SNC-Lavalin reduces its net income outlook
SNC-Lavalin announced on October 15 that it has revised its outlook for 2013, and now expects consolidated net income in the fiscal year 2013 to be in the range of $10 million to $50 million, as compared to the previous "guided range" of $220...
SNC-Lavalin announced on October 15 that it has revised its outlook for 2013, and now expects consolidated net income in the fiscal year 2013 to be in the range of $10 million to $50 million, as compared to the previous “guided range” of $220 million to $235 million.
The Montreal-based company said the change follows an extensive analysis of its portfolio of projects and unfavourable reforecasts on legacy fixed price contracts in North Africa and in its Infrastructure & Environment division, particularly hospital and road projects. Since most of these cost reforecasts relate to projects that were already in a loss position, the company says they are one-time events and it does not expect them to affect its profitability profile in the future.
Owing to the company’s reorganization in Europe, the company also said it will be impacted by an additional charge for those changes of approximately $75 million. The reorganization is intended to increase efficiency and competitiveness for the region.
Softness in the commodity markets has also affected the company’s mining and metallurgy division.
The revised outlook takes into account the expected proceeds from the September 4 announced sale of 66 per cent of its minority interest in the Astoria II power plant in New York City.
Robert G. Card, president and chief executive officer, of SNC-Lavalin Group, remained upbeat. He said in a release: “Going forward, we will remain focused on winning and delivering high margin projects and implementing measures to restore our SG&A to historical levels, or better, with the aim of better positioning SNC-Lavalin for growth. We remain encouraged by some of the recent resource sector contracts awarded to the Company and the significant progress we have made in implementing our strategic plan.”
SNC-Lavalin will announce its third quarter results on November 1, 2013.
To read the press release, click here.