Toronto, Ontario--(Newsfile Corp. - August 14, 2026) - STRACON Group Holding Inc. (TSX: STG) (BVL: STG) ("STRACON" or the "Company") today reported its financial results for the three-month and six-month periods ended June 30, 2026. The Company's unaudited interim condensed consolidated financial statements and Management's Discussion and Analysis ("MD&A") are available under the Company's profile on SEDAR+ at www.sedarplus.ca.
Second Quarter 2026 Highlights
- Revenue of US$208.3 million, an increase of 6.5% over the second quarter of 2025.
- Gross profit of US$24.0 million, an increase of 23.0% over the second quarter of 2025.
- Profit of US$3.4 million, compared with a loss of US$1.5 million in the second quarter of 2025.
Financial Highlights
| In thousands of US dollars (unless noted) | Q2 2026 | Q2 2025 | Change |
| STATEMENT OF PROFIT AND LOSS AND COMPREHENSIVE INCOME | |||
| Revenue from contracts with customers | 208,297 | 195,638 | +6% |
| Gross profit | 23,970 | 19,488 | +23% |
| Profit (loss) | 3,375 | (1,465) | n/m |
| Basic and diluted earnings per share | 0.06 | (0.03) | n/m |
| NON-IFRS AND OTHER FINANCIAL MEASURES(1) | |||
| EBITDA | 20,878 | 16,120 | +30% |
| Adjusted EBITDA (excluding intersegment EPC Contract Pérez Caldera margin) | 23,880 | 18,349 | +30% |
| Adjusted EBITDA Margin (excluding intersegment EPC Contract Pérez Caldera margin)(2) | 11.5% | 9.6% | +1.9pp |
| Adjusted Revenue (excluding intersegment EPC Contract Pérez Caldera) | 208,297 | 191,764 | +9% |
| Free Cash Flow | 45,846 | 37,424 | +23% |
| Adjusted Free Cash Flow | 37,927 | 32,666 | +16% |
| CASH FLOW | |||
| Net cash and cash equivalents and restricted cash provided by operating activities | 52,879 | 43,494 | +22% |
| In thousands of US dollars (unless noted) | H1 2026 | H1 2025 | Change |
| STATEMENT OF PROFIT AND LOSS AND COMPREHENSIVE INCOME | |||
| Revenue from contracts with customers | 375,531 | 361,336 | +4% |
| Gross profit | 47,280 | 33,998 | +39% |
| Profit (loss) | 6,743 | (3,641) | n/m |
| Basic and diluted earnings per share | 0.13 | (0.07) | n/m |
| NON-IFRS AND OTHER FINANCIAL MEASURES(1) | |||
| EBITDA | 41,009 | 27,571 | +49% |
| Adjusted EBITDA (excluding intersegment EPC Contract Pérez Caldera margin) | 45,146 | 30,560 | +48% |
| Adjusted EBITDA Margin (excluding intersegment EPC Contract Pérez Caldera margin)(2) | 12.0% | 8.7% | +3.3pp |
| Adjusted Revenue (excluding intersegment EPC Contract Pérez Caldera) | 375,404 | 349,679 | +7% |
| Free Cash Flow | 46,720 | 23,698 | +97% |
| Adjusted Free Cash Flow | 35,678 | 10,251 | +248% |
| CASH FLOW | |||
| Net cash and cash equivalents and restricted cash provided by operating activities | 61,892 | 30,325 | +104% |
| In thousands of US dollars (unless noted) | Jun 30, 2026 | Dec 31, 2025 | Change |
| FINANCIAL POSITION | |||
| Cash and cash equivalents and restricted cash | 137,022 | 63,767 | +115% |
| Total assets | 798,830 | 581,798 | +37% |
| Total interest-bearing liabilities | 351,223 | 243,517 | +44% |
| Net Debt(1) | 214,201 | 179,750 | +19% |
| Net Debt (excluding Pérez Caldera project)(1) | 163,537 | 179,750 | (9)% |
| Net Debt / LTM Adjusted EBITDA (x) (excluding intersegment EPC Contract Pérez Caldera margin)(1) | 2.1x | 2.1x | - |
| Net Debt (excluding Pérez Caldera project) / LTM Adjusted EBITDA (x)(1) | 1.6x | 2.1x | (0.5)x |
| OTHER | |||
| Backlog (US$ millions)(3) | 2,029 | 2,191 | (7)% |
| Backlog-to-LTM Revenue (x)(1)(3) | 2.7x | 2.9x | (0.2)x |
| Shares outstanding (thousands) | 52,395 | 52,395 | - |
Management Commentary
Steve Dixon, Chief Executive Officer of STRACON, commented: "The second quarter extended the operating improvement established in the first quarter. Revenue increased 6.5% to US$208.3 million, gross profit increased 23.0% to US$24.0 million, gross profit margin expanded to 11.5% from 10.0%, and the Company recorded profit of US$3.4 million compared with a loss of US$1.5 million in the same period of 2025. For the six-month period, Adjusted EBITDA (excluding intersegment EPC Contract Pérez Caldera margin)(1) increased 47.7% to US$45.1 million and Adjusted EBITDA Margin (excluding intersegment EPC Contract Pérez Caldera margin)(1)(2) expanded 3.3 percentage points to 12.0%.
Capital deployment in the quarter was directed principally to Pérez Caldera. STRACON Pérez Caldera SpA drew US$89.5 million under the non-recourse term loan facility, and the Company recorded US$89.6 million of asset additions on the project during the six-month period. Engineering and construction activity on the engineering, procurement and construction ("EPC") scope generated US$30.4 million of intersegment revenue in the quarter within the Engineering & Technology segment, which is eliminated on consolidation. The project remains in the construction phase; revenue and EBITDA(1) will be recognized within the Infrastructure segment upon commencement of operations.
Backlog(3) was US$2,029 million at June 30, 2026, compared with US$2,191 million at December 31, 2025, as revenue recognized of US$375 million during the six-month period exceeded contract bookings of US$213 million. Backlog(3) provides 2.7x coverage of last-twelve-months revenue(1) and approximately 98% consists of multi-year projects. Backlog conversion and the progression of Pérez Caldera through construction remain the principal determinants of the Company's medium-term trajectory. The Company continues to target Total Segment Revenue(1) above US$1.0 billion, backlog(3) above US$3.0 billion and EBITDA(1) above US$150 million over the three-year horizon, with the Infrastructure segment expected to contribute approximately 50% of consolidated EBITDA(1) within 18 to 24 months."
