SNC-Lavalin bounces back from corruption scandal
By Mike Hayes04 March 2016
SNC-Lavalin has released its fourth quarter earnings, showing adjusted profit as shares rose to CA$ 0.44 (US$ 0.33) per share, compared with CA$ 0.15 (US$ 0.11) in the same period in 2014.
The company’s adjusted fourth-quarter net income also rose to CA$ 66.1 million (US$ 49.2 million), from CA$ 22.7 million (US$ 16.9 million) in 2014.
Moving forward, SNC said it anticipated earnings from the business to rise this year, to between CA$1.50 (US$ 1.12) and CA$1. (US$ 1.27) per share, from CA$ 1.34 (US$ 0.99) in 2015.
The Montreal-based construction firm, still facing charges of corruption and fraud relating to deals in Libya, has benefited from strong cost-cutting efforts.
SNC's chief executive Neil Bruce, said, "I am particularly encouraged by the tremendous efforts from everyone at SNC-Lavalin to identify and implement initiatives, which should reduce expenses for 2016 by twice as much as the cost of restructuring. Our focus will now turn to improving operational excellence in order to sustain a culture of efficiency and execution."
At the end of last year, SNC’s backlog stood at CA$12 billion (US$ 8.94 billion), and the company has started 2016 strongly, winning a CA$ 1.3 billion (US$ 969 million) contract at the Darlington Nuclear Generating Station, as well as a CA$ 800 million (US$ 596 million) contract in Qatar for its oil and gas division.
Business analyst Maxim Sytchev told Canada’s Financial Post newspaper that he expects SNC stock to rally this year.
He said, "A lot of investors have been avoiding this name for a number of years and right now it's becoming a very different story, so these are all very powerful attributes to explain further momentum in the stock."