ATCO Q3 2026 Earnings Results & Report

ATCO EPS Results

• Actual EPS: C$1.00
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

ATCO Revenue Results

• Actual Revenue: C$1.34 billion
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

As a global enterprise, ATCO (TSE:ACO.X) and its subsidiary and affiliate companies have approximately 20,000 employees and assets of $28 billion. ATCO is focused on delivering essential solutions across the housing, energy and defence sectors, helping build, power and protect a future everyone can count on. ATCO Structures delivers innovative modular solutions that help communities address growing housing demand while supporting industry and economic growth. Canadian Utilities, an ATCO subsidiary, delivers safe and reliable energy services through its utilities, midstream and generation businesses. Together, these operations provide essential electricity and natural gas infrastructure, generation and storage solutions that support customers, communities and industry. ATCO Frontec provides construction and operational support services for defence and security operations.

ATCO Q3 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: ATCO reported third-quarter adjusted earnings of CAD 112 million, or CAD 1.00 per share, up about 9% year over year. Growth was driven by ATCO Structures’ space rentals and Stibnite Gold Project earnings, along with contributions from Australian and Alberta utilities.
• Positive Sentiment: ATCO highlighted its announced merger with Emera: shareholders are expected to receive 0.865 Emera shares and one share in a new standalone ATCO for each existing ATCO share. Management expects the combined utility to provide approximately 20% higher dividend income for ATCO shareholders, while the new ATCO would retain its housing, defense-services, and investment businesses.
• Positive Sentiment: Outside Canadian Utilities, ATCO’s portfolio generated 15% year-over-year earnings growth; Structures & Logistics earnings rose CAD 8 million to CAD 40 million, and standalone-business operating cash flow increased CAD 25 million to CAD 109 million. Management cited stronger space rentals, modular construction sales, and Frontec’s remote-base-camp work.
• Positive Sentiment: Management pointed to potential growth in modular housing, U.S. manufacturing, Arctic defense infrastructure, and Neltume Ports, including a new Brazil terminal project and increased ownership of a Chilean port. It said it is assessing additional manufacturing capacity, particularly in the U.S., though these opportunities depend on projects progressing.
• Negative Sentiment: Some anticipated Canadian defense contracts have been delayed by changes to federal procurement processes, with management expecting them potentially within the next six months. It also cautioned that labor shortages in the North could raise costs and offset some potential margin gains from increased demand.

Presentation

[Operator]

Thank you for standing by. This is the conference operator. Welcome to the third quarter 2026 results conference call and webcast for ATCO Limited. 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.

[Operator]

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 then zero. I would now like to turn the conference over to Mr. Colin Jackson, Senior Vice President of Financial Operations. Please go ahead, Mr. Jackson.

[Colin Jackson, SVP of Financial Operations at ATCO]

Thank you, Chloe, and good morning, everyone. We are pleased you could join us for ATCO's third quarter 2026 conference call. Joining us on the line today is Nancy Southern, Chair and Chief Executive Officer, and Katie Patrick, Executive Vice President and Chief Financial and Investment Officer. Before we move into today's remarks, I would like to take a moment to acknowledge the numerous traditional territories and homelands on which our global facilities are located.

[Colin Jackson, SVP of Financial Operations at ATCO]

Today, we are speaking to you from our ATCO 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, the Kainai, and the Piikani Nations, the Tsuut'ina Nation, and the Stoney Nakoda Nations, which include the Chiniki, Bearspaw, and Goodstoney First Nations.

[Colin Jackson, SVP of Financial Operations at ATCO]

I would also like to recognize the City of Calgary is home to the Métis Nation of Alberta, Districts 5 and 6. During the quarter, employees across Canada recognized the National Day for Truth and Reconciliation by walking together to honor Indigenous communities and their experiences. May we continue to reflect, learn, and respect the diverse histories, languages, and ceremonies, and cultures of Indigenous peoples as we move towards understanding, healing, and reconciliation.