Andrés Gutiérrez Leiva, Chief Financial Officer of STRACON, added: "Operating cash flow increased to US$52.9 million in the quarter and US$61.9 million for the six-month period, from US$43.5 million and US$30.3 million in the corresponding periods of 2025. Free Cash Flow(1) was US$45.8 million for the quarter and US$46.7 million for the six-month period, and Adjusted Free Cash Flow(1) was US$37.9 million and US$35.7 million, respectively. Construction expenditures on Pérez Caldera of US$35.6 million in the quarter and US$45.3 million for the six-month period are funded through the non-recourse project financing and are presented separately from the Company's Net Capital Expenditures(1), which were US$4.5 million and US$7.1 million, respectively.
Cash and cash equivalents and restricted cash was US$137.0 million at June 30, 2026, an increase of 115% from December 31, 2025, reflecting the initial drawdowns under the Pérez Caldera facility and customer advances received on the project. Net Debt(1) was US$214.2 million, of which US$89.5 million relates to the non-recourse Pérez Caldera term loan. Excluding the Pérez Caldera project, Net Debt(1) was US$163.5 million and the corresponding ratio to last-twelve-months Adjusted EBITDA (excluding intersegment EPC Contract Pérez Caldera margin)(1) was 1.6x, compared with 2.1x at December 31, 2025, approaching the Company's 1.5x medium-term target. The Company was in compliance with all financial covenants under the Holdco Loan and the Pérez Caldera project financing at June 30, 2026.
Segment results were uneven in the quarter. Industrial Services generated Segment Adjusted EBITDA(1) of US$24.9 million on Segment Revenue of US$147.9 million, with Segment Adjusted EBITDA Margin(1)(2) of 16.8% compared with 7.7% in the same period of 2025, reflecting the commencement of the Tía María project and higher activity at the BESALCO-STRACON Consortium and the Fenix Gold project. Engineering & Technology recorded Segment Adjusted EBITDA(1) of US$7.9 million against US$4.3 million, supported by the Pérez Caldera EPC scope and higher activity at Antamina. Fleet Solutions recorded Segment Adjusted EBITDA(1) of US$3.1 million, compared with US$6.4 million in the same period of 2025, reflecting higher costs of services associated with increased activity in the segment together with higher compensation costs and average headcount. Segment EBITDA(1) for Fleet Solutions was negative US$2.7 million, reflecting a loss recognized on the sale of inventories during the quarter that is excluded from Segment Adjusted EBITDA(1)."
Operational Highlights
Revenue. Revenue from contracts with customers was US$208.3 million for the three-month period ended June 30, 2026, up 6.5% from US$195.6 million in the same period of 2025, and US$375.5 million for the six-month period, up 3.9%. Higher Industrial Services activity, including an incremental US$23.9 million from the Tía María project in Peru, US$10.8 million from the BESALCO-STRACON Consortium and US$9.7 million from the Fenix Gold project in Chile, was partially offset by the completion of the Lomas Bayas project (US$13.0 million) and lower activity at Antamina within Industrial Services (US$8.6 million), together with the conclusion of the Salares project in the Engineering & Technology segment.
Gross Profit and Profitability. Gross profit increased 23.0% to US$24.0 million for the three-month period ended June 30, 2026, representing a gross profit margin of 11.5% compared with 10.0% in the same period of 2025. Industrial Services contributed an incremental US$15.0 million of Segment Gross Profit and Engineering & Technology an incremental US$3.9 million, partially offset by a US$7.6 million decrease in Fleet Solutions and higher intersegment eliminations. The Company recorded profit of US$3.4 million for the quarter and US$6.7 million for the six-month period, compared with losses of US$1.5 million and US$3.6 million, respectively, in the corresponding periods of 2025.
Adjusted EBITDA. Adjusted EBITDA (excluding intersegment EPC Contract Pérez Caldera margin)(1) was US$23.9 million for the three-month period ended June 30, 2026, compared with US$18.3 million in the same period of 2025, an increase of 30.1%. Adjusted EBITDA Margin (excluding intersegment EPC Contract Pérez Caldera margin)(1)(2) expanded to 11.5% from 9.6%. For the six-month period, Adjusted EBITDA(1) increased 47.7% to US$45.1 million and the corresponding margin(1)(2) expanded to 12.0% from 8.7%.
Cash Flow. Net cash provided by operating activities was US$52.9 million for the three-month period ended June 30, 2026, compared with US$43.5 million in the same period of 2025, and US$61.9 million for the six-month period, compared with US$30.3 million. Free Cash Flow(1) was US$45.8 million for the quarter and US$46.7 million for the six-month period, compared with US$37.4 million and US$23.7 million, respectively, in the corresponding periods of 2025. Adjusted Free Cash Flow(1) was US$37.9 million and US$35.7 million, compared with US$32.7 million and US$10.3 million. Net Capital Expenditures(1) were US$4.5 million in the quarter and US$7.1 million for the six-month period; construction expenditures on the Pérez Caldera project of US$35.6 million and US$45.3 million, respectively, are presented separately in the statement of cash flows.
Capital Additions. Capital Additions(1) were US$17.2 million for the three-month period ended June 30, 2026 and US$39.4 million for the six-month period, compared with US$11.3 million and US$22.3 million in the corresponding periods of 2025, reflecting higher gross capital expenditures together with finance lease additions of US$12.7 million and US$32.3 million, respectively, supporting fleet requirements across the Industrial Services and Fleet Solutions segments. Construction in progress additions on the Pérez Caldera project were US$58.9 million for the quarter and US$89.6 million for the six-month period, of which US$35.6 million and US$45.3 million, respectively, had been paid at June 30, 2026.
