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Engineering giant WSP grows across the board in the first quarter

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WSP, one of Canada’s largest engineering consultancies, boosted its top line by 2.7% in the first quarter and managed to improve its profitability while doing so.

Taken at face value, a 2.7% year-over-year sales improvement is not much even by the standards of a company like WSP that is growing from a large revenue base. But this figure doesn’t take into account the fact that firms in the engineering space often subtract certain financial items from their top line numbers. After subtracting those items, WSP’s net revenue growth amounted to 4.7% in the first quarter.

The firm’s sales climbed at an even faster pace when adjusting for the fact it logged a different number of billable days in the year-ago quarter. After making that update, WSP’s growth rate for the first quarter ticks up to a healthy 6.5%. In absolute numbers, the firm generated total and net sales of $3.59 billion and $2.79 billion, respectively.

WSP assists clients with the construction of both commercial and residential buildings. The firm’s consultants can not only develop the design of a new property, but also sort out the business details and oversee construction. WSP can also work with clients to upgrade existing properties.

Beyond the building engineering space, the firm takes on public works projects. It has helped build roads, bridges and many other types of infrastructure around the world.

In the third quarter, one of the best performers under the WSP corporate umbrella was its Canadian business. The unit grew its top line by 8.3%, significantly faster than the company as a whole, thanks in large part to increased revenue from transportation and infrastructure projects.

The sales performance of WSP’s Americas business trailed the company as a whole, but the unit’s backlog, a measure of future sales, jumped by a respectable 10.3%. The unit now has $14.2 billion worth of contracts in the pipeline.

“With the final year of our strategic cycle underway, our first quarter performance has set a solid foundation for the remainder of 2024,” said WSP CEO Alexandre L’Heureux, referring to a multiyear effort the firm launched in 2022 to boost its financial performance. “We are moving forward with confidence as our focus remains on delivering our ambitions, bolstered by healthy market conditions and growth opportunities.”

WSP’s strong quarterly performance had a positive impact on its bottom line. The firm’s adjusted EBITDA margin improved by half a percentage point to 16%, while adjusted net earnings rose 13.3% to $193.8 million.