Good morning, ladies and gentlemen. Welcome to the North American Construction Group Conference Call regarding the second quarter ended June 30, 2025. The company wishes to confirm that today's comments contain forward-looking information and that actual results could differ materially from a conclusion, forecast or projection contained in that forward-looking information. Certain material factors or assumptions were applied in drawing conclusions or in making forecasts or projections that are reflected in the forward-looking information. Additional information about those material factors is contained in the company's most recent management's discussion and analysis, which is available on SEDAR and EDGAR as well as on the company's website at nacg.ca. I'll now turn the conference over to Mr. Jason Veenstra. Thank you. Please go ahead.

Thanks, Gina, and good morning, everyone. A bit of a change today as I'll start off right away with the financials and pass the call to Joe for the operational and outlook commentary. Starting on Slide 4, the headline EBITDA number of $80 million and the correlated 21.6% margin were impacted primarily by three distinct challenges in the quarter. First, based on the strong growth in Australia, we were required to incur higher-than-expected maintenance costs on subcontractor labor. The ramp-up curve in Australia has resulted in a lag in recruitment of our critical heavy equipment technician personnel, and resulting contractor costs incurred higher expenses in the quarter. Second, an abrupt stop to work in April in the oil sands region resulted in higher operational and overhead costs due to the inefficiencies associated with unplanned outages. NACG has been working in the oil sands for decades, and we understand the need to be agile. But the inconsistency experienced this quarter was abnormal and resulted in us incurring costs we normally could avoid through routine mine planning and resourcing. And thirdly, although the project team and workforce at Fargo progressed the project extremely well, they had an eventful corporate quarter as a settlement with the authority and the finalization of an updated detailed plan to completion led to a significant margin adjustment in the quarter. For those familiar with project management, adjusting margins even slightly for a project that is 70% complete can be material. Excluding these items, EBITDA would have been well above $100 million and at our typical margin profile of around 27% to 28%. These three challenges drove the financial results for the quarter but have been mitigated and addressed, as Joe will describe in his prepared remarks. We included a comment here about our steady revenue growth as we posted $371 million of combined revenue, which is a 12% increase from last Q2. Australia, in particular, continues to impress with its consistent growth trajectory, being up 7% from the first quarter of 2025 and 14% from last Q2. When we look back on Australia, the revenue of $168 million that we generated this quarter is more than double since the second quarter of 2022, which was $81 million on a pro forma basis. The MacKellar Group generated almost $60 million in June alone and set another company record for monthly revenue. June's strong top line bodes well heading into the second half of 2025, and this growth rate is indicative of the demand we see in Australia. Moving to Slide 5 and our combined revenue and gross profit. Australia was up $21 million on a strong quarter, which benefited from growth capital being commissioned and fairly stable operating conditions. Equipment utilization in that region of 76% was strong, but was slightly held back from rainy conditions in April that carried over from Q1. This top line positive variance was further bolstered by higher revenue quarter-over-quarter in the oil sands region, which compares favorably to last year's Q2, but was significantly impacted by inconsistent demand primarily in April. Our share of revenue generated in the first quarter by joint ventures was down $4 million from last year, primarily due to lower scopes being completed within the Nuna Group of Companies. Fargo was consistent quarter-over-quarter, but that consistency factored in an approximate $8 million reduction in recognized revenue based on the updated project plan. Excluding that one-time entry, Fargo scopes completed in the quarter were approximately 30% higher than that of Q2 2024. Combined gross profit margin of 10.7% was impacted approximately 8% by the three factors previously mentioned: subcontractor costs in Australia, operational and overhead costs in Canada from unplanned stoppages and the Fargo settlement and updated project plan. Less prominent impacts included the continuation from Q1 into April of the rainy weather in Australia and early failures of certain components in our heavy equipment fleet in Canada. Moving to Slide 6, Q2 EBITDA and EBIT were down from their 2024 comparables as discussed. The 21.6% margin we achieved is not indicative of where we see our business operating at and is well below the 28% run rate we've been on since the acquisition of the MacKellar Group. Included in EBITDA are direct general and administrative expenses of $12 million, which is equivalent to 3.6% of reported revenue, which is below the 4% target we've set for ourselves. Going from EBITDA to EBIT, we again expensed depreciation equivalent to approximately 16% of combined revenue, which is higher than the 13% posted in 2024 Q2 and reflects the component issues we are experiencing in Canada. Again, this 16% is higher than our expected run rate moving forward, given historically, we've been between 13% and 14%. Adjusted earnings per share for the quarter came in at $0.02, reflecting the significant bottom line impact of the challenges we faced with interest expense identical to last year and tax rates consistent as well. The average cash interest rate for Q2 was 6.4%. Moving to Slide 7, I'll briefly summarize our cash flow. Net cash provided by operations prior to working capital of $64 million was generated by the business, reflecting EBITDA performance net of cash interest paid. Free cash flow was neutral for the quarter based on sustaining capital spending. Moving to Slide 8. Net debt levels ended the quarter at $897 million, an increase of $29 million in the quarter as growth spending required debt financing. Net debt and senior secured debt leverage ended at 2.2x and 1.5x, respectively. With those brief comments, I'll pass the call to Joe.