Backlog. Backlog(3) was US$2,029 million at June 30, 2026, compared with US$2,191 million at December 31, 2025 and US$1,872 million at June 30, 2025. Contract bookings of US$213 million during the six-month period were exceeded by US$375 million of revenue recognized. Approximately 18.2% of backlog(3) is expected to be executed during the remainder of 2026, 51.5% between 2027 and 2029 and 30.3% from 2030 onwards. Approximately 98% of backlog(3) consists of multi-year projects and approximately 32% is derived from build-own-operate-maintain ("BOOM") contracts, being the operate and maintain ("O&M") and EPC scopes of the Pérez Caldera project, with the balance of 68% derived from relationship-type contracts. By segment, Industrial Services accounts for 51% of backlog(3), Infrastructure 20%, Engineering & Technology 15% and Fleet Solutions 14%. Backlog-to-LTM Revenue(1)(3) was 2.7x at June 30, 2026, compared with 2.9x at December 31, 2025.
Balance Sheet. Cash and cash equivalents and restricted cash was US$137.0 million at June 30, 2026, compared with US$63.8 million at December 31, 2025. The increase reflects operating cash inflows of US$61.9 million and financing cash inflows of US$77.1 million, partially offset by net cash used in investing activities of US$65.7 million. Total assets were US$798.8 million, an increase of 37.3%, driven principally by property, plant and equipment additions on the Pérez Caldera project. Net Debt(1) was US$214.2 million, compared with US$179.8 million at December 31, 2025, and Net Debt to Adjusted EBITDA (excluding intersegment EPC Contract Pérez Caldera margin)(1) on a last-twelve-months basis was 2.1x, unchanged from December 31, 2025. Excluding the non-recourse Pérez Caldera project financing and the related project cash, Net Debt(1) was US$163.5 million and the corresponding ratio was 1.6x, compared with 2.1x at December 31, 2025. The Pérez Caldera project financing is non-recourse to STRACON Group Holding Inc.
Geography. Revenue for the three-month period ended June 30, 2026 was concentrated in Peru (50%) and Chile (30%), with Canada (11%), Mexico (8%) and Colombia (1%) accounting for the balance.
Segment Performance
Segment revenue is reported at the operating segment level and includes intersegment transactions, which are eliminated on consolidation. Segment Gross Profit and Segment Operating Profit are derived from the Company's segment information disclosed in the unaudited interim condensed consolidated financial statements. Segment EBITDA(1), Segment Adjusted EBITDA(1), Segment Adjusted EBITDA Margin(1), Total Segment Revenue(1), Total Segment EBITDA(1) and Total Segment Adjusted EBITDA(1) are specified financial measures within the meaning of NI 52-112 - Non-GAAP and Other Financial Measures Disclosure, as applicable. The Infrastructure segment recorded no revenue in the periods presented. Results and Segment Backlog(3) from the Pérez Caldera EPC scope are reported within the Engineering & Technology segment; the related intersegment revenue and margin are eliminated on consolidation.
Total Segment EBITDA(1) was US$29.8 million for the three-month period ended June 30, 2026, compared with US$18.6 million in the same period of 2025, and Total Segment Adjusted EBITDA(1) was US$35.7 million, compared with US$20.1 million. Both measures are reconciled to the corresponding consolidated measures in Table 5 of the Appendix. The difference between the total-of-segments measures and consolidated results reflects unallocated corporate costs together with the elimination on consolidation of US$9.6 million of intercompany margin in the quarter (US$10.2 million for the six-month period) on EPC services provided by the Engineering & Technology segment to the Infrastructure segment for the Pérez Caldera project. That margin is deferred under IFRS and will reduce reported margin over the operating life of the asset.
| US$ thousands, unless noted | Engineering & Technology | Industrial Services | Fleet Solutions | Infrastructure | Total Segments(1) |
| Three months ended June 30, 2026 | |||||
| Segment Revenue from contracts with customers | 50,810 | 147,900 | 40,094 | - | 238,804 |
| Segment Gross Profit | 10,607 | 23,897 | (4,111) | - | 30,393 |
| Segment Operating Profit | 7,783 | 19,229 | (5,768) | (190) | 21,054 |
| Segment EBITDA(1) | 7,890 | 24,880 | (2,735) | (190) | 29,845 |
| Segment Adjusted EBITDA(1) | 7,890 | 24,880 | 3,122 | (190) | 35,702 |
| Segment Adjusted EBITDA Margin(1)(2) | 15.5% | 16.8% | 7.8% | n/m | 15.0% |
| Segment Backlog (US$ millions)(3) | 300 | 1,042 | 279 | 409 | 2,029 |
| Three months ended June 30, 2025 | |||||
| Segment Revenue from contracts with customers | 36,626 | 122,463 | 36,943 | - | 196,032 |
| Segment Gross Profit | 6,747 | 8,845 | 3,490 | - | 19,082 |
| Segment Operating Profit | 3,884 | 3,974 | 1,700 | - | 9,558 |
| Segment EBITDA(1) | 4,341 | 9,199 | 5,021 | - | 18,561 |
| Segment Adjusted EBITDA(1) | 4,341 | 9,404 | 6,370 | - | 20,115 |
| Segment Adjusted EBITDA Margin(1)(2) | 11.9% | 7.7% | 19.3% | n/m | 10.5% |
| Segment Backlog (US$ millions)(3) | 41 | 1,515 | 316 | - | 1,872 |
Engineering & Technology. Segment Revenue was US$50.8 million for the three-month period ended June 30, 2026, compared with US$36.6 million in the same period of 2025. The increase reflects US$30.4 million of intersegment revenue associated with the Pérez Caldera EPC scope and an incremental US$9.5 million at Antamina, partially offset by the conclusion of the Salares Norte project in Chile (US$21.9 million in the prior-year quarter) and the Cerro Verde project (US$4.0 million). Segment Adjusted EBITDA(1) was US$7.9 million compared with US$4.3 million, with Segment Adjusted EBITDA Margin(1)(2) of 15.5% compared with 11.9%. Segment Backlog(3) was US$299.8 million at June 30, 2026, compared with US$41.4 million at June 30, 2025. The increase reflects the Pérez Caldera EPC scope, the backlog for which is presented within the Engineering & Technology segment.
Industrial Services. Segment Revenue increased 20.8% to US$147.9 million from US$122.5 million, driven by the commencement of the Tía María project in Peru (US$23.9 million), higher activity at the BESALCO-STRACON Consortium (US$10.8 million) and the Fenix Gold project in Chile (US$9.7 million), partially offset by the completion of the Lomas Bayas project (US$13.0 million) and lower activity at Antamina (US$8.6 million). Segment Adjusted EBITDA(1) increased to US$24.9 million from US$9.4 million, with Segment Adjusted EBITDA Margin(1)(2) expanding to 16.8% from 7.7%, reflecting higher volumes and improved project mix. Segment Backlog(3) was US$1,041.5 million at June 30, 2026, compared with US$1,515.3 million at June 30, 2025, primarily reflecting normal contract burn-down on long-duration projects in the ordinary course.