[Colin Jackson, SVP of Financial Operations at ATCO]

Today's remarks will include forward-looking statements that are subject to important risks and uncertainties. For more information on these risks and uncertainties, please refer to our filings with the Canadian securities regulators. During today's presentation, we may refer to certain non-GAAP and other financial measures, including adjusted earnings and adjusted EBITDA. These measures do not have any standardized meaning under IFRS, and as a result, they may not be comparable to similar measures presented by other entities. I'll turn the call over to Nancy for her opening remarks.

[Nancy Southern, Chair and CEO at ATCO]

Thank you, Colin, and good morning, everyone. Thank you for joining us today. Because it is top of mind for me, I would like to begin today by speaking about our recently announced landmark merger with Emera and what it means for the share owners of ATCO. It is an exciting new chapter for ATCO share owners. For each ATCO share, ATCO share owners will receive 0.865 of a share in the merged utility and energy infrastructure company and one share of the new ATCO entity.

[Nancy Southern, Chair and CEO at ATCO]

In other words, if you own 100 ATCO shares, you will receive 100 new ATCO shares and 86.5 shares in Emera. This represents the opportune time to create a Canadian utility and energy infrastructure champion. The combined company will be positioned to meet the significant need for investment in critical energy infrastructure.

[Nancy Southern, Chair and CEO at ATCO]

Its greater scale and financial capacity will ensure safe, reliable, and affordable energy is delivered to our customers for generations to come. ATCO share owners will also benefit from continued ownership in new ATCO, which will emerge as a focused, growth-oriented, standalone platform.

[Nancy Southern, Chair and CEO at ATCO]

New ATCO will continue with ATCO Structures, our market-leading manufactured housing and structures business, with a proven track record of operational excellence and growth, an established defense services platform in ATCO Frontec, with differentiated capabilities in North America's harsh Arctic environment with our Indigenous partners, and a portfolio of investments anchored by Neltume Ports.

[Nancy Southern, Chair and CEO at ATCO]

ATCO share owners will continue to participate directly in Canadian Utilities' next chapter with Emera on a broad range of growth opportunities. By combining capabilities, the merged company will have the scale, expertise, geographic diversity, and financial flexibility to improve efficiency, compete more effectively, and pursue growth opportunities to drive long-term value creation.

[Nancy Southern, Chair and CEO at ATCO]

The merged company is expected to continue its commitment to annual dividend growth and improvement in the dividend payout ratio. Another significant strength of this combination is the people behind it. The partnership brings together two industry-leading management teams from Canadian Utilities and Emera, combining deep operational expertise, strong execution capabilities, and a proven track record of creating long-term share owner value.

[Nancy Southern, Chair and CEO at ATCO]

Importantly, this transaction comes after a period of exceptional performance at Canadian Utilities. Over the past year, that strong performance has helped bring Canadian Utilities' valuation multiple in line with its peers, creating what we believe is an opportune backdrop for a merger of equals. At its core, this transaction brings together complementary strengths to create greater value for shareholders, broaden opportunities for employees, and reinforce our commitment to the regions where we operate.

[Nancy Southern, Chair and CEO at ATCO]

With approximately CAD 45 billion in rate base and operations across some of the most attractive jurisdictions in North America and beyond, we are positioned to meet the growing demand for investment in critical energy infrastructure, such as pipelines and electric interties. The scale of the combined company strengthens our ability to invest in these systems and networks that customers and communities will increasingly rely on in the years ahead.

[Nancy Southern, Chair and CEO at ATCO]

The combined company will have 12 regulated utilities across a diversified geographic footprint and benefit from a larger and more balanced earnings base. Further, diversification enhances resilience by reducing reliance on any single asset, customer group, or market, while providing greater stability through economic cycles. The transaction also broadens the portfolio across leading regulatory and high-growth jurisdictions. Together, the Alberta and Florida jurisdictions are expected to contribute approximately 80% of adjusted earnings.