Thanks, Jason. Good morning, everyone. I'm going to start with a brief overview of our Q2 2025 operational performance and then I'll conclude with our second half outlook, growth opportunities in Australia and the infrastructure markets and our expanding bid pipeline before taking your questions. On Slide 10, our Q2 trailing 12-month total recordable rate of 0.42 remains better than our industry-leading target frequency of 0.5. We continue to advance our systems and training with key focus on increasing high-risk task awareness and serious accident prevention. A lot of people in our business claim safety as part of their core beliefs and culture. But when you look at their history, their promises don't match the facts. Unlike others, NACG can demonstrate 10 years of industry-leading results from 2016 to now while showing simultaneously increasing exposure hours by more than 4 times. Importantly, for investors, these facts readily show our customers what a strong safety culture looks like and differentiate us from our competitors. This translates to contract wins, lower downtime, higher revenue and lower costs. Moving to Slide 11. I want to highlight some of the major achievements of Q2. The trailing 12-month revenue set another company record with Australia leading the way and continuing an impressive 3-year growth rate of 28%. Just as impressive, if not more so, our business in Australia is growing at that rate and continues to improve on fleet utilization. Our Fargo flood diversion project, a highlight for our diversification efforts, enters the last year of major construction and remains on track for scheduled completion and handover to operations and maintenance teams. Soon, Fargo and the surrounding communities will have flood protection in place to quell those annual spring fears. Our disciplined management approach kept administrative costs at 3.6%, showcasing our ability to grow and support top line revenue without adding to our overheads. Our ability to handle large civil infrastructure projects with the same operational and financial success is the key to our expansion in this segment. On the corporate front, we won the biggest contract in company history last week, shortly after our Q2 close, which drove record backlog and continued our trend of 100% renewal rate in Australia. Continuing another Australian trend, this contract renewal was achieved more than 2 years before the previous contract expiration. On the topic of renewals in the U.S., we also renewed our Texas thermal coal mine management contract out to 2028. Lastly, on the financial front, we completed a $225 million offering of senior unsecured notes, providing liquidity for future growth opportunities. We ended Q2 with what I believe are 2 critical additions to our senior team. We've hired a VP of Asset Management and a VP of Infrastructure and Growth. Stuart and Melanie are industry tops in their respective fields and will play major roles in leading our growth and diversification strategies. I expect to be sharing their accomplishments with you frequently in the coming quarters. On Slide 12, we've combined the Australian and Canadian fleets to form a global utilization rate as measuring our global utilization becomes more and more important to our decision-making. A 75-25 Australian to Canada weighting was chosen as it's roughly proportionate to our respective earnings expectations. Despite our Q2 setbacks, our global utilization rate is trending up and our continued prudent fleet management is expected to deliver utilization in the second half of the year in our target range of 75% to 80%. Moving on to our outlook. For the remainder of the year, Slide 14 highlights the 3 steps which are mainly cost related that bridge our Q2 EBITDA margin results to our H2 expectations. To start, the cargo settlement that is now behind us is onetime in nature, and we have high confidence in the forecast and estimated to complete as we have thoroughly reviewed the forecast as have our other partners. In Australia, we expect lower