SNC-Lavalin shares tumble
the revised forecast, but did say the company came across issues in its pricing rates and execution requirements.
“It really a combination of things,” he said. “When you have large projects or complicated projects you might find yourself in situations where it’s costing you more than you thought or more it’s complicated than you thought and then you have to revisit some of the conditions you had in executing them.”
Girard said SNC is in discussions with clients to resolve the issues in these two contracts, which he described as being a “similar type of work.”
“In any project you’re going to run into matters that you have to address so there’s nothing unusual about that,” he said.
The company said this drop will be reflected in the third quarter, which ends Friday, but is expected to return to a more normal run rate by the fourth quarter.
SNC continues to target an adjusted earnings before interest, taxes, depreciation and amortization margin of seven percent in 2017.
This is the stock’s biggest oneday drop in almost 14 months, as the Montreal-based engineering firm has climbed more than 45 per cent since the beginning of 2016.
Girard said that more details about the issues and their impacts will be disclosed when the company releases its third-quarter results on Nov. 3.