[Nancy Southern, Chair and CEO at ATCO]

The merger is designed to deliver tangible value for shareholders. ATCO shareholders are expected to receive approximately 20% higher dividend income through ownership in the combined company, in addition to the dividend approved by new ATCO's board following the close of the transaction. While the financial benefits are compelling, they are only part of the opportunity for ATCO shareholders.

[Nancy Southern, Chair and CEO at ATCO]

Looking at the future of ATCO, there are some key tailwinds that I would like to draw your attention to. We find ourselves at a pivotal moment of opportunity, driven by changing geopolitical realities and a growing need for housing and defense services. This environment reflects the spirit that defined ATCO in its earliest days, when bold thinking, entrepreneurial action, and a willingness to tackle complex challenges helped shape our growth and establish the business we know today.

[Nancy Southern, Chair and CEO at ATCO]

New ATCO will focus on three distinct complementary areas of business: housing, represented by ATCO Structures, which provides workforce housing, permanent modular construction of apartments and residential homes, offices, clinics, schools, hotels, and a fleet of over 27,000 space rental units across the globe, units that are available for construction sites, temporary offices, classrooms, and accommodation.

[Nancy Southern, Chair and CEO at ATCO]

On the defense side, led by ATCO Frontec, our defense services and northern infrastructure business provides urban and remote logistics, facility operations, emergency response, and mission-critical support, including the operation and maintenance of the North Warning System and the Alaska Radar System on behalf of NORAD, Thorngate Fuel Services in Iqaluit, and operation and maintenance of the Canadian Forces Base Alert in Nunavut, in addition to 15 defense facilities in Alberta, to name just a few.

[Nancy Southern, Chair and CEO at ATCO]

Our decades of experience across the Arctic, combined with long-established strategic indigenous partnerships, are what differentiates us as a preferred defense contractor. Defense is a core competitive advantage and a key pillar of our growth strategy moving forward. Finally, our investment segment will consist of our strategic investments in Neltume Ports, ATCO Energy, and ATCO Land and Development.

[Nancy Southern, Chair and CEO at ATCO]

Looking specifically at Neltume Ports, this investment gives us ownership in 18 ports throughout South and North America, exposure to critical port infrastructure, and global trade activity across the Americas. During the quarter, the business advanced several important initiatives that reinforce its strong growth trajectory. This quarter, Neltume Ports acquired an additional 50% ownership interest in Puerto Coronel, a port in southern Chile, which increases our ownership to 75%. This acquisition further strengthens the Neltume's portfolio.

[Nancy Southern, Chair and CEO at ATCO]

Alongside this increased ownership interest, Neltume is making meaningful progress on a number of development projects, notably construction at the Vancouver Bulk Terminal in Washington State. It remains on schedule, and we expect it to be completed in the fourth quarter of this year, at the latest, very early in the new year. Beyond investments in existing operations, Neltume is also pursuing new development opportunities.

[Nancy Southern, Chair and CEO at ATCO]

The company formed a joint venture with Chilean pulp and paper group CMPC to develop a pulp terminal at Brazil's Port of Rio Grande. Planned scope of the project includes two ship berths, two barge berths, and a warehouse.

[Nancy Southern, Chair and CEO at ATCO]

Together, these initiatives expand Neltume's platform, support future throughput growth, and enhance its position in strategically important trade corridors across the region. What connects our businesses across ATCO is our experience building, deploying, and operating across these sectors.

[Nancy Southern, Chair and CEO at ATCO]

Current economic demands create a growing need for resilient port infrastructure and services for industries, partners, and governments, which ATCO can support. Following the merger, our established businesses will pursue opportunities that maximize their capabilities, but will now be assessed on their own merits, creating a distinct investment proposition for share owners.

[Nancy Southern, Chair and CEO at ATCO]

ATCO brings established capabilities to areas where governments, communities, and industry are looking for practical solutions. Housing is a clear example. The global need for housing using quick, more efficient ways to deliver quality housing solutions is how our modular business serves these needs across the housing continuum.

[Nancy Southern, Chair and CEO at ATCO]

Delivering contracts on time and on budget, supported by an established global manufacturing footprint. ATCO Structures has demonstrated its ability to build housing solutions 3x faster compared to a traditional conventional wood-frame building.

