SNC-Lavalin’s Q4 revenue, profit fall in tough environment
Company remains confident in outlook
SNC-Lavalin Group Inc. has reported that its fourth-quarter profit and revenue were down as several major divisions faced tough conditions, bringing a close to a difficult year for the engineering and construction giant.
The Montreal-based company, which operates around the world, has been dealing with the fallout from multiple allegations of corruption levelled at certain former SNC senior executives, including its former chief executive.
But the company said Thursday that it’s confident in its long-term outlook and will raise the quarterly dividend to 24 cents per share, payable April 3, a four per cent increase from its current dividend.
However, SNC said that its revenue fell to $2.12 billion in the fourth quarter, from $2.42 billion a year earlier.
The $300-million reduction in revenue in the quarter was spread across most of SNC’s activities, but was offset by increased revenue from its investments in infrastructure concessions, such as AltaLink, which is Alberta’s largest regulated electricity transmission company.
SNC’s net income fell to $92.54 million, from $93.84 million in the fourth quarter of 2012. The decline would have been bigger without improvements from infrastructure concession investments.
Its main operating activities — building, operating and maintaining major projects in several industries — had a loss of $31.3 million in the quarter, compared with $23.46 million in net income a year before.
Net i ncome f rom infrastructure concession investments grew to $123.83 million from $70.39 million in the fourth quarter of 2012, offsetting most of the decline in SNC’s operating activities.
Net income per share fell to 61 cents per share, down from 62 cents a year earlier, and were a penny below analyst estimates.
“We are well positioned to improve performance and continue building our platform for future growth and value creation,” president and CEO Robert Card said in a news release.
The company estimates it will earn between $2.25 and $2.50 per share in 2014, up from 24 cents per share in 2013 and $2.02 per share in 2012.
For the full year ended Dec. 31, SNC had $7.91 billion of revenue, down slightly from $8.09 billion in 2012, while net income plunged to $35.77 million or 24 cents per share last year from $305.9 million or $2.02 per share in 2012.
“This last year was a true testament to the character and determination of SNCLavalin’s employees. Thanks to them, we have made significant progress on the strategic plan we outlined in May 2013,” Card said.
SNC-Lavalin disclosed in 2012, before Card was hired, that $56 million in questionable payments had been made or approved by some senior executives.
The company said Thursday that several of its segments — infrastructure and environment, oil and gas, and mining and metallurgy — will continue to face challenges in the coming year.
But SNC said it also expects more contributions from its power, operations and management and concessions segments, and assumes SG&A expenses — a category that covers sales, administration and legal expenses — will continue to fall.