costs as we reduce our reliance on contracted skilled trades. And importantly, we're ahead of schedule on those reductions through July. And lastly, in our Oil Sands business, we expect more consistent operations as our customers have no planned plant outages in the second half of the year, which has historically lower weather exposure. On Slide 15, we provided our outlook for the second half of 2025 and highlighted any variance to previous H2 expectations. As I said in my letter to shareholders, we remain confident in delivering second half year results consistent with our original expectations aside from our Oil Sands business. Although these oil sands changes negatively impact our second half EBITDA and EPS, the unchanged combined revenue and free cash flow expectation reaffirms a strong finish to the year and sets us up to be back on historical growth trends for 2026. On Slide 16, we highlight why our long-term growth targets remain intact with anticipated organic revenue growth of 5% to 10% annually, underpinned by ongoing Australian growth, new infrastructure projects, which I'll detail further on the next slide, and new mining projects and opportunities to displace higher-cost contractors in Australia and Canada that will further enhance fleet utilization and operational diversification. On Slide 17, we detail the growing civil infrastructure opportunities in North America. Aging infrastructure, energy transition, climate resiliency, and tariff threats pushing nations to seek more resource independence, all fueled by federal stimulus are driving what we believe is a vastly growing opportunity in the civil infrastructure markets, with spending uptick kicking off in 2026. This infrastructure growth is coming off a major previous uptick in 2023 and positions us well to support major general contractors who are at capacity as either a partner or a subcontractor. We expect to have secured 2 strong project teams to pursue our top 10 projects before year-end and maintain our plans to increase infrastructure to around 25% of our overall business by 2028. As I mentioned earlier, our VP of Infrastructure Growth is now in place. And although she has only been with us a bit over a month, she has hit the ground running and has already shown the skills and tenacity to fit right in at NACG. This gives me confidence in our ability to achieve our infrastructure goals. Slide 18 highlights a strong bid pipeline, including our top 20 infrastructure projects totaling around $2 billion. The significant blue spot in the middle is now gone as that is the $2 billion contracted win at the Queensland Coal mine we announced last week. The remainder of the bid pipeline remains essentially unchanged as no other significant bids in active procurement have been awarded. Although not a sizable enough project to warrant a press release, it should also be noted that our mine management contract extension at the Texas coal mine never entered the bid pipeline, and we were able to negotiate that extension directly with our customer. Lastly, regarding capital allocation going forward, we have been active in our NCIB having purchased and canceled around 680,000 shares since inception to quarter end, demonstrating our commitment to shareholder-focused allocation. We have increased liquidity with our high-yield grade and an expected midpoint of $100 million in free cash flow for the second half of the year, which gives us confidence to continue investing in shareholder-friendly ways, provides us funds should we need to settle our remaining convertible debt with cash, which is now a current liability due the end of Q1 2026, and provides additional funding should we need letters of credit for future infrastructure bids or find other high-return investment opportunities. In summary, while Q2 was not an easy time for us, we're looking forward to a strong back half of the year and are excited to share more operational updates with you as we move towards the end of the year. With that, I'll open up for any questions you may have.