[Nancy Southern, Chair and CEO at ATCO]

Beyond residential housing, ongoing global infrastructure build-outs require temporary workforce housing and work camp solutions while major projects are constructed. Our workforce housing and space rental capabilities are key to serving those markets. Of note, our ATCO Structures team recently celebrated the grand opening of its expanded modular manufacturing facility in Grimsby, Ontario.

[Nancy Southern, Chair and CEO at ATCO]

118% larger than the original building, the expanded facility supports faster delivery of our high-quality modular solutions. Another major opportunity is tied to our defense segment. There is approximately CAD 180 billion in defense procurement opportunities and another CAD 290 billion in defense-related capital investments expected in Canada over the coming decade.

[Nancy Southern, Chair and CEO at ATCO]

The Government of Canada has placed significant emphasis on Arctic sovereignty, noting the importance of developing the North as the first line of continental defense. This has driven a need for infrastructure, logistics, and reliable operations in one of the most challenging environments on Earth.

[Nancy Southern, Chair and CEO at ATCO]

Together, housing, defense, and our strategic investments reiterate the value of ATCO and signal abundant future opportunities. On that note, earlier this year, we announced a CAD 10 million investment in West Kitikmeot Resources. This is the company that will develop the Grays Bay Road and Port Project in Nunavut.

[Nancy Southern, Chair and CEO at ATCO]

The Grays Bay Road and Port Project is a key infrastructure project that will include an all-seasons 230 km road, a deep-water port with access to the Northwest Passage shipping corridor, and an airstrip. Grays Bay has the potential of dual use for military and civilian capabilities, and this project will help us create new opportunities for sustainable northern development. With our longstanding expertise in northern operations, the project will also demonstrate ATCO capabilities to build out and service this region over the long term.

[Nancy Southern, Chair and CEO at ATCO]

This multi-use asset has already been referred to Canada's Major Projects Office, and in late June, was one of the first projects to be considered under the Government of Canada's Building Canada Act. While we are optimistic about the road ahead, we are equally excited about the projects our teams are developing today, with meaningful opportunities ahead and strong momentum across our business. I will now pass it over to Katie, who will walk through the quarter's financial results.

[Katie Patrick, EVP and Chief Financial and Investment Officer at ATCO]

Thank you, Nancy, and good morning, everyone. Looking at this quarter's strong results, ATCO achieved adjusted earnings of CAD 112 million, or CAD 1 per share, in the third quarter of this year. This is up approximately 9% year-over-year. Higher adjusted earnings in the third quarter were driven by ATCO Structures' increased space rental activity and earnings from the Stibnite Gold Project.

[Katie Patrick, EVP and Chief Financial and Investment Officer at ATCO]

As mentioned on this morning's CU call, ATCO Gas Australia also saw favorable results driven by inflation indexing on rate base and increased rates, which supported overall earnings along with growth in rate base across our Alberta utilities. Our results underscore the strength of ATCO's standalone businesses, which continue to deliver strong year-over-year earnings growth.

[Katie Patrick, EVP and Chief Financial and Investment Officer at ATCO]

Excluding Canadian Utilities, our portfolio generated substantial earnings growth of 15% year-over-year, reflecting the quality of our operations and the consistent execution of our strategy. ATCO Structures & Logistics delivered adjusted earnings of CAD 40 million, up CAD 8 million compared to the same period in 2025. ATCO Structures' earnings growth was driven by the Stibnite Gold Project, along with increased space rentals activity and permanent modular construction sales.

[Katie Patrick, EVP and Chief Financial and Investment Officer at ATCO]

Equally, S&L's results were driven by ATCO Frontec's quick execution of a fully operational temporary base camp for 350 personnel in Resolute Bay, Nunavut. This contract with Defence Construction Canada reiterates Frontec's ability to deliver essential infrastructure in remote northern communities.

