Canada's SNC-Lavalin looks at more cost cuts

Thu Nov 5, 2015 8:36pm EST
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(Reuters) - SNC-Lavalin Group Inc's (SNC.TO: Quote) new CEO said on Thursday the engineering and construction company is examining ways to cut costs to help meet 2017 margin targets, even as it reported third-quarter earnings per share that beat analysts' expectations.

In October, chief executive Neil Bruce succeeded Robert Card, an outsider brought in after the Montreal firm faced allegations of corruption against former executives.

Bruce said on a conference call the company would invest C$50 million on a sweeping cost-cutting program that would use strategies like consolidating office space and evaluating how much staff SNC needs to execute its work.

Bruce did not explicitly announce layoffs.

"It's more of an efficiency program," Bruce told analysts.

"If we become far more efficient and we win more work then we will provide more opportunities for our talented individuals to go with us," he said.

SNC-Lavalin said its 2015 profit would be at the lower end of its previously announced range of C$1.30-C$1.60 per share.

Revenue rose 21 percent to C$2.43 billion ($1.84 billion) in the third quarter ended Sept. 30, helped by the acquisition of British resource-sector engineering group Kentz Corp last year.

Analysts on average had estimated revenue of C$2.39 billion.   Continued...

A pedestrian walks past the SNC-Lavalin Group Inc., headquarters in Montreal, May 7, 2009.  REUTERS/Christinne Muschi