NOA Q2 2026 - Post-Call Earnings Update
Verdict
- Management confirmed the revenue raise carries no profit. Asked directly whether the higher revenue guide came with flow-through costs, the CFO agreed: "it's a cost conclusion there." The C$100m midpoint increase is pass-through, and the adjusted EBITDA range was held at C$380–420m for that reason.
- Capital spending was quietly guided up. Total 2026 capital moves from "a little bit under CAD 200 million to above CAD 200 million", driven by roughly C$50m of oil-sands fleet work — this against first-half sustaining capital of C$84m versus the C$60–70m full-year figure given in December.
- Free cash flow guidance did not move. C$110–130m stands, with C$28.0m generated in the first half and a 30% conversion target reaffirmed as the medium-term shape.
- The one thing that matters: revenue up, capital up, free cash flow flat, net debt up C$191m to C$1.1bn. Everything management chose to raise on this call is a use of cash, and the one number that measures what shareholders get was left alone. The second half has to produce C$82–102m of free cash flow to hold it.
- Tone flag: an unusually confident call for a company whose CEO seat is not yet filled — a successor is to be announced "in the coming weeks".
Consensus scorecard
| Metric / basis | Quartr actual | API Ninjas consensus | Beat/Miss | Beat/Miss % |
|---|---|---|---|---|
| Revenue (total reported revenue) | C$401.0m | Not comparable — consensus published in USD | — | — |
| EPS (adjusted, company basis) | C$0.32 | Not comparable — consensus published in USD | — | — |
Guidance & KPIs
| Item | New on the call | Prior guide | Prior-year actual |
|---|---|---|---|
| 2026 combined revenue | C$1.6bn – C$1.8bn | C$1.5bn – C$1.7bn | Midpoint ≈14% above 2025 |
| 2026 adjusted EBITDA | C$380m – C$420m | C$380m – C$420m | Unchanged |
| 2026 free cash flow | C$110m – C$130m | C$110m – C$130m | H1 2026 actual C$28.0m |
| 2026 total capital | "A little north of" C$200m | "A little bit under" C$200m | H1 sustaining capital C$84m |
| Contractual backlog | C$3.8bn, a record | — | — |
| Net debt / leverage | C$1.1bn, 2.9x trailing | — | 2.6x on 2H run rate |
Management commentary
- The oil-sands plan was made concrete: 260 multi-life heavy assets designated as the target fleet, a medium-term mechanical availability target of 70%, roughly C$50m of 2026 spend to get there, incremental investment underwritten to IRRs above 40% and gross margins "in the 15% range".
- Demand commentary was the most emphatic on the call — lengthening haul distances mean more trucks to move the same volume, and Palmer described pricing work "every day" after a two-year lull.
- The Australian bid pipeline fell sequentially because NOA lost a large tender to the incumbent and missed one at IMC. Management reframed the loss as capital-light upside, since the client has since asked about placing a fleet or two on the same site.
- The 30% free-cash-flow conversion target was reaffirmed and IMC, at 15% of the business, was said not to change it — with the caveat that it holds "when working capital is neutral".
- IMC margins were acknowledged as structurally below the Queensland equipment-rental business because the work is unit-rate, with upside only from outperformance.
Quality of earnings
- The depreciation line flattered the quarter and it is mix, not thrift. Depreciation fell to 13% of combined revenue from 16%, and below the 15% midpoint the company guides to, because IMC is less capital-intensive. That mix benefit lands directly in EBIT and in the C$0.32 adjusted EPS.
- Adjusted EPS and reported earnings still point in opposite directions. The C$9.4m of net income behind C$0.32 of adjusted EPS contains a C$12.1m non-cash fair-value gain on contingent obligations; reported net income fell 9% while adjusted net earnings rose to C$8.5m from C$0.8m.
- Financing cost is scaling with the platform. Interest expense rose to C$18.9m from C$14.1m at a 6.4% average cost of debt, after C$200m of senior unsecured notes were raised in the quarter.
Gotchas & watch items
- Sustaining capital is running well ahead of plan — C$84m in the first half against a C$60–70m full-year figure guided in December — and management's answer reset total capital upward rather than reconciling the sustaining line.
- Free cash flow of C$28.0m in the first half leaves C$82–102m to be produced in the second to reach an unchanged guide, with the conversion target explicitly conditioned on neutral working capital.
- The CFO cited IMC revenue of C$91m on the call against C$84.5m in the release; the difference is a combined-versus-reported basis, so the two figures are not interchangeable in a model.
- Trailing leverage is 2.9x; the 2.6x figure management prefers is a second-half run-rate presentation, not a reported one.
Event: https://web.quartr.com/companies/11787/events/669088/overview Retrieved: 2026-08-13T20:38:00Z Comparison mode: maximal · Scorecard contract: v1 Consensus for NOA is published in US dollars while the company reports in Canadian dollars and no average rate is disclosed, so no beat or miss is scored.