[Katie Patrick, EVP and Chief Financial and Investment Officer at ATCO]

Looking at our cash flow, our standalone ATCO businesses reported cash flow from operating activities CAD 109 million in Q3. This increase of CAD 25 million year-over-year is reflective of higher earnings from the Stibnite Gold Project, increased space rentals activity, and higher used fleet sales in ATCO Structures, and the timing of accounts receivable collections.

[Katie Patrick, EVP and Chief Financial and Investment Officer at ATCO]

To summarize, our year-over-year results highlight the strong performance and momentum of ATCO's standalone businesses. Excluding CU, earnings growth remained robust, demonstrating the scale, resilience, and earnings power of our diversified operations. With that, I will pass the call back to Nancy for her closing remarks.

[Nancy Southern, Chair and CEO at ATCO]

Thank you, Katie. Today, ATCO is assessed primarily through its interest in Canadian Utilities, as you all know on the call, which we recognize reduces the visibility into our other businesses' growth, earnings, and investment profiles. This transaction comes at an optimal time, where ATCO shareholders will benefit from exposure to both a pure-play utility and ATCO's other businesses.

[Nancy Southern, Chair and CEO at ATCO]

Following the merger as a standalone company, ATCO's performance and valuation will be more meaningful, and it will be more meaningfully assessed relative to peers in housing, defense, and related industries. This will ultimately provide greater visibility into our assets, their performance, and where we see attractive opportunities to invest.

[Nancy Southern, Chair and CEO at ATCO]

As we engage with shareholders and investors in the months ahead, our focus for new ATCO will follow three key priorities. First, building awareness and understanding amongst investors whose investment interests align with our strategic direction.

[Nancy Southern, Chair and CEO at ATCO]

Second, highlighting the strong performance capabilities and growth potential of ATCO Structures while achieving a market valuation that more accurately reflects its peer group. Finally, enhancing investor understanding of the value, strategic role, and opportunities across the remainder of our portfolio, including our other businesses and investments.

[Nancy Southern, Chair and CEO at ATCO]

The new ATCO will proudly be headquartered in Alberta and will focus on driving growth across all our businesses, building on the relationships and partnerships we've nurtured and forging new ones in the future. This concludes our prepared remarks. I'll now turn the call back to Colin for any questions from our investment community.

[Colin Jackson, SVP of Financial Operations at ATCO]

Thank you, Nancy and Katie. In the interest of time, we ask you to limit yourself to three questions. If you're going to have additional questions, we welcome you to rejoin the queue. I'll now turn it over to Chloe, our conference coordinator, for the questions.

[Operator]

Thank you. We will now begin the question-and-answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys.

[Operator]

To withdraw from the question queue, please press star then two. Once again, anyone on the conference call who wishes to ask a question may press star then one at this time. The first question today comes from John Mould with TD Securities. Please go ahead.

[John Mould, VP of Equity Research at TD Securities]

Hi. Morning, everybody. Thanks for taking my questions. I think I heard three, so I'll try for three instead of a two-part question. Starting with your existing markets for Structures, just wondering how you're thinking about your current manufacturing capacity and its ability to meet the potential growth that you're seeing in the underlying business.

[John Mould, VP of Equity Research at TD Securities]

You just opened an expanded Grimsby, Ontario facility last week. Under what circumstances would you look to add further capacity in any of your existing markets? I'm mostly thinking about on the organic side, but potentially on the M&A side as well, if something was interesting.

[Nancy Southern, Chair and CEO at ATCO]

Thanks, John. Thanks for the question. Yes, definitely. We have a remarkable backlog of manufacturing projects right now. We are assessing actually greater expanded manufacturing capabilities. I will say that comes particularly in the U.S. market today. We have a state-of-the-art factory in Chile that has been a little bit slow, but now with copper prices and the mining of the rare earth materials in South America, Argentina, and particularly in Chile, that factory is starting to actually be at its full capacity today.

[Nancy Southern, Chair and CEO at ATCO]

We do see expansion in manufacturing as the entire world seems to be shifting towards greater access to the mineral resources that are needed for expansion in security, defense, tech, all of those materials.

