenous partner, George Gordon Developments, provide camp support services for the BHP Janssen Discovery Lodge in Saskatchewan. The transition of camp services was completed on April 1st of this year. As discussed previously, our Frontex business continues to see great opportunities in the defence and government spaces where deep Indigenous relationships can be leveraged alongside our core remote services expertise. Now, touching on Neltume ports, the business continued to deliver stable and dependable earnings, with favorable foreign exchange impacts pushing first quarter adjusted earnings higher when compared to 2022. As you will have seen in our news release, Neltume just signed a significant contract two days ago at the Port of Vancouver in Washington State. This will see Nel Tume with our partner Nautilus operate Terminal 2 in this port for a 30-year period with two 10-year extension options. We are really excited about this opportunity as it is another milestone in Nel Tume's focus on expansion into North America. As expected, our Canadian utilities investments saw adjusted earnings decline nominally in the first quarter of 2023 when compared to the first quarter last year. This decline was due to the sharing of efficiencies generated in the second PBR cycle with customers as the Alberta distribution utilities enter a single year cost of service period in 2023. As Brian spoke about Canadian utilities Q1 results on this morning's CEU earnings call, I won't go into these details again here. I would, however, like to reiterate that while the earnings pressure related to BPR rebasing was somewhat muted in the first quarter, we continue to expect more downward pressure throughout the year. More specifically, first quarter CU results benefited from a few specific items. Favorable timing of costs within the distribution utilities, the proactive advancement of work into 2022 that would have otherwise been completed in the first quarter of this year, strong performance of CU's non-regulated businesses, and continued outsized earnings from the Australian gas utilities. Collectively, these factors muted the earnings decline related to rebasing for the first quarter of 2023. Overall, ATCO had a great first quarter. The acquisitions that we've made contribute to short-term earnings. These new investments, along with the proactive decisions we've made across our diverse portfolio, will help to partially offset the cyclical earnings pressure that we expect in 2023 related to our PBR utilities. That concludes my prepared remarks. I will now turn the call back to Colin.