Second quarter profits dip at SNC Lavalin
By Chris Sleight06 August 2012
SNC-Lavlin's net profits for the second quarter of the year were down -68% to CA$ 32.5 million (US$ 33 million), form CA$ 102 million (US$ 102 million) a year ago. The Company's revenues for the quarter were up +14% to CA$ 1.9 billion (US$ 1.9 billion).
The company said its fall in profits reflected operating losses in its Power and Infrastructure & Environment divisions, but there was also a smaller contribution from its Hydrocarbons & Chemicals business. There was also a lower contribution from SNC-Lavalin's Infrastructure Concession Investments business compared to a year ago, when a special dividend was paid from the Highway 407 concession in Ontario, Canada.
Commenting on the results, interim CEO Ian Bourne said, "The second quarter was difficult in terms of project execution, but we are encouraged by our strong financial position and backlog."
As a result of the poor quarter, the company has cut its profit forecast for the year. It now expects net profits of between CA$ 325 million to CA$ 340 million (US$ 325 million to US$ 340 million). It had previously expected profits to be in line with 2011at CA$ 379 million (US$ 379 million).
Mr Bourne also added that the company was working on putting behind it the mistakes that saw the departure of three executives, including CEO Pierre Duhaime, following suspect payments being made through its North African businesses. The company has also seen two former employees appear in court this year on suspicion of bribing government officials in Bangladesh in connection with the Padma Bridge project.
"We are pleased with our progress in implementing the remedial measures emanating from the internal investigation conducted in the first quarter of 2012," said Mr Bourne.