[John Mould, VP of Equity Research at TD Securities]

Okay, thanks for that. Then maybe secondly, looking beyond your current markets, Europe was topical on the merger call back in October. How should we be thinking about the timing and pacing of potential investments by what we will call new ATCO beyond the current markets? Should we think about those as more so just around the corner or maybe a little longer dated?

[Nancy Southern, Chair and CEO at ATCO]

Well, without getting political, I would hope it is just around the corner. We see a tremendous opportunity for the rebuild in Ukraine. However, given the continued ongoing tension and violence created by the Russian attack on Ukraine, that probably will not occur in the immediate future.

[Nancy Southern, Chair and CEO at ATCO]

However, we are seeing a demand starting to percolate from the adjacent countries in Europe, primarily on the defense side, though, for increased housing and accommodation and facilities in the forward operating bases of those countries. So, it is not right in front of us, but I do not think it is that far away. We need to see the curtailment of the war in Ukraine first to actually have the confidence to be able to go into Europe and adjacent countries to Ukraine.

[John Mould, VP of Equity Research at TD Securities]

Okay. Thank you very much for that color. Then maybe just one last housekeeping question on Frontec. CAD 6 million of adjusted earnings this quarter from, I think, the single Defence Construction Canada contract. Just how should we think about the repeatability of contracts like that in the Frontec business and the longer-term trajectory, the earnings power of this piece of the structures business?

[Nancy Southern, Chair and CEO at ATCO]

A little bit like Ukraine, John, we had expected some of the large announced defense contracts for the forward operating bases in Inuvik, Yellowknife, Iqaluit, and Gander. Those have been delayed as a result of restructuring of the agencies and procurement process coming out of Ottawa and the federal departments.

[Nancy Southern, Chair and CEO at ATCO]

However, we see these as they will be, they're probably imminent in the next, I would say, half year, and we plan to play a very large role in the development of those operations as well as the construction opportunities they'll present.

[John Mould, VP of Equity Research at TD Securities]

Okay. Thank you very much for that color. I'll leave it there.

[Nancy Southern, Chair and CEO at ATCO]

Thanks, John.

[Operator]

The next question comes from Maurice Choy with RBC Capital Markets. Please go ahead.

[Maurice Choy, Energy Infrastructure Analyst at RBC Capital Markets]

Thanks, and good morning, everyone. Maybe I'll start at a very high level on capital allocation. Obviously, the last time we had this call, you mentioned a strong net cash. On this call, you've also mentioned wanting to continue delivering annual dividend increases as ATCO has done so for many decades. Just curious how you view your priorities for your balance sheet, and if you tend to benchmark your dividend policy in New ATCO with your industrial services peers.

[Nancy Southern, Chair and CEO at ATCO]

Good morning, Maurice. Nice to chat with you again. We would expect New ATCO to be in line with the peers in terms of their dividend. Again, it is a very different type of business than the utilities business. We see our businesses in New ATCO as, for the most part, being able to self-fund their new investments. I think you saw Katie's slide on the cash flow in the New ATCO businesses. It is very much a cash. They're both, all of them are cash-driven businesses.

[Nancy Southern, Chair and CEO at ATCO]

We would look to stay in line with our peers in terms of payout ratios and dividends. I certainly would like to see us develop in New ATCO a history of increasing dividends for many years to come as we develop the value and create greater prosperity for the New ATCO shareholders.

[Maurice Choy, Energy Infrastructure Analyst at RBC Capital Markets]

Perfect. That makes sense. My second question, I think in your prepared remarks, you kind of highlighted how the good thing about a spin-off is that it brings into focus some of the assets that perhaps the market had not placed much value on pre-deal. Beyond S&L, I do want to focus on Neltume Ports, actually.

[Maurice Choy, Energy Infrastructure Analyst at RBC Capital Markets]

Thanks for your comments about the Southern Chile port stake and the new JV in Brazil. If I take a very high-level view, can you just update us on what the outlook is for this business? What drives the future growth? What rate of growth do you think New ATCO shareholders can expect in the near term?

