WSP Sees Strong Demand in US Power and Energy Sector

Energy markets are witnessing a significant shift in the US, with power and energy emerging as a key area of growth. According to WSP Global executives, the company is experiencing broad strength across various sectors, with power and energy being one of the strongest areas of demand. ## Growing Importance of Power and Energy in the US Market The US market has seen a significant shift in the past five years, with power and energy now accounting for approximately 35% to 40% of WSP's US revenue. This is a notable increase from the 80% generated by transportation and infrastructure five years ago. WSP's CEO, Alexandre L'Heureux, highlighted the long-term duration investment themes that are driving this growth. ## Accelerating Momentum in the US Power Market WSP's CFO, Alain Michaud, emphasized the accelerating momentum in the US power market. The company's acquisitions of POWER Engineers and TRC Companies have expanded its reach among US utilities, resulting in a 30% increase in net revenue from its 40 largest global power clients. The hard backlog from these clients in the US also rose by 20%. ## Diversified Growth Across Various Sectors While the power and energy sector is experiencing significant growth, other sectors are also performing well. Data center revenue grew by more than 20% year over year, while its sales pipeline expanded by approximately 30% year over year. Water revenue increased by 20%, and the water opportunity pipeline surged by 61% as communities invested in aging infrastructure, PFAS remediation, water quality mandates, and climate resilience. WSP is also supporting 22 prospective US nuclear sites, where its responsibilities include site selection, licensing, design, and construction support. ## Financial Performance WSP's revenue rose by 20% to CA$5.4 billion ($3.9 billion) during the quarter ended June 26, compared with CA$4.5 billion a year earlier. The company's backlog climbed by 23% to a record CA$20.1 billion, representing 11.6 months of revenue. However, net income fell by 12% to CA$246.1 million from CA$279.4 million for the same period a year ago, due to higher acquisition and integration expenses, larger unrealized derivative losses, and increased amortization and depreciation costs.