Fleet Solutions. Segment Revenue was US$40.1 million, compared with US$36.9 million in the prior-year period, reflecting higher activity levels on ongoing projects. Segment EBITDA(1) was negative US$2.7 million, compared with positive US$5.0 million, and Segment Adjusted EBITDA(1) was US$3.1 million, compared with US$6.4 million, with Segment Adjusted EBITDA Margin(1)(2) of 7.8% compared with 19.3%. The decline reflects higher costs of services associated with increased activity in the segment, together with higher compensation costs and average headcount. Segment Adjusted EBITDA(1) excludes a US$5.2 million net loss recognized on the sale of inventories and US$0.5 million of severance costs; at the consolidated level, the net loss on the sale of inventories was US$1.5 million after the reversal of a previously recorded inventory provision. Segment Backlog(3) was US$278.6 million at June 30, 2026, compared with US$315.5 million at June 30, 2025.
Infrastructure. The Infrastructure segment did not record revenue in the period and recorded a Segment Operating Loss of US$0.2 million related to administrative expenses. Segment Backlog(3) was US$408.9 million at June 30, 2026, or approximately 20% of consolidated backlog(3), comprising the O&M scope of the Pérez Caldera project awarded by Anglo American Sur S.A. ("Anglo American") on December 30, 2025. The EPC scope of the project, representing US$248.9 million of backlog(3), is presented within the Engineering & Technology segment; together the two scopes represent approximately 32% of consolidated backlog(3). Revenue and EBITDA(1) from the capital recovery tariff and the O&M scope will be recognized within the Infrastructure segment upon commencement of operations, which remains subject to completion of the construction phase.
Pérez Caldera Infrastructure Project Update
The Pérez Caldera project anchors STRACON's Infrastructure segment. Awarded by Anglo American on December 30, 2025, the project involves an integrated engineering, construction, financing, and long-term operations and maintenance arrangement for dedicated infrastructure assets required to condition, remove, and transport tailings material from the Pérez Caldera Tailings Dam at the Los Bronces operation in Chile. The Pérez Caldera project supports the Pérez Caldera Tailings Dam Removal and Water Resource Adaptation Project, which received environmental approval in April 2025. The Company's economics under the project will be realized through a fixed capital recovery tariff payable by Anglo American over the operating life of the asset, which includes a designated margin and is contractually payable regardless of actual usage or tonnage throughput.
During the second quarter of 2026, the project advanced through the construction phase. Progress during the period is summarized below:
Project financing. On April 1, 2026, STRACON Pérez Caldera SpA completed financial close of US$370.0 million in non-recourse project financing, comprising US$338.8 million in term loan facilities and US$31.2 million in debt service reserve letter of credit facilities. The term loans bear interest at compounded daily Term SOFR plus 3.00% per annum, with scheduled quarterly amortization commencing October 15, 2027 and final maturity on October 15, 2030.
Drawdowns. As at June 30, 2026, US$89.5 million had been drawn under the term loan facilities. The facility is non-recourse to STRACON Group Holding Inc. The project financing requires a minimum debt service coverage ratio of 1.05:1.00 for each calculation period, together with customary affirmative and negative covenants, reserve account, insurance and mandatory hedging requirements. The Group was in compliance with all such covenants and obligations as at June 30, 2026.
Construction activity. Construction in progress additions on the project were US$58.9 million for the three-month period ended June 30, 2026 and US$89.6 million for the six-month period, of which US$35.6 million and US$45.3 million, respectively, had been paid at June 30, 2026. Borrowing costs of US$1.5 million were capitalized during the period at an interest rate of 7.09%. The EPC scope generated US$30.4 million of intersegment revenue in the quarter and US$37.7 million for the six-month period within the Engineering & Technology segment, together with US$9.6 million and US$10.2 million of intercompany margin, respectively, which is eliminated on consolidation and will reduce reported margin over the operating life of the asset.
Hedging. In connection with the Pérez Caldera Loan, the Company designated additional interest rate swap contracts and cross-currency swap contracts as cash flow hedges under IFRS 9 to mitigate the variability of future interest payments and the foreign exchange exposure associated with the US dollar-denominated financing of a Chilean subsidiary whose functional currency is the Chilean peso.
As previously disclosed, in connection with first disbursement STRACON Group Holding Inc. delivered to Anglo American a parent company guarantee in support of certain payment obligations of STRACON Pérez Caldera SpA under the BOOM contract, up to a maximum amount equal to US$85 million, reduced by sponsor equity contributions made to the project company. The capital structure of the project reflects the Company's stated approach to Infrastructure segment projects, under which approximately 70% to 80% of project costs are financed through non-recourse project debt and STRACON contributes the balance as sponsor equity. Operating results and backlog(3) from the EPC scope are reported within the Engineering & Technology segment, and backlog(3) from the O&M scope is presented within the Infrastructure segment. Together, the two scopes represented US$657.8 million of backlog(3) at June 30, 2026, being US$408.9 million within Infrastructure and US$248.9 million within Engineering & Technology. Revenue and EBITDA(1) from the capital recovery tariff and the O&M scope will be recognized within the Infrastructure segment upon commencement of operations.
Outlook
The Company's three-year strategic targets of Total Segment Revenue(1) above US$1.0 billion, backlog(3) above US$3.0 billion, and EBITDA(1) above US$150 million were established at the start of 2025 in connection with the formal establishment of the Infrastructure segment as a fourth reportable segment. The targets followed a concentrated multi-year effort to build internal engineering capacity, initiated with the 2022 launch of the Engineering & Technology segment, which positioned the Company to originate, structure, and execute long-duration infrastructure mandates such as Pérez Caldera. As at June 30, 2026, last-twelve-months Total Segment Revenue(1) was US$805.5 million and backlog(3) was US$2,029 million, representing approximately 81% and 68% of the corresponding three-year targets. The Company intends to revisit these targets upon completion of construction at the Pérez Caldera project, at which point the Infrastructure segment will be generating operational cash flows and the Company's capital structure, contracted revenue base, and growth pipeline(4) will be reassessed.