Your first question comes from Aaron MacNeil from TD Cowen.

Jason, you sort of alluded to it in the prepared remarks. I'm hoping you can help us a bit with sort of future free cash flow generation. I know there's no guidance out for 2026 yet. But I'm hoping you can just quantify the challenges this year, including the Fargo settlement, the margins in Australia and Canada, at least to the extent that you don't expect them to recur next year. And then just give us a sense of what you expect will be the big moving pieces on free cash flow generation. I'm thinking about, again, Australian margins, sustaining growth capital or anything else you think is relevant? And again, like not to put too fine a point on it, I just want to think about sort of the moving pieces there and if you can give any visibility to an improvement in free cash flow in '26.

Yes. As far as it relates to the second half, we see about a $20 million working capital improvement in the second half from collections that slipped from June into July. So that reconciles the reduction in EBITDA, but the consistency in free cash flow. And as far as the first half goes, the EBITDA difference from expectation to actual fell to free cash flow essentially. So CapEx came in slightly higher than expectation, about $10 million higher, but the primary driver of the free cash flow difference is the difference in EBITDA. Joint Venture, the Fargo settlement, and the $8 million impact, we do collect from Fargo on a percentage of completion basis. So that has an impact on free cash flow as well. So essentially, the EBITDA impact does fall to free cash flow for the first half.

I'm considering 2026. To be precise, sustaining capital and growth capital are higher. Should we use this year's run rate as a reference for next year?

No, we would expect 2026 sustaining CapEx range to be the $180 million to $200 million that we had for this year. Some of the component issues we experienced in Canada were driving that overage, and we don't expect those to happen again in 2026. So we would expect a similar free cash flow target, call it, $130 million to $150 million for 2026 when we guide in October.

Got it. And then, Joe, one for you. I'm just looking at not the Q2 presentation, but the August investor presentation that just hit your website. You speak to 15% Australia growth in 2024, 25% in 2025 and then a consolidated long-term growth rate of 5% to 10%. So I can realize that's a top line target. But how is the Australian labor strategy evolving? And what do you think is a practical sort of ceiling on your potential revenue growth in Australia before you start to get into the negative margin outcomes that we saw with Q2?

I think managing a 5% to 10% growth rate is very reasonable. Obviously, we've had a bit higher than that. We also started the copper mine up in New South Wales. That wasn't an area we had been operating in previously. This skilled trade is an issue that always rears its head in our business at certain times. We react to it fairly quickly. I think we've been through this before. They're reoccurring items, and we've addressed it. I feel very comfortable that we've worked our way out of this in the second half of the year there. Like I said, I think we already had a good head start on it in July. And then at a lower growth rate, it's much easier to manage. The higher the growth rate in any particular area, the more pressure it puts on hard-to-get trades like that.

And your next question comes from the line of Kevin Gainey from Thompson Davis.

It's Kevin on for Adam. Despite the shutdown, revenue growth in Canada was still strong, I think about 20% year-over-year. Would revenue have been even stronger without the shutdown? Or did the shutdown impact costs more than the sales?

The revenue was directly affected by the inefficiencies caused by abrupt shutdowns, which require time and resources for re-hiring and managing overhead costs. It's important to avoid laying off the entire workforce only to bring them back after a few weeks. These were indeed direct impacts, but we don't anticipate this situation recurring as it was mainly linked to the timing of a significant turnaround at their plant.

Do you guys think that turnaround was just a one-time off turnaround or that oil sands will be smoother in H2?

They generally do those about every 3 or 4 years, but we actually met with them in early May and had discussions on what those impacts were to us and how it negatively impacted them. I think we've got a good understanding and relationship that hopefully, the next one that happens, be it 3 years down the road or whatever, we've got plans in place to schedule around it where you don't have an abrupt shutdown of work and then bring it back online. So that's very expensive and creates issues across the board, operationally, safety, and cost. We've had those discussions, and I think our clients understand it. It was an unfortunate situation in Q2. Hopefully, we can plan our way around it in the future.

I appreciate the color on that. And then maybe for you, Jason, on the guidance, how are you guys looking at Q3 versus Q4? Are you expecting strong results in Q4 or Q3? Or should they look relatively similar from an EBITDA standpoint?

Yes, there are some puts and takes, but it's basically flat quarter-over-quarter with Fargo being a little stronger in Q3, but Australia going to be stronger in Q4. So it works out to pretty much equal quarters from an EBITDA and EPS perspective.

And your next question comes from the line of Prem Kumar.

I have a couple of questions, so please be patient with me. My first question is regarding any changes to your OEM partnerships. You mentioned in the letter about expanding your partnership with OEM and dealer networks. Can you explain what those changes involve? Also, have there been any alterations to your physical network in Fort Mac over the last quarter related to these partnerships?

