WSP results “strong” but has layoffs in Canada

WSP Global announced its results for the third quarter of 2016 on November 8, saying that the company’s performance had been “strong.”

Revenues were $1,552.5 million and net revenues were $1,189.8 million for the three months ending September 24, 2016. The numbers represent 3.3% and 5.8% growth, compared to the third quarter of last year. The company noted that the growth was mainly due to acquisitions.

Alexandre L’Heureux, president and chief executive officer of the Montreal-based global company, said the performance “demonstrates the strength of our business model based on geographical and sector diversification,” but he noted that it was “accomplished despite the challenges in the Canadian region.”

The company has added 2,500 employees across the globe, with the recent acquisition of the U.K.-based Mouchel Consulting.

However, a Canadian Press report in the Globe and Mail on November 8, said WSP had laid off 450 employees this year in Canada, “in response to the persistent economic weakness in western oil producing provinces and delays in the awarding of federal infrastructure contracts.”

WSP spokesperson Isabelle Adjahi confirmed to CCE: “Overall, we have a solid performance, in spite of the Canadian performance. This solid performance is supported by our geographically diverse revenue stream business model.  Our variable cost structure also gives us the flexibility to quickly adjust to an ever-changing global economic landscape.”

She continued, “We had forecasted a difficult year for Canada, mainly as the result of the downturn in the oil and gas sector, with few catalysts in 2016 that could have had a positive impact. However, a persistently stagnant Canadian economy and the slower than anticipated rollout of the Federal infrastructure stimulus plan also negatively impacted Canada. As a result, we took the opportunity to revisit and optimize our Canadian operations to be ready for when the Canadian economy recovers. This approach is similar to the successful strategy we adopted during the economic downturns in both the U.K. and Australia.”

At the end of the quarter, the WSP backlog was at $5,371.2 million, representing 10.3 months of revenues. The number was 9.8% higher than that for the same time-period of last year.

The company declared a quarterly dividend of $0.375 per share, with a 56.8% Dividend Reinvestment Plan (“DRIP”) participation.

The company statement said WSP will aim to continue to expand globally and deepen its technical expertise.

To see the full press release, click here.

To read the Globe and Mail report, click here.