[Nancy Southern, Chair and CEO at ATCO]

Maurice, I think what's interesting to me anyway is, since we acquired our 40% position, COVID hit, and we've seen a significant bottlenecking of the supply chain through the traditional trade corridors. The large ports, and when you think of L.A., the large Santiago, or sorry, Valparaíso, the large shipping corridors and the large ports, Vancouver itself, we've heard lots in Canada about the congestion in Vancouver. These large ports are experiencing major congestion issues.

[Nancy Southern, Chair and CEO at ATCO]

What we're actually seeing is that the mid-sized ports, many shippers, both on the supply and demand side, are shifting to the mid-sized ports. We're seeing the opportunities continue to grow on our ability to increase capacity in terms of volumes, efficiencies within those mid-sized ports. Everybody recognizes that there's only so much access or land associated with water.

[Nancy Southern, Chair and CEO at ATCO]

It is hard to find new areas to develop a brand-new port, which is why we are really excited about Rio Grande and Neltume Ports in the future. However, we do see, and we are seeing additional opportunities for expansion in our existing mid-size ports, and this volume acceleration, especially on the bulk side, containers as well, but primarily on the bulk side.

[Nancy Southern, Chair and CEO at ATCO]

Copper, copper concentrate, minerals, coal even, and the potash is what is really, or soda ash, excuse me, is what is really driving the expansion that we are seeing already, even though the port has not even been commissioned yet in Vancouver, Washington State. Does that answer that?

[Maurice Choy, Energy Infrastructure Analyst at RBC Capital Markets]

Yep, it does. Definitely excited for the volume acceleration. If I could just finish off with one, and given the theme of elections this entire week and many conference calls I have been on, you have always said that U.S. for Structures is the largest growth market for you in the near term. Just curious if you anticipate the results earlier this week to offer perhaps a different pace of opportunities for you.

[Nancy Southern, Chair and CEO at ATCO]

I actually think the momentum in the United States probably won't shift, even regarding the midterms, or with the results of the midterms regarding defense and security. There may be a little tempering of the pace of growth on the defense side, but many of the contracts that we are seeing coming out of the United States are related to defense contracts.

[Nancy Southern, Chair and CEO at ATCO]

So improvements in camps, but primarily miners that are looking to actually provide, based on local sourcing out of the U.S., the critical minerals required for ammunitions, armaments, uniforms, all of those things, Kevlar, night goggles, all those things in the Made in America approach. I don't think that is going to change that much, which is why we are actually looking at the U.S. as one of our first manufacturing expansion areas. We are seeing really good opportunities and good growth in that market.

[Maurice Choy, Energy Infrastructure Analyst at RBC Capital Markets]

Perfect. Looking forward to that and see how this all evolves. Thank you very much.

[Nancy Southern, Chair and CEO at ATCO]

Thanks, Maurice.

[Operator]

Once again, if you have a question, please press star then one. The next question comes from Patrick Kenny with National Bank Financial. Please go ahead.

[Patrick Kenny, Managing Director of Energy Infrastructure at National Bank Financial]

Thank you. Good morning, everyone. Nancy, not sure if you and your team have had a chance to digest all the details of the federal budget yesterday, but I was just curious if you saw anything in there that stood out to you, either on the defense spending side or the housing affordability agenda, or otherwise that you think might help accelerate a few new contracts or expansion opportunities across the country?

[Nancy Southern, Chair and CEO at ATCO]

I have to confess, I haven't had a chance to truly digest. I've looked at the major headline topics. I think the budget is very positive for all of our businesses, including the CU Emera merger and our defense side. Again, the impetus and incentives and tax-adjusted structures that have been announced in the budget should propel a faster pace in Canada for all aspects of energy, mining, and defense opportunities. I was quite optimistic about the headlines that I looked at from coming out of the budget. I don't see anything that is a deterrent, that's for sure.