The Infrastructure segment is expected to contribute approximately 50% of consolidated EBITDA(1) within the next 18 to 24 months, supporting improved earnings visibility and cash-flow durability. The capital allocation framework targets Net Debt (excluding Pérez Caldera project)(1) to Adjusted EBITDA (excluding intersegment EPC Contract Pérez Caldera margin)(1) of 1.5x or lower through the cycle, and directs investment toward projects expected to earn returns on invested capital above the cost of capital. That ratio was 1.6x at June 30, 2026.
The Company's identified pipeline(4) of opportunities exceeds US$17 billion, including US$6.3 billion in infrastructure, supported by structural tailwinds in mining, including growing demand for copper and critical minerals, tightening water and tailings management standards, and a broad shift by mining operators toward integrated BOOM and Design-Build-Finance-Operate ("DBFO") infrastructure ownership models.
About STRACON Group
STRACON is an integrated, engineering-led and technology-enabled mining infrastructure and services group operating across the Americas. Headquartered in Toronto, Canada, STRACON provides end-to-end solutions across the mining lifecycle, including engineering and technology solutions, industrial services, equipment and support services, and infrastructure development and ownership. The Company partners with leading global mining operators to design, build, operate and maintain critical infrastructure that supports safe, efficient and sustainable mining operations.
Non-IFRS and Other Financial Measures
Throughout this press release, the Company refers to certain financial measures and ratios that are not prescribed by IFRS Accounting Standards as issued by the International Accounting Standards Board ("IASB"), as well as certain other financial measures within the meaning of National Instrument 52-112 - Non-GAAP and Other Financial Measures Disclosure. These measures comprise non-IFRS financial measures, non-IFRS ratios, total of segments measures, capital management measures, supplementary financial measures and other non-IFRS measures, as applicable.
The non-IFRS financial measures referred to in this press release include EBIT, EBITDA, Adjusted EBITDA (excluding intersegment EPC Contract Pérez Caldera margin), LTM Adjusted EBITDA (excluding intersegment EPC Contract Pérez Caldera margin), Adjusted Revenue (excluding intersegment EPC Contract Pérez Caldera), Segment EBITDA, Segment Adjusted EBITDA, Segment Adjusted Revenue, Free Cash Flow, Adjusted Free Cash Flow, Net Debt and Net Debt (excluding Pérez Caldera project).
The non-IFRS ratios referred to in this press release include Adjusted EBITDA Margin (excluding intersegment EPC Contract Pérez Caldera margin), Segment Adjusted EBITDA Margin, Net Debt to Adjusted EBITDA (excluding intersegment EPC Contract Pérez Caldera margin), Net Debt (excluding Pérez Caldera project) to LTM Adjusted EBITDA (excluding intersegment EPC Contract Pérez Caldera margin) and Backlog-to-LTM Revenue ratio.
The total of segments measures referred to in this press release include Total Segment Revenue, Total Segment Gross Profit, Total Segment EBITDA, Total Segment Adjusted EBITDA and LTM Total Segment Revenue.
Capital Additions is a capital management measure.
The supplementary financial measures referred to in this press release include Net Capital Expenditures and LTM Revenue.
Backlog and Segment Backlog are other non-IFRS measures.
These measures and ratios are used by management to assess the Company's operating performance, financial position, liquidity, capital structure, project activity and contracted revenue visibility, as applicable. They are provided to supplement, and not replace, financial measures prepared in accordance with IFRS. Certain of these measures do not have standardized meanings under IFRS and may not be comparable to similar measures presented by other issuers. These measures should not be considered in isolation or as a substitute for measures of performance, financial position or cash flows prepared in accordance with IFRS.
Adjusted EBITDA (excluding intersegment EPC Contract Pérez Caldera margin), LTM Adjusted EBITDA (excluding intersegment EPC Contract Pérez Caldera margin) and Adjusted Revenue (excluding intersegment EPC Contract Pérez Caldera) exclude items management considers not reflective of ongoing operations, namely (i) a new service strategic project, (ii) a select project in the Fleet Solutions segment, (iii) impairment of property, plant and equipment and (iv) other management adjustments, where appropriate. These measures are presented on a consolidated basis and exclude the intersegment revenue and margin from the EPC contract under which the Engineering & Technology segment provides EPC services to the Infrastructure segment for the Pérez Caldera Tailings Infrastructure Project, which are eliminated on consolidation.
LTM Revenue represents revenue from contracts with customers for the last twelve-month period. LTM Total Segment Revenue represents Total Segment Revenue from contracts with customers for the last twelve-month period, including intersegment transactions, which are eliminated on consolidation. These measures are used to assess the Company's progress against its three-year strategic targets and to calculate the Backlog-to-LTM Revenue ratio, as applicable.
Refer to the "Non-IFRS Measures including Non-IFRS Financial Measures, Non-IFRS Ratios and Supplementary Financial Measures" section of the Company's MD&A for the three-month and six-month periods ended June 30, 2026, available under the Company's profile on SEDAR+ at www.sedarplus.ca, for definitions, explanations of composition and usefulness, and reconciliations, where applicable. Reconciliations of the non-IFRS financial measures and total of segments measures referred to in this press release are also presented in the Appendix below. Unless otherwise indicated, financial information presented in this press release is prepared in accordance with IFRS.
Forward-Looking and Cautionary Statements
This press release contains certain forward-looking statements within the meaning of applicable Canadian securities laws. All statements, other than statements of historical facts, are forward-looking statements. Forward-looking statements are frequently, but not always, identified by words such as "expects", "anticipates", "believes", "hopes", "intends", "estimated", "potential", "possible" and similar expressions, or statements that events, conditions or results "will", "may", "could" or "should" occur or be achieved. Forward-looking statements relate to future events or future performance and reflect STRACON's management's expectations or beliefs regarding future events and include, but are not limited to, statements regarding: the expected contribution of the Infrastructure segment to consolidated EBITDA within 18 to 24 months; the construction timeline and commercial operation of the Pérez Caldera project, including subsequent drawdowns under the project financing; the Company's target Net Debt to Adjusted EBITDA (excluding intersegment EPC Contract Pérez Caldera margin) of 1.5x or lower; availability and utilization of project financing; backlog conversion and revenue visibility; future revenue, backlog, EBITDA and cash-flow generation; three-year strategic targets; future project awards and business development opportunities; the size and conversion of the Company's identified pipeline; the expected capital structure and financing terms of future infrastructure projects; and anticipated benefits from energy transition and critical minerals demand.