Yes. I think this was something we transitioned to last year, a partnership with our Caterpillar dealer in the component remanufacturing side for a certain portion of our components. That's gone very well. The driver for switching to that was based on the component issues we were having last year. We've had some lesser component issues that Jason mentioned. Those were actually in some of the OEM products. They weren't the same components that we're talking about last year. We do have a very positive response from our dealer. And right now, it's basically making sure parts are available and on the shelf for any issues and then troubleshooting that to prevent reoccurrence. Those partnerships are very strong for us with our major Caterpillar dealer.

Okay. And so no changes to your existing footprint in Fort Mac other than this partnership with OEMs?

Yes. We have the same relationships with clients and our equipment dealers that we've had in the past.

Okay. And then can you please expand on the contract labor issues in Australia? I was a little surprised that, I guess, based on your commentary from the past where you mentioned you've seen growth in Australia, I was kind of hoping you would be prepared for the exceptional growth in Australia. So the labor issue took me by surprise. Could you please expand on that?

Yes. For the 40 years I've been in the industry, certain skilled trades are always difficult. With us, it's heavy equipment technicians. We've built systems around how we increase and develop our own mechanics. But when you have a very high growth rate, you go into new areas like we did in Australia, it's often difficult to find those guys, and we react very quickly. It's not an unusual event in that industry; it's one we learn to react to. It's much easier when you're on a 5% or 10% growth rate than when you're on a 20% to 30% growth rate. It's not something we're ill-prepared for; it's just harder to do with that kind of growth than with a lower rate of growth. Our HR team is focused on how we develop and access those people faster when we need them for rapid growth. We'll be addressing this consistently.

Okay. And then on your contract backlog, any concerns about having like around 50% of the backlog coming from one site, I think, in Australia?

I think that's our biggest client right now, and we've signed a 5-year term. So it's fresh in the books. It’s the timing of things. When we get 2 years in on that contract, something else will be on the top, hopefully, a big infrastructure project is my expectation. At this point, just because we were only awarded that contract a week ago, it sits that high in the backlog percentages. As we advance and renew and win others, you'll see that percentage drop. So no, it doesn't worry me.

Okay. I have just 2 more, and I apologize for asking quite a few questions today.

You get to the bonus round, Prem.

I would like to know how the prospects in infrastructure work are developing. You mentioned hiring a new Head of Infrastructure and a VP. Can you elaborate on the progress of building the team and your current status in that process?

Yes. If you look at that slide on infrastructure, it lists our top 10 projects. We're seeing a significant increase in infrastructure projects that fit our wheelhouse, which are ones that have major earthworks. We're seeing it across Canada and the U.S. Additionally, we're seeing opportunities for pumped hydro and climate resiliency projects where areas that used to flood every 20 years are now flooding every 4 years, leading to flood diversions being built. We see great opportunities for building access infrastructure in remote areas. The project list contains many opportunities with earthwork, where we historically never saw this level. We currently are putting together project teams and will look for partners similar to those we have at Fargo. We expect to have secured at least 2 project team partnerships by the end of the year, maintaining our goal to have infrastructure account for around 25% of our overall business by 2028.

Okay. I'll ask my last question. Regarding free cash flow, Jason mentioned that for next year, normalized free cash flow would be about $120 million to $150 million. In your previous presentations, the guidance for the Canadian division was around $100 million to $115 million in free cash flow, and then came the MacKellar acquisition. I'm a bit surprised that your combined normalized free cash flow for next year is almost as close to the upper guidance for just the Canadian division from about 1.5 to 2 years ago. Additionally, considering that over the last 12 months, you've had free cash flow of $20 million for a company with a replaceable asset value of over $4 billion, that seems like pretty poor returns for a high $4 billion asset. Can you provide more information about free cash flow? What is the team doing to improve that? And does the team share the view that free cash flow is currently low?

Absolutely. We think it's low, but we see it coming back to that midpoint of $100 million over the next 6 months. There's a lot more questions in that than I can answer. But yes, we're very confident in our free cash flow projections and the growth expected, returning to normal levels in 2026.

And your next question comes from the line of Sean Jack from Raymond James.

Just wanted to ask one question on Australia. I was just wondering how we should be thinking about gross margin moving into the back half here. It seems like efforts have definitely been taken to mitigate the skilled trade issues. But are we going to be looking at a more gradual improvement, kind of a step change in the third quarter? Any color would be great.