[Patrick Kenny, Managing Director of Energy Infrastructure at National Bank Financial]

Got it. Okay, thank you. Just on the renewed outlook for British Columbia, not to get political here either, but just on the LNG front, maybe you can provide an update on your outlook for reallocating units to support the LNG Canada phase two expansion, as well any discussions, preliminary discussions you might be having to support the multi-year construction of the Pacific Link pipeline.

[Nancy Southern, Chair and CEO at ATCO]

Both of those are on the radar. The other one that, I do think that the new government in British Columbia will also support greater exploration and production in the northeast corner of British Columbia, which also would suggest that we've got some opportunities on the infrastructure required there. I think in terms of drilling camps, that sort of thing, the pipeline will require much of the same activity from our Structures business that Trans Mountain did.

[Nancy Southern, Chair and CEO at ATCO]

LNG Canada is a little different situation because we built that original camp as a permanent camp, including for the expansion. There are opportunities for some additional more rental-type units for the expansion at LNG Canada. But the one that we're really interested in looking at, and we're actually talking with, is the Alaska LNG project. That is a huge LNG project.

[Nancy Southern, Chair and CEO at ATCO]

I'm not sure it's necessarily on anyone else's radar, but they're looking for 8,000 beds for that project. They've had some delays in their permitting and access, but that's something that we're definitely keeping our eyes on.

[Patrick Kenny, Managing Director of Energy Infrastructure at National Bank Financial]

Okay, that's great. Thanks for that. Lastly, I'm glad you brought up the Alaska and the North, but as it relates to Frontec, I'm just curious, with the increasing demand for services and contracts up north, does that provide a commercial opportunity to perhaps reset pricing or increase margins from your economies of scale? I was just curious how material this could be in terms of financial upside for the consolidated business over the coming quarters, coming years.

[Nancy Southern, Chair and CEO at ATCO]

Yes, I believe that there is going to be a scarcity of resources to address the scarcity of infrastructure, which includes housing, energy, access, transportation in the Arctic. As a result, one would think, yes, you would be able to increase your margins. I think the corollary of that is, we are starting to see a real labor shortage.

[Nancy Southern, Chair and CEO at ATCO]

As the majority of these projects really get underway, I can tell you, in Alberta today, I am aware, that's a leading indicator in my mind for the labor situation in Alberta, B.C., and looking to the North. It's a very sparse population across our Arctic. Whilst I saw that the numbers on employment are not- They're trending in the wrong direction right now.

[Nancy Southern, Chair and CEO at ATCO]

It's not necessarily the technical requirements for the labor required for the Arctic isn't necessarily coming from the pool that has lost jobs in this past month. I think that there's going to be a balancing. Yes, there's going to be a scarcity of resources available to build out what we're trying to build out, and so you will see margins go up, but you're also going to see the cost side go up with labor.

[Patrick Kenny, Managing Director of Energy Infrastructure at National Bank Financial]

Okay. Thanks, Nancy. I really appreciate all the color.

[Nancy Southern, Chair and CEO at ATCO]

Thank you.

[Operator]

This concludes the question and-

[Nancy Southern, Chair and CEO at ATCO]

You are welcome.

[Operator]

I am sorry. This concludes the question and answer session. I would like to turn the conference back over to Mr. Colin Jackson for any closing remarks.

[Colin Jackson, SVP of Financial Operations at ATCO]

Thank you, Chloe, and thank all of you for participating today. We appreciate your interest in ATCO, and we look forward to speaking with you again soon.

[Operator]

This brings to a close today's conference call. You may now disconnect your lines. Thank you for participating, and have a pleasant day.

Participants

Executives

• Colin Jackson, SVP of Financial Operations
• Nancy Southern, Chair and CEO
• Katie Patrick, EVP and Chief Financial and Investment Officer

Analysts

• John Mould, VP of Equity Research at TD Securities
• Maurice Choy, Energy Infrastructure Analyst at RBC Capital Markets
• Patrick Kenny, Managing Director of Energy Infrastructure at National Bank Financial