Canadian contractor SNC-Lavalin has reported a third quarter loss of CA 72.7 million (US$ 70 million), compared to net profit of CA$ 114 million (US$ 109 million) for the same three months in 2012.
Revenues were stable year-on-year at CA$ 1.9 billion (US$ 1.8 billion).
The company put the sharp fall in profits mainly down to an operating loss in its infrastructure and environment division – a result of unprofitable legacy fixed-price contracts, particularly in the hospital and road sectors.
SNC-Lavalin said a lower contribution from its power division, and its mining and metallurgy unit also had an impact.
In addition, restructuring charges and goodwill impairments took their toll. The contractor recorded net charges of CA$ 62.4 million (US$ 60 million) in the quarter.
For the nine months to 30 September, 2013, SNC-Lavalin reported a net loss of CA$ 56.8 million (US$ 54.5 million, compared to a net income of CA$ 212 million (US$ 204 million) for the same period in 2012. Revenues were CA$ 5.8 billion (US$ 5.6 billion), in line with same period in 2012.
President and CEO Robert Card said, “The decisions we have made during the third quarter, while difficult, were necessary. The impact of the most recent extensive evaluation and analysis of our on-going projects and the implementation of our globalisation program should reduce future earnings volatility and restore our selling, general and administrative expenses to historical levels.”
Mr Card highlighted progress the company had made with its strategic plan to shed non-core assets. It has reached an agreement to sell its minority interest in the Astoria II power plant and has also initiated a process to sell an equity stake in electricity transmission company AltaLink.
“The issues to resolve at SNC-Lavalin are not simple, but we are rapidly making real progress toward improving the performance of the company and building a strong platform for future growth,” he added.
SNC-Lavalin has been impacted by several on-going corruption investigations over recent years, including bribery allegations on a bridge construction project in Bangladesh, and suspect payments in Libya.
For the full-year, net income is expected to be in the range of CA$ 10 million (US$ 9.6 million) to CA$ 50 million (US$ 48 million).