Although STRACON believes the expectations expressed in such forward-looking statements are based on management's reasonable expectations and assumptions, such statements do not guarantee future performance. The actual achievements of STRACON or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors. These risks, uncertainties and factors include general business, legal, economic, competitive, political, regulatory and social uncertainties, including project execution and construction risks, counterparty credit risk, commodity price fluctuations, foreign exchange and interest rate volatility, regulatory and permitting risks, financing risk, backlog conversion risk, risks related to customer demand and project awards, and other risks described in the reports that the Company files with the various Canadian securities authorities, including under the heading "Risk Factors" in the Company's annual MD&A for the year ended December 31, 2025, available on SEDAR+ at www.sedarplus.ca. Readers should not place undue reliance on forward-looking information. The Company undertakes no obligation to update forward-looking information except as required by applicable securities law.
For further information, please contact:
Josh Wardell, Vice President, Investor Relations
STRACON Group Holding Inc.
65 Queen Street West, Suite 910
Toronto, ON, Canada M5H 2M5
Tel: 416-553-8443
Email: josh.wardell@stracon-group.com
Website: www.stracon-group.com
Appendix - Non-IFRS and Other Financial Measures
The following tables provide reconciliations, where applicable, for the non-IFRS financial measures, non-IFRS ratios, total of segments measures and supplementary financial measures referred to in this press release to the most directly comparable financial measures disclosed in STRACON's unaudited interim condensed consolidated financial statements for the three-month and six-month periods ended June 30, 2026 and 2025.
These measures and ratios are provided to supplement, and not replace, financial measures prepared in accordance with IFRS Accounting Standards. Certain of these measures do not have standardized meanings under IFRS, may not be comparable to similar measures disclosed by other issuers, and should not be viewed as substitutes for measures of performance, financial position or cash flows prepared in accordance with IFRS. Complete definitions, explanations of composition and usefulness, and reconciliations, where applicable, are provided in the MD&A available on SEDAR+ at www.sedarplus.ca.
Table 1 - EBIT(1), EBITDA(1) and Adjusted EBITDA (excluding intersegment EPC Contract Pérez Caldera margin)(1)
| In thousands of US dollars | Q2 2026 | Q2 2025 | H1 2026 | H1 2025 |
| Profit (loss) | 3,375 | (1,465) | 6,743 | (3,641) |
| Share of loss (profit) of joint ventures and other financial assets | (300) | - | 81 | - |
| Finance income | (208) | (92) | (751) | (253) |
| Finance costs | 7,233 | 8,576 | 13,763 | 14,874 |
| Losses (gains) on net monetary position | 144 | (760) | (3) | (155) |
| Income tax expense (recovery) | 1,475 | 998 | 2,616 | (174) |
| EBIT(1) | 11,719 | 7,257 | 22,449 | 10,651 |
| Depreciation of property, plant and equipment | 5,066 | 3,609 | 9,416 | 7,697 |
| Amortization of right-of-use assets | 3,690 | 4,490 | 8,334 | 7,808 |
| Amortization of intangible assets | 403 | 764 | 810 | 1,415 |
| EBITDA(1) | 20,878 | 16,120 | 41,009 | 27,571 |
| New service strategic project (a) | - | 205 | (69) | (294) |
| Select project in the Fleet Solutions segment (b) | 127 | 1,349 | 739 | 1,792 |
| Impairment of property, plant and equipment (c) | - | - | 36 | - |
| Other management adjustments (d) | 2,875 | 675 | 3,431 | 1,491 |
| Adjusted EBITDA (excluding intersegment EPC Contract Pérez Caldera margin)(1) | 23,880 | 18,349 | 45,146 | 30,560 |
Table 2 - Free Cash Flow(1) and Adjusted Free Cash Flow(1)
| In thousands of US dollars | Q2 2026 | Q2 2025 | H1 2026 | H1 2025 |
| Net cash and cash equivalents and restricted cash provided by operating activities | 52,879 | 43,494 | 61,892 | 30,325 |
| Add: Interest paid on borrowings | 5,877 | 2,946 | 6,995 | 9,805 |
| Add: Interest paid on lease liabilities | 2,042 | 1,812 | 4,047 | 3,642 |
| Less: Repayment of lease liabilities | (10,434) | (7,420) | (19,127) | (13,938) |
| Less: Net Capital Expenditures | (4,518) | (3,408) | (7,087) | (6,136) |
| Free Cash Flow(1) | 45,846 | 37,424 | 46,720 | 23,698 |
| Less: Interest paid on borrowings and lease liabilities | (7,919) | (4,758) | (11,042) | (13,447) |
| Adjusted Free Cash Flow(1) | 37,927 | 32,666 | 35,678 | 10,251 |
Table 3 - Net Debt(1) and Net Debt to Adjusted EBITDA(1)
| In thousands of US dollars | June 30, 2026 | December 31, 2025 |
| Loans and borrowings | 246,126 | 150,030 |
| Lease liabilities | 105,097 | 93,487 |
| Total interest-bearing liabilities | 351,223 | 243,517 |
| Less: Cash and cash equivalents and restricted cash | (137,022) | (63,767) |
| Net Debt(1) | 214,201 | 179,750 |
| Net Debt / Adjusted EBITDA (excluding intersegment EPC Contract Pérez Caldera margin) (LTM) | 2.1x | 2.1x |
| Less: Pérez Caldera Loan | (89,546) | - |
| Add: Cash and cash equivalents and restricted cash attributable to the Pérez Caldera project | 38,882 | - |
| Net Debt (excluding Pérez Caldera project)(1) | 163,537 | 179,750 |
| Net Debt (excluding Pérez Caldera project) / Adjusted EBITDA (excluding intersegment EPC Contract Pérez Caldera margin) (LTM) | 1.6x | 2.1x |
Table 4 - Backlog(3) Reconciliation
| In millions of US dollars | H1 2026 | H1 2025 |
| Opening backlog | 2,191 | 1,789 |
| Add: Contract bookings during the period | 213 | 444 |
| Less: Revenue recognized during the period | (375) | (361) |
| Ending backlog(3) | 2,029 | 1,872 |
| Backlog-to-LTM Revenue ratio(1)(3) | 2.7x | 2.5x |
Amounts are presented in millions of US dollars. Backlog(3) at June 30, 2026 was US$2,028.9 million and at June 30, 2025 was US$1,872.3 million.
