Atco Ltd (ACLLF) (Q3 2026) Earnings Call Highlights: Adjusted Earnings Rise 9% as Landmark ...

Q & A Highlights

Q: How is ATCO thinking about its current manufacturing capacity for ATCO Structures and the potential need to add further capacity, organically or through M&A? A: CEO Nancy Southern said ATCO has a remarkable backlog of manufacturing projects and is assessing greater expanded manufacturing capabilities, particularly in the US market. She noted the state-of-the-art factory in Chile has been slow but is now reaching full capacity amid rising copper prices and mining of rare earth materials in South America, especially Chile and Argentina. She sees expansion in manufacturing as the world shifts toward greater access to mineral resources needed for security, defense and tech.

Q: How should investors think about the timing and pacing of potential investments by new ATCO beyond its current markets, particularly Europe? A: CFO Katherine-Jane Patrick said she hopes it is just around the corner, citing a tremendous opportunity for the rebuild in Ukraine. However, ongoing tension and violence from the Russian attack on Ukraine mean that likely will not occur in the immediate future. She noted demand is starting to percolate from adjacent European countries, primarily on the defense side, for increased housing, accommodation and facilities at forward operating bases, adding it is not right in front of ATCO but not that far away.

Q: How should investors think about the repeatability of contracts like the single Defense Construction Canada contract that generated $6 million of adjusted earnings this quarter, and the longer-term earnings trajectory for Frontec? A: CEO Nancy Southern said ATCO had expected large, announced defense contracts for forward operating bases in Inuvik, Yellowknife, Iqaluit and Gander, but those have been delayed due to restructuring of agencies and the procurement process out of Ottawa. She said these are probably imminent in the next half year, and ATCO plans to play a very large role in developing those operations as well as the construction opportunities they present.

Q: What are new ATCO's priorities for its balance sheet and dividend policy, and will it benchmark its dividend against industrial services peers? A: CEO Nancy Southern said new ATCO would be expected to be in line with peers on dividends, noting it is a very different business from utilities. She said the businesses in new ATCO are, for the most part, able to self-fund new investments and are all cash-driven. ATCO would look to stay in line with peers on payout ratios and dividends, and she would like to see new ATCO develop a history of increasing dividends for many years as it creates greater prosperity for shareowners.

Q: What is the outlook for Neltume Ports, what drives future growth, and what rate of growth can new ATCO shareholders expect in the near term? A: CEO Nancy Southern said that since ATCO acquired its 40% position, COVID hit and supply chains have bottlenecked through traditional trade corridors, with large ports such as Los Angeles, Valparaiso and Vancouver experiencing major congestion. Shippers on both the supply and demand side are shifting to mid-sized ports, where ATCO sees growing opportunities to increase volumes and efficiencies. She highlighted excitement about Rio Grande and Grays Bay, and said volume acceleration, especially on the bulk side including copper concentrate, minerals, coal and soda ash, is already driving expansion even before the Vancouver, Washington State port is commissioned.

Q: Does ATCO anticipate that the US midterm election results will change the pace of opportunities for ATCO Structures in the US? A: CEO Nancy Southern said she does not think momentum in the United States will shift much with the midterms regarding defense and security, though there may be some tempering of the pace of defense-side growth. She noted many US contracts relate to defense, including camp improvements, but primarily miners seeking to provide critical minerals sourced in the US for ammunition, armaments, uniforms, Kevlar and night goggles under the Made in America approach. She said that is why the US is one of ATCO's first manufacturing expansion areas, with good opportunities and growth.

Q: Did anything in the federal budget stand out that could accelerate new contracts or expansion opportunities in defense spending or housing affordability? A: CEO Nancy Southern said she had not fully digested the budget but looked at the major headline topics and views it as very positive for all of ATCO's businesses, including the CU-Emera merger and the defense side. She said the impetus, incentives and tax-adjusted structures announced in the budget should propel a faster pace in Canada across energy, mining and defense opportunities, and she sees nothing that is a deterrent.

Q: What is ATCO's outlook for reallocating units to support the LNG Canada Phase II expansion and for supporting construction of the Pacific Link Pipeline? A: CEO Nancy Southern said both are on the radar, and she believes the new government in British Columbia will support greater exploration and production in northeastern BC, suggesting opportunities in required infrastructure such as drilling counts. She said the pipeline will require much of the same activity from ATCO Structures that Trans Mountain did. LNG Canada is a different situation because ATCO built the original camp as a permanent camp, including for the expansion, but there are opportunities for additional rental-type units. She said ATCO is especially interested in and talking with the LNG Alaska project, which is seeking 8,000 beds and has had permitting and access delays.

Q: With increasing demand for services and contracts in the North, does Frontec have a commercial opportunity to reset pricing or increase margins from economies of scale, and how material could that be? A: CEO Nancy Southern said she believes there will be a scarcity of resources to address the scarcity of infrastructure, including housing, energy, access and transportation in the Arctic, so margins should be able to increase. She cautioned that ATCO is starting to see a real labor shortage, noting it is almost next to impossible to find additional drilling rig crews in Alberta today, which she sees as a leading indicator for Alberta, BC and the North. She said margins will go up, but costs will also rise with labor.

Q: What drove ATCO's third quarter 2026 adjusted earnings growth, and how did the standalone businesses perform excluding Canadian Utilities? A: CFO Katherine-Jane Patrick said ATCO achieved adjusted earnings of $112 million, or $1 per share, in Q3 2026, up approximately 9% year-over-year. Higher earnings were driven by ATCO Structures' increased space rental activity and earnings from the Stibnite Gold project, along with favorable results at ATCO Gas Australia from inflation indexing on rate base and increased rates, plus growth in rate base across Alberta utilities. Excluding Canadian Utilities, the portfolio

For the complete transcript of the earnings call, please refer to the full earnings call transcript .