I don't know what the number was. Jason will have to answer that, but we expect to be back to what we originally projected in our original guidance.

Yes. So we're aiming for low 20% for gross profit margin, Sean. As Joe mentioned in his prepared remarks, the subcontractor issue is resolving quickly. We got through most of it in July. We expect to see a percentage increase in Q4 over Q3. But yes, low 20% is the expectation for Australia.

Okay. Perfect. One more for me. So you guys also just talked about putting the project teams together on the infrastructure side and getting the right people in place. Wondering if you guys have any visibility on what that sort of bid pipeline looks like right now from a timing perspective? How early could investors realistically see new projects from the infrastructure side coming into the fold?

There are some that are on very fast tracks. Additionally, we're looking at ones that we may not be part of as a bid team but can look at from a subcontractor standpoint. Those opportunities could be as early as summer of 2026. Most of the others where you're bidding as a team, a design-build kind of thing, are probably more out into the 2027 standpoint. If you look at the bid pipeline, those light blue dots in the very bottom line are where those projects are expected to start, but some are starting with just engineering and design, and construction could be out further. So you could win a project in 2026, but it might just be engineering and design, with construction starting in 2027. There is some opportunity for 2026, but I think the biggest ones will be in 2027.

And your next question comes from the line of Kazim Naqvi from National Bank Financial.

Kazim here on for Maxim. Just most of the questions have been asked. I just was wondering what the JV forecast adjustment for Fargo means for the future profitability of that JV. Do you guys expect it to be profitable for the year? And what should we expect going forward for 2026?

Yes. That change is made for the end result of the project. So yes, we expect to maintain that margin, hopefully improve upon it. We're very confident where that margin sits. We reviewed that forecast. This was also part of the overall agreement we made with the authority that settled all the old claims. So we don't have anything hanging over us from the past now, and we're just looking forward to completing it. We're in the last quartile of that work and expect to hand it over to operations and maintenance at the end of next construction season next year.

And I think you already touched upon this about the Australian labor issues. But should we assume that this will not continue into 2026? Or is this the new steady state margin given that labor costs have gone up?

No, we wouldn't expect this in 2026. It's cyclical, and skilled trades are always an issue in our industry. They just come up. It puts more pressure on you when you have a high growth rate. Adapting and building our own development processes in HR, we've demonstrated this in the past. We felt these pressures before, and we know how to deal with it. So I don't expect this to reoccur in 2026.

And your next question comes from the line of Christopher Thompson from Bank of Commerce.

Yes, I'll start on the guidance for the Oil Sands. It looks like you lowered your margin expectation there for H2. But I'm a bit confused because I was under the impression that the Q2 turnaround activity was really the cause of that impact this quarter and that that was behind us. But it feels like that may not be the case. How should we think about that for 2026 margins in the Oil Sands?

That is behind us. But I do think we had some issues with some components, some different components. We have lower revenue projections in the second half; we always have. So there's not the same efficiency, and these component issues, which we've rectified as far as the impact on us operationally. Our dealers have responded by putting parts on the shelf. But it's probably another 6 months before we get the solutions in place to prevent reoccurrence. I wouldn't expect that to continue into 2026. I expect we're back to normal margins, very similar to what we started the year with as far as our expectations.

Okay. So the impact for H2 margin, Joe, is purely parts related?

We have lower revenue per month, if you would, than we did in H1. And there's a little bit of loss of efficiency and overhead in that. But there are also some component-related issues, and they are different from what we had last year. We have the OEMs involved in this, where previous ones were actually partnerships we had to work with OEMs or OEM dealers. They've already reacted. We have what we would call Stage 1, which is containment of an issue, and then we're going to resolve to prevent it and put a solution in place, and they are actively working on that with our team.

Okay. And then piggybacking on the Oil Sands contract that you won in late 2024, the committed spend was $500 million. You had expected that to represent 1/3 of the total work to be performed across the mine site. How much of that $500 million committed spend have you already worked through? And how confident are you in that 1/3 assumption that you originally went in with?