Table 5 - Reconciliation of Segment Measures to Consolidated Measures
The following table reconciles Total Segment Revenue from contracts with customers, Total Segment EBITDA(1) and Total Segment Adjusted EBITDA(1) to the most directly comparable IFRS measures.
| In thousands of US dollars | Q2 2026 | Q2 2025 | H1 2026 | H1 2025 |
| Revenue Reconciliation | ||||
| Engineering & Technology | 50,810 | 36,626 | 72,631 | 59,586 |
| Industrial Services | 147,900 | 122,463 | 269,332 | 233,298 |
| Fleet Solutions | 40,094 | 36,943 | 71,357 | 68,846 |
| Infrastructure | - | - | - | - |
| Total Segment Revenue from contracts with customers(1) | 238,804 | 196,032 | 413,320 | 361,730 |
| Other Costs and Eliminations (e) | (30,507) | (394) | (37,789) | (394) |
| Consolidated Revenue from contracts with customers | 208,297 | 195,638 | 375,531 | 361,336 |
| EBITDA Reconciliation | ||||
| Engineering & Technology | 7,890 | 4,341 | 7,621 | 1,690 |
| Industrial Services | 24,880 | 9,199 | 44,268 | 20,465 |
| Fleet Solutions | (2,735) | 5,021 | 1,943 | 10,767 |
| Infrastructure | (190) | - | (190) | - |
| Total Segment EBITDA(1) | 29,845 | 18,561 | 53,642 | 32,922 |
| Other Costs and Eliminations (e) | (8,967) | (2,441) | (12,633) | (5,351) |
| EBITDA(1) | 20,878 | 16,120 | 41,009 | 27,571 |
| Adjusted EBITDA Reconciliation | ||||
| Engineering & Technology | 7,890 | 4,341 | 7,621 | 1,690 |
| Industrial Services | 24,880 | 9,404 | 44,199 | 20,171 |
| Fleet Solutions | 3,122 | 6,370 | 8,448 | 12,559 |
| Infrastructure | (190) | - | (190) | - |
| Total Segment Adjusted EBITDA(1) | 35,702 | 20,115 | 60,078 | 34,420 |
| Corporate costs and intersegment eliminations (e) | (11,822) | (1,766) | (14,932) | (3,860) |
| Adjusted EBITDA (excluding intersegment EPC Contract Pérez Caldera margin)(1) | 23,880 | 18,349 | 45,146 | 30,560 |
Table 6 - Adjusted Revenue (excluding intersegment EPC Contract Pérez Caldera) and Adjusted EBITDA Margin (excluding intersegment EPC Contract Pérez Caldera margin)
| In thousands of US dollars (unless noted) | Q2 2026 | Q2 2025 | H1 2026 | H1 2025 |
| Reconciliation of Adjusted Revenue | ||||
| Revenue from contracts with customers | 208,297 | 195,638 | 375,531 | 361,336 |
| Less: New service strategic project (a) | - | - | (71) | (4,017) |
| Less: Select project in the Fleet Solutions segment (b) | - | (3,874) | (56) | (7,640) |
| Adjusted Revenue (excluding intersegment EPC Contract Pérez Caldera) | 208,297 | 191,764 | 375,404 | 349,679 |
| Adjusted EBITDA Margin Calculation | ||||
| Adjusted EBITDA (excluding intersegment EPC Contract Pérez Caldera margin) | 23,880 | 18,349 | 45,146 | 30,560 |
| Adjusted Revenue (excluding intersegment EPC Contract Pérez Caldera) | 208,297 | 191,764 | 375,404 | 349,679 |
| Adjusted EBITDA Margin (excluding intersegment EPC Contract Pérez Caldera margin) | 11.5% | 9.6% | 12.0% | 8.7% |
Table 7 - Reconciliation of LTM Adjusted EBITDA(1), LTM Revenue(1), LTM Total Segment Revenue(1) and Net Debt to Adjusted EBITDA (LTM)(1)
| In thousands of US dollars | For the twelve months ended June 30, 2026 |
| Adjusted EBITDA (excluding intersegment EPC Contract Pérez Caldera margin) - Year ended December 31, 2025 | 87,216 |
| Less: Adjusted EBITDA (excluding intersegment EPC Contract Pérez Caldera margin) - Six months ended June 30, 2025 | (30,560) |
| Add: Adjusted EBITDA (excluding intersegment EPC Contract Pérez Caldera margin) - Six months ended June 30, 2026 | 45,146 |
| Adjusted EBITDA (LTM) (excluding intersegment EPC Contract Pérez Caldera margin) | 101,802 |
| Revenue from contracts with customers - Three months ended September 30, 2025 | 189,997 |
| Revenue from contracts with customers - Three months ended December 31, 2025 | 197,291 |
| Revenue from contracts with customers - Three months ended March 31, 2026 | 167,234 |
| Revenue from contracts with customers - Three months ended June 30, 2026 | 208,297 |
| Revenue from contracts with customers (LTM) | 762,819 |
| Total Segment Revenue from contracts with customers - Year ended December 31, 2025 | 753,871 |
| Less: Total Segment Revenue from contracts with customers - Six months ended June 30, 2025 | (361,730) |
| Add: Total Segment Revenue from contracts with customers - Six months ended June 30, 2026 | 413,320 |
| Total Segment Revenue from contracts with customers - LTM | 805,461 |
| Net Debt - As at June 30, 2026 | 214,201 |
| Net Debt / Adjusted EBITDA (excluding intersegment EPC Contract Pérez Caldera margin) (LTM) (x) | 2.1x |
| Net Debt (excluding Pérez Caldera project) - As at June 30, 2026 | 163,537 |
| Net Debt (excluding Pérez Caldera project) / Adjusted EBITDA (excluding intersegment EPC Contract Pérez Caldera margin) (LTM) (x) | 1.6x |
Table 8 - Reconciliation of Segment Adjusted EBITDA(1) - Three months ended June 30, 2026
| In thousands of US dollars | Engineering & Technology | Industrial Services | Fleet Solutions | Infrastructure | Total Segments |
| Segment operating profit (loss) | 7,783 | 19,229 | (5,768) | (190) | 21,054 |
| Segment depreciation and amortization | 107 | 5,651 | 3,033 | - | 8,791 |
| Segment EBITDA | 7,890 | 24,880 | (2,735) | (190) | 29,845 |
| New service strategic project (a) | - | - | - | - | - |
| Select project in the Fleet Solutions segment (b) | - | - | 127 | - | 127 |
| Impairment of property, plant and equipment (c) | - | - | - | - | - |
| Other management adjustments (d) | - | - | 5,730 | - | 5,730 |
| Segment Adjusted EBITDA(1) | 7,890 | 24,880 | 3,122 | (190) | 35,702 |
| Segment Adjusted Revenue(1) | 50,810 | 147,900 | 40,094 | - | 238,804 |
