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Aecon revises 2004 outlook

Jan 20, 2005

Toronto, Ontario – January 20, 2005: Aecon Group Inc. (TSX: ARE) today announced that it expects to report a loss before taxes of approximately $10 million for the fiscal year ended December 31, 2004. These expected results represent an improvement of approximately $7 million over the previous year, but the anticipated loss is at variance with Aecon's earlier outlook of a return to profitability in 2004.

Although improved year-over-year results are expected in five of Aecon's seven operating divisions, it has recently become apparent that the decline in two divisions has been more significant than previously expected. While results are still preliminary, it is now expected that Aecon will report considerable declines in its buildings and industrial divisions. In addition, its Quebec civil division, while showing improvement over 2003, is expected to report significant operating losses for the year. Results were also depressed by delays in claim settlements in Ontario and Quebec and a delayed contract closing and associated profits, all of which were expected to take place in the fourth quarter of 2004 but were pushed into the first quarter of 2005.

The reduced operating profit Aecon expects to report from its Industrial division reflects unplanned one-time contract costs on a large power project in New Brunswick as well as the impact of timing delays on various fabrication and module assembly contracts. These timing issues have now passed, and the Industrial division's various fabrication facilities have started 2005 at or near full capacity with substantial improvements expected for the year.

The losses within Aecon's Buildings division, which are now expected to be approximately $12 million, result primarily from contract losses on a variety of contracts, and is reflective of the impact of past project management and cost control practices that have been substantially improved throughout the year as well as management and overhead costs that have now been restructured. These changes will result in substantial improvement in 2005.

"Overall, Aecon's expected year-over-year improvement in five of our seven divisions reinforces management's view that Aecon remains solidly on the path to recovery," said John M. Beck, Chairman and CEO, Aecon Group Inc.

As a result of the previously unexpected fourth quarter loss, Aecon also announced that it is reviewing with its auditors whether a full or partial valuation allowance of up to approximately $30 million against net accumulated future tax assets is appropriate. This non-cash allowance would be taken purely as a technical measure pursuant to accounting convention under GAAP, and does not impact or reflect on the underlying economic value of Aecon and its various operations. The allowance in no way impacts Aecon's right to realize the benefit of these tax assets in future years.

Aecon expects to release its 2004 results on March 17, 2005.

Aecon Group Inc. is Canada's largest publicly traded construction and infrastructure development company. Aecon and its subsidiaries provide services to private and public sector clients throughout Canada and internationally.

The information in this news release includes certain forward-looking statements. These statements are based upon assumptions that are subject to significant risks and uncertainties. Although Aecon believes that the expectations reflected in forward-looking statements are reasonable, it can give no assurance that the expectations of any forward-looking statements will prove to be correct.