I'm confident in the 1/3 as far as the amount of work that gets done every year, and the amount that comes at backlog at any one time. The commitment to us from their side is the same as our commitment to them. I don't think the backlog burn changes the total amount of revenue we do with those clients. I don't know, Jason, what's the number we've gone through, $150 million or so.

Yes.

So somewhere in that $150 million to $200 million range. I talked about it before; the backlog will probably consume faster. We're looking at that as a good opportunity going forward to discuss with our clients about increasing those commitments over these 4 years.

And then in terms of addressing the volatility you've experienced with your oil sands work, is there a way to shift the way these contracts are structured to help guard against this volatility? What's the long-term solution to manage the amount of volatility we've seen in that contract?

For us, it's really maintaining a good open relationship with our clients so that we can communicate and plan together. That didn't occur in this instance very well. We had discussions afterwards, and I think we've reset that. From a contracting standpoint, it's for contractors to get more leverage when we have higher demand than supply, which allows us to strengthen our terms and conditions. It's just a matter of where that sits in the market at the time, like any other contracting business.

Okay. And then just last one on the Oil Sands. Slide 23, you highlighted the replacement value of the fleet overall. Can you break out for us what the replacement value is for your Oil Sands fleet?

Yes, I'm sure Jason could get that to you, Chris. I don't know if he knows it off the top of his head, but...

Sure. No problem. Okay, and then lastly, just on Australia. When I look back at 2023, gross profit margins were pretty strong, like mid-20s to low 30s. Now for H2 '25, we're talking about low 20s. So I'm just wondering what's changed in the business that has seen that margin shrink over time?

I don't have the exact bridge for you. I know what the difference is. We've expanded some of those marketplaces and added maintenance labor. The mix of work has changed, and it impacts margins. Your highest margin comes from doing a straight dry rental. If you just rent a truck, it has the highest margins. If you rent that truck and provide maintenance for it and the labor, the margins on labor aren't as high. So it's really just a mix of work and not the same work having reduced margins.

And your next question comes from the line of Kevin Gainey from Thompson, Davis.

I just wanted to ask, has there been any thought or continuation of thought on moving more heavy equipment from Canada to Australia?

Absolutely. We've moved some small pieces. Actually, we've got 4 more trucks we're shipping over there right now. It's not a huge amount of gear. If you look at the bid pipeline, and you'll see a big blue dot on the top row, it’s in 2027. That’s probably our biggest opportunity to move a substantial amount of fleet that isn’t currently committed in Canada. We’re still moving a few pieces here and there, and we're bidding other work outside of Oil Sands that we look to use to increase our utilization of our smaller end fleet. Oil Sands demand is still very strong, and we see this business staying at that revenue level for years to come. We will look to take our fleet and rightsize it to maximize our utilization and return. Those opportunities like the big blue dot in 2027 represent our biggest prospects. We see more of them coming up, actually.

You guys wouldn't preemptively move it; you would wait until you win the contract?

Yes. They're very high cost to move equipment, and it takes a significant amount of time to get it overseas. So no, we’d have to win a contract 6 months to 8 months prior to shipping the fleet. It takes about roughly 6 months between teardown, transport, and setup. We've moved 30-odd pieces to date, so we're pretty familiar with that process. We expect to win that big blue dot starting in 2027, probably by mid-2026, which would give us time to move equipment over.

I appreciate the color. And then maybe just quickly on Nuna. What's the outlook for revenue at Nuna going forward?

I think it's pretty modest this year, but it's on plan. There are real big opportunities coming up on the infrastructure side, which we will probably partner with them on in some of these northern projects. For example, if you're familiar with the Grays Bay Arctic port and some of the jobs at Baffinland iron mines, those are all in Nunavut and Kitikmeot territory, particularly for Grays Bay, and we see great opportunities for them and for Nuna. We're starting to see more mines getting permitted and expanded. That process is generally slow. This year was always anticipated to be a trough year for Nuna, given how the industry dollars were expected to be spent. From 2026 onwards, there are great opportunities for them to continue to grow.

This concludes the Q&A section of the call. I will pass the call over to Joe Lambert, President and CEO, for closing remarks.

Thanks again, everyone, for joining us today. We look forward to providing the next update upon our closing of our third quarter next time.