Jason Veenstra: I think the biggest factor is within our own control and it’s maintaining our high level of maintenance support for the fleet. So keeping that fleet operational when the demand is there. And then secondary, it’s getting these underutilized fleets put to work in winning those couple of bids, I said, — but you got to — it’s maintaining the fleet and even if demand there if you can’t have mechanical availability to keep it running, you won’t get the utilization. So the biggest part of this is always within our control and it’s why we continue to push our maintenance team to continue improving and to continue their strong performance. And then the rest of it is bucketing these assets placed where we think they’ve got long-term opportunities to continue to improve on utilization.
Jacob Bout: Right. That’s helpful. And then maybe just a question on Nuna. So you mentioned that restructuring was effectively done in Q1 and you’ve brought a new leadership. I would appreciate if you could talk a bit more about the steps that have been taken there? And do you still see margins at Nuna now getting back to normalized levels by the summer?
Joe Lambert: Starting from the end, yes. And the stuff we’ve taken really to be bring in a lot more of the stronger project controls and processes, especially around contract administration and change management and just tune up those processes and get them up to North American standards. And I believe we’ve been able to — we’ve got guys in there and are extremely strong performers in these areas and I’m very confident in that. And then I think there’s some upside in continuing to look at how we can build synergies and the bench strength between our 2 offices because we’re both right here in Edmonton.
Operator: Your next question comes from the line of Maxim Sytchev of National Bank Financial.
Maxim Sytchev: Joe, I was wondering if you don’t mind maybe expanding a little bit on MacKellar. Obviously, very strong contribution from those assets in the first 2 quarters. But curious to see around sort of the integration, how that’s been going, ERP thoughts and more importantly, how that will impact potential profitability, some asset utilization on a going forward basis? And maybe anything that you can mention in terms of the infrastructure opportunities in Australia. So yes, it was sort of — if you don’t mind talking about this, it would be helpful.
Joe Lambert: Yes. I guess I’ll start with the infrastructure. We’re still early days there. I don’t have a lot of projects by name. We’re really just in that research and setting up teams, I guess — and so it’s pretty early days on that and I expect more towards the end of Q2, Q3, we’d have better information on that. The ERP system rollout has gone smoothly. We’re expecting Q3 rollout of that. I do think there’s — I think we’re — there’s huge opportunities for us to gain on efficiencies. It’s very hard to put a number to that. But I know that when you get stronger inventory control systems and stronger work order systems and your maintenance, there is an inherent improvement in your efficiencies just because you just know a lot more about your equipment, you know a lot more about your parts.
And I think we’re going to see gains there. I just — I doubt we’ll be able to measure them because you’re measuring against something that you don’t know exists right now. But we’ve done this before. We’ve done it here. We’ve done it at Nuna and we always identify things after the fact that we — there were improvements that we didn’t even know were there. And there continued opportunities and for growth are extremely strong across really all commodity markets, I’d say, except for maybe nickel and possibly lithium, that’s really been the only downside in the Australian markets. The iron ore, the gold, all the coal from PCI metallurgical to thermal, extremely strong market and blue chip clients that are willing to look at 5-year terms which is great when we’re dealing with the assets of these sides.
So anything that I didn’t cover off there, Max?
Maxim Sytchev: No. And just maybe building a little bit on sort of the opportunity on the commodity side of things because you have extended one of your major contracts in Australia. I’m just wondering if there’s any other ones that are on sort of kind of rolling forward basis that need to be renewed. Yes.
Joe Lambert: I don’t think there’s anything coming up within this year. I don’t know if that slide in the back, I don’t have it memorized but I don’t think there’s any near-term items that need renewal. I think there’s next year and after that, there’s some. And most of these mines MacKellar has been on for decades. So I think the risk of renewals is very low, especially in the major ones they’re on, where they’re the only supplier of equipment on — and the 2 major coal mines, the on thermal and met. So — and everything I’ve heard and I’ve seen is we’ve had extremely positive client relationships. And I think with improved systems and performance down there, that’s just going to get better.
Maxim Sytchev: Right. Absolutely. Okay. And then maybe just one follow-up for Jason, if I may. So again, like a lot of things on teller side of things are being tightened up right now. How should we think maybe around, I don’t know, sort of EBITDA or free cash flow conversion from those assets kind of like before and after, if you don’t mind, maybe talking directionally, how should be thinking about this?
Jason Veenstra: Yes. We’ve been talking in kind of the — on the margin side with the new ERP and tightening things up in the kind of 1% to 2% to 3% range, Max, we’re not looking for step change in their margin profile. They’re well over 30% as an EBITDA margin and very strong in their kind of cost culture and operational excellence. So we don’t expect a step change there as far as margin. And — and yes, you’ll see their sustaining capital in the quarter came in kind of in the $15 million range. And so yes, their free cash flow conversion is probably 10% to 15% higher than ours on a full year basis. We have a front-loaded capital program as opposed to them. But the run rate they’ve established here in the first 6 months, we see as being indicative, we’re not expecting step changes with the ERP or even with the growth assets. It’s — they’re running at a pretty optimal level. Where we got to get them is their utilization up to staying in the ’80s and cresting 85.
Operator: Your next question comes from the line of Frederic Bastien of Raymond James.
Frederic Bastien: I know a priority of yours is to delever and bring down your debt-to-EBITDA ratio to within 1.5x by year-end. But do share buybacks re-enter the picture with your stock price trading below $30 right now?
