What is the expected timeline for project completion and when will revenue be recognized?

Timeline & Revenue Recognition

The Phase 3 expansion of PUB’s Changi Water Reclamation Plant is slated to commence in the coming weeks and, based on the scale of the 96 M gallons‑per‑day capacity increase, the engineering‑services contract is expected to run 12‑18 months to reach mechanical completion and hand‑over. Under AECOM’s standard “percentage‑of‑completion” accounting for large‑scale infrastructure contracts, revenue is recognized incrementally as engineering design, procurement, and construction milestones are achieved rather than at a single point‑of‑sale. Consequently, the bulk of the project’s revenue will be booked mid‑2025 to early‑2026, with a modest tail‑end in the latter half of 2026 as final testing and commissioning are completed.

Trading Implications

• Short‑term: The announcement adds a multi‑hundred‑million‑dollar contract to AECOM’s order backlog, tightening the spread between the stock’s current price and its forward‑looking valuation. Expect a positive price reaction in the next 1‑2 weeks as the market prices in the incremental earnings uplift.
• Medium‑term: Because the majority of the revenue will be recognized later in 2025, the catalyst is more of a fundamental catalyst than an immediate earnings driver. Traders can position for a mid‑year rally as the project progresses and quarterly earnings begin to reflect the new contract’s contribution.
• Risk: Delays in permitting, supply‑chain bottlenecks, or a shift in PUB’s capital‑allocation priorities could push the completion window out, compressing the timing of revenue recognition. Maintaining a modest exposure or using options to hedge the upside while limiting downside is prudent.