SNC-Lavalin slashes earnings forecast, cuts 4,000 jobs
By Allison Martell
TORONTO (Reuters) - Canadian engineering and construction company SNC-Lavalin Group Inc lowered its full-year earnings forecast on Thursday, citing weakness in mining and other factors, adding it would scale back some operations and cut 4,000 jobs.
The news, which sent SNC shares down 9 percent, came as the company reported a third quarter profit, compared with a year-earlier loss. The Montreal-based company has been weathering a far-reaching scandal involving allegations of fraud and bribery, and dealing with troubled projects launched by its previous management.
SNC said it plans to scale back underperforming areas over the coming 18 months and shed some 4,000 jobs, or 9 percent of its global workforce. About three-quarters of the cuts will be outside Canada.
"We're not in the business of downsizing," Chief Executive Officer Robert Card told analysts and investors during a conference call.
"We're only doing it in this case because we felt we had to, to preserve a Canadian national champion that's going to be a big, successful E&C (engineering and construction) company in the future."
Card's predecessor, Pierre Duhaime, resigned in 2012 after an internal investigation found he authorized payments for projects that did not exist. Duhaime was later arrested, one of several executives accused of fraud and other offenses.
The allegations have not been proven in court.
Card said SNC has built a strong ethics and compliance system that he hopes will become a competitive advantage. Continued...