Aegion's Unit To Rehabilitate Michigan's Wastewater Pipelines
Zacks Investment Research | Sep 24, 2019 11:07PM ET
Aegion Corporation’s (NASDAQ:AEGN) subsidiary, Insituform Technologies, LLC (“Insituform”) has inked a $9.1-million deal to renovate Michigan’s wastewater pipelines that are approximately 11,000 feet and 30- to 72-inch in diameter.
Per the contract, the company will also rehabilitate sewer siphons, manholes, siphon chambers and a junction chamber. The project is likely to begin in October 2019 and will be completed by the end of 2020.
Solid Rehabilitation Projects to Aid Top Line
Since 1971, Aegion has maintained its market leadership position in the remediation of wastewater pipelines in North America using the CIPP technology.
Over the past 10 years, the company’s Infrastructure Solutions business has completed several large wastewater pipeline projects within the city. The business — which accounted for 48.8% of second-quarter 2019 revenues — is the largest contributor to top-line growth and remains committed to maintain its market leadership position in the rehabilitation of pipelines.
Aegion’s Insituform CIPP is a trenchless, jointless and seamless pipe-within-a-pipe solution that is used to rehabilitate pipes of numerous diameters. Notably, the Insituform CIPP is the first trenchless technology for renovating wastewater pipelines without making extreme expense and disruption, replacing the conventional “dig-and-replace” methods. The CIPP technology is the largest contributor to the segment’s top-line growth.
Notably, the company’s second-quarter 2019 adjusted earnings grew 9% year over year, despite a 4.9% decrease in consolidated revenues. The upside mainly stemmed from strong Infrastructure Solutions business, and significant top and bottom-line growth from Energy Services.
This market leader in the rehabilitation of wastewater pipelines in North America expects a modest improvement in adjusted EPS for the current year on the back of its strong backlog position and market outlook for core businesses. Particularly in the Infrastructure Solutions business, it predicts revenue growth to be 2-4% after adjusting for the effect of exited or to-be-exited operations, supported by estimated improvements in crew productivity and project mix within North America CIPP.
Notably, Aegion’s shares have gained 26.1% in the past six months compared with its Original post
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