SNC-Lavalin stoic about year-end results
"2013 was a year of great progress for SNC-Lavalin in spite of disappointing overall financial results," said Robert G. Card, president and chief executive officer of SNC-Lavalin Group, at a press conference on March 6.
“2013 was a year of great progress for SNC-Lavalin in spite of disappointing overall financial results,” said Robert G. Card, president and chief executive officer of SNC-Lavalin Group, at a press conference on March 6.
The company announced its 2013 year-end results, declaring a net income attributable to shareholders of $35.8 million ($0.24 per share) for the year ended December 31, 2013, down from $305.9 million ($2.02 per share) for the same period of 2012.
Over that period, the company increased its income in its Infrastructure Concessions Investments (“ICI”), such as its revenue from Highway 407. However, the engineering and construction sectors and operations and maintenance sectors, concluded 2013 in a loss position. The company reported a net loss from E&C and O&M of $245.8 million for 2013, compared to a net income of $149.0 million for 2012.
The company attributed the operating loss in infrastructure and environment as due partly to “legacy fixed-price contracts, particularly in the hospital and road sectors, as well as a risk provision recorded on a Libyan project.” The operating loss in the Oil & Gas segment for the year was due to a fixed-price project in Algeria. The “challenging legacy projects” in the company’s backlog amount to over $902 million.
Card remained optimistic. “I would like to characterize my journey since I joined the company as 2012 being the year of discovery, 2013 representing the year of house-cleaning, 2014 being the year of rebuilding and consolidation, and 2015 being the beginning of a return to normalcy.”
He said: “This last year was a true testament to the character and determination of SNC-Lavalin’s employees. Thanks to them, we have made significant progress on the strategic plan we outlined in May 2013.”
He said the company has:
– Executed significant steps to progress transformation into Top-Tier global E&C firm;
– Developed world-class ethics and compliance framework, punctuated by receipt of approval to contract with public authorities in Quebec;
– Performed an extensive evaluation and analysis of our ongoing projects and associated risks, notably in the second and third quarter of 2013, and initiated a reorganization of … European operations, totalling a net negative amount of $435 million;
– Continued strategic rebalancing of the ICI portfolio to develop both new business and shareholder value;
– Decreased SG&A expenses and launched a profit improvement initiative (“Value Up”) program to enhance efficiency and effectiveness and improve competiveness;
– Continued execution of Strategic Plan to focus on key markets and optimize geographic and services mix to enhance overall margin profile.
Card also mentioned that the company had recently been authorized by the Quebec Autorité des Marchés Financiers (AMF) to contract to do work in the public sector, and said this was “a key milestone in our objective to become a standard of excellence in ethics and compliance in the industry. With a strong cash position; a solid backlog, following recent awards; and a volume of additional bid opportunities, we are well-positioned to improve performance and continue building our platform for future growth and value creation.”
To see the full press release, click here.