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Aegion's (AEGN) Insituform Unit Wins $8M Restoration Deal

Zacks Equity Research
·2 min read

Aegion Corporation’s AEGN subsidiary — Insituform Technologies USA, LLC — has received an $8-million contract for a wastewater rehabilitation in Southwest Texas.

Per the contract, Insituform will rehabilitate more than 12,000 linear feet of sanitary sewer main utilizing trenchless technology, including 24-inch to 60-inch cured-in-place pipe (CIPP). The “no-dig” rehabilitation method lowers overall project costs and minimizes disruptions to residents. The Crews will also perform bypass pumping, miscellaneous point repairs and associated manhole improvements.

The restoration work is expected to begin this fall and will likely be completed by 2021-end.

Charles R. Gordon, Aegion’s president and CEO, said, “This is one of the larger projects Aegion has won in the region in recent years, and we look forward to completing the work safely using our industry-leading trenchless technologies.”

Aegion’s World Class CIPP Technology a Boon

Over the past several years, Aegion’s Infrastructure Solutions business — under which it performs municipal water and wastewater pipeline work — has completed several large projects within the city. The business — accounted for nearly 49% of revenues — is the largest contributor to top-line growth and remains committed to maintain its market leadership position in the rehabilitation of pipelines.

Although the company’s second-quarter revenues declined due to COVID-19-related disruptions and softness across the majority of the business, its flagship Insituform North America business generated strong revenues and new orders. The Insituform North America business was driven by its leading market position, and strength and stability of municipal water and wastewater markets.

Aegion’s shares have gained 31.2% over the past three months compared with the industry’s 33.3% growth. Investors’ sentiments might have got a boost on improving construction market scenario and the company’s solid contract wins.

Zacks Rank

Aegion — which shares space with TopBuild Corp. BLD, Gibraltar Industries, Inc. ROCK and Installed Building Products, Inc. IBP — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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