| Segment Adjusted EBITDA Margin(1)(2) | 15.5% | 16.8% | 7.8% | n/m | 15.0% |
Table 9 - Reconciliation of Segment Adjusted EBITDA(1) - Three months ended June 30, 2025
| In thousands of US dollars | Engineering & Technology | Industrial Services | Fleet Solutions | Infrastructure | Total Segments |
| Segment operating profit | 3,884 | 3,974 | 1,700 | - | 9,558 |
| Segment depreciation and amortization | 457 | 5,225 | 3,321 | - | 9,003 |
| Segment EBITDA | 4,341 | 9,199 | 5,021 | - | 18,561 |
| New service strategic project (a) | - | 205 | - | - | 205 |
| Select project in the Fleet Solutions segment (b) | - | - | 1,349 | - | 1,349 |
| Impairment of property, plant and equipment (c) | - | - | - | - | - |
| Other management adjustments (d) | - | - | - | - | - |
| Segment Adjusted EBITDA(1) | 4,341 | 9,404 | 6,370 | - | 20,115 |
| Segment Adjusted Revenue(1) | 36,626 | 122,463 | 33,069 | - | 192,158 |
| Segment Adjusted EBITDA Margin(1)(2) | 11.9% | 7.7% | 19.3% | n/m | 10.5% |
Table 10 - Segment Revenue and Adjusted Revenue Reconciliation
| In thousands of US dollars | Engineering & Technology | Industrial Services | Fleet Solutions | Infrastructure | Total Segments |
| Three months ended June 30, 2026 | |||||
| Segment Revenue from contracts with customers | 50,810 | 147,900 | 40,094 | - | 238,804 |
| Less: New service strategic project (a) | - | - | - | - | - |
| Less: Select project in the Fleet Solutions segment (b) | - | - | - | - | - |
| Segment Adjusted Revenue(1) | 50,810 | 147,900 | 40,094 | - | 238,804 |
| Three months ended June 30, 2025 | |||||
| Segment Revenue from contracts with customers | 36,626 | 122,463 | 36,943 | - | 196,032 |
| Less: New service strategic project (a) | - | - | - | - | - |
| Less: Select project in the Fleet Solutions segment (b) | - | - | (3,874) | - | (3,874) |
| Segment Adjusted Revenue(1) | 36,626 | 122,463 | 33,069 | - | 192,158 |
(a) "New service strategic project" represents the impact on EBITDA of a strategic mining remediation service line commenced in 2023, in an early operational phase with a cost and margin structure not representative of the segment's established service mix.
(b) "Select project in the Fleet Solutions segment" represents the impact on EBITDA of a legacy contract within the Fleet Solutions segment inherited through the AMECO Chile SpA acquisition, which concluded in Q4 2025 and is not part of ongoing operations.
(c) Impairment of property, plant and equipment recognized in accordance with IAS 36.
(d) "Other management adjustments" consist of (i) professional financial, tax and legal consulting fees related to corporate reorganization activities, IT systems transformation, and professional services related to the Offering preparation and TSX and BVL listing support (US$819 thousand for the three-month period and US$1,375 thousand for the six-month period ended June 30, 2026); (ii) the net loss on the sale of inventories in the Fleet Solutions segment (US$1,532 thousand on a consolidated basis, being US$5,206 thousand at the segment level less the reversal of a previously recorded inventory provision of US$3,674 thousand presented within Other Costs and Eliminations); and (iii) severance costs related to corporate reorganization activities of US$524 thousand.
(e) "Other Costs and Eliminations" and "Corporate costs and intersegment eliminations" consist of unallocated corporate costs and intercompany eliminations made in arriving at consolidated results under IFRS.
Endnotes
(1) Non-IFRS financial measure, non-IFRS ratio, total of segments measure, capital management measure or supplementary financial measure, as applicable. See "Non-IFRS and Other Financial Measures" above and the "Appendix - Non-IFRS and Other Financial Measures" for definitions, compositions, explanations and, where applicable, reconciliations.
(2) Adjusted EBITDA Margin (excluding intersegment EPC Contract Pérez Caldera margin) is calculated as Adjusted EBITDA (excluding intersegment EPC Contract Pérez Caldera margin) divided by Adjusted Revenue (excluding intersegment EPC Contract Pérez Caldera). Segment Adjusted EBITDA Margin is calculated as Segment Adjusted EBITDA divided by Segment Adjusted Revenue.
(3) Backlog and Segment Backlog are other non-IFRS measures. Backlog represents off-balance-sheet amounts, consisting of the value of signed and enforceable customer contracts for work not yet completed and not yet recognized as revenue, including under fixed-term contracts and project-specific scopes of work. For clarity, backlog does not include letters of intent, expressions of interest, proposals, indicative estimates or other non-binding arrangements. Segment Backlog amounts are presented in US$ millions; consolidated Backlog may differ marginally from the sum of segment amounts due to rounding.
(4) Pipeline represents management's estimate of the aggregate potential contract value of identified business development opportunities being monitored or pursued by the Company as at the date of this press release. Pipeline includes opportunities at various stages of development, including early-stage discussions, pre-qualification, tender, proposal, negotiation and other commercial processes. Pipeline is not Backlog, does not represent signed or enforceable customer contracts, is not risk-adjusted, and there can be no assurance that any pipeline opportunity will be awarded to the Company or converted into revenue.
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Source: STRACON Group Holding Inc.
