Cost overruns pull SNC-Lavalin to quarterly loss
By Solarina Ho
TORONTO (Reuters) - Canada's SNC-Lavalin Group Inc (SNC.TO: Quote), one of the world's largest construction and engineering companies, reported a quarterly loss on Friday as cost overruns continued to hit results.
The Montreal-based company, which is trying to recover from a far-reaching corruption scandal last year that toppled senior executives, had warned of the loss in mid-October, when it slashed its 2013 outlook for a second time.
SNC, which announced a turnaround strategy in early May, stuck with its October financial forecasts on Friday. It expects net income of C$10 million to C$50 million for 2013, which was a hefty revision from its previous estimate of C$220 million to C$235 million.
The company said 2013's poor performance has been due to a number of obstacles. These include difficulties in its infrastructure and environment division and in its oil and gas unit, a soft commodity market that has dented mining and metallurgy results, and charges tied to a reorganization of its European operations.
"The decisions we have made during the third quarter, while difficult, were necessary," Chief Executive Robert Card said in a statement.
"The impact of the most recent extensive evaluation and analysis of our ongoing projects and the implementation of our globalization program should reduce future earnings volatility and restore our selling, general and administrative expenses to historical levels."
The net loss for the third quarter was C$72.5 million, or 48 Canadian cents a share, compared with net income of C$113.9 million, or 75 Canadian cents a share, in the year-before quarter.
Revenue was C$1.95 billion, down slightly from C$1.98 billion in the third quarter of last year. Continued...