- Revenues for the third quarter of 2013 totalled $1.9 billion, in line with the third quarter of 2012.
- Net loss attributable to SNC-Lavalin shareholders for the third quarter of 2013 was $72.7 million (-$0.48 per share on a diluted basis), compared to a net income of $114.1 million ($0.75 per share on a diluted basis) for the third quarter of 2012.
- Revenues for the nine-month period ended September 30, 2013, were $5.8 billion, in line with the same period in 2012.
- Net loss attributable to SNC-Lavalin shareholders for the nine-month period ended September 30, 2013, was $56.8 million (-$0.37 per share on a diluted basis), compared to a net income of $212.1 million ($1.40 per share on a diluted basis) for the same period of 2012.
- Net loss excluding Infrastructure Concession Investments was $214.5 million for the nine-month period ended September 30, 2013, compared to a net income of $125.6 million for the corresponding period in 2012. SNC-Lavalin's net income from Infrastructure Concession Investments was $157.7 million for the nine-month period ended September 30, 2013, compared to $86.5 million for the same period of 2012.
- Revenue backlog totalled $9.0 billion at the end of September 2013, compared to $10.1 billion at the end of December 2012.
- The Board of Directors declared a cash dividend of $0.23 per share for the third quarter of 2013.
N.B.: All amounts indicated are in Canadian dollars.
MONTREAL, Nov. 1, 2013 /CNW Telbec/ -
SNC-Lavalin Group Inc.
Financial Highlights (unaudited)
|Third Quarter||Nine months ended September 30|
|(in thousands of Canadian dollars, unless otherwise indicated)||2013||2012||2013||2012|
|Revenues by activity|
|Operations and Maintenance||318,838||304,488||1,000,074||981,078|
|Infrastructure Concession Investments (ICI)||179,726||127,517||507,994||368,922|
|Net income (loss) excluding ICI (1)||$||(128,392)||$||83,148||$||(214,486)||$||125,549|
|SNC-Lavalin's net income from ICI||55,675||30,908||157,717||86,536|
|Net income (loss) attributable to SNC-Lavalin shareholders (1)||(72,717)||114,056||(56,769)||212,085|
|Net income attributable to non-controlling interests||253||(130)||523||287|
|Net income (loss) (1)||$||(72,464)||$||113,926||$||(56,246)||$||212,372|
|Diluted earnings (loss) per share ($) (1)||$||(0.48)||$||0.75||$||(0.37)||$||1.40|
|Shares outstanding (in thousands)|
|Weighted average number of outstanding shares - Basic||151,588||151,035||151,423||151,061|
|Weighted average number of outstanding shares - Diluted||151,588||151,175||151,423||151,331|
|As at||As at|
|September 30,||December 31,|
|Revenue backlog by activity||2013||2012|
|Operations and Maintenance||2,272,600||2,234,400|
|(1)|| Effective January 1, 2013, the Company has adopted the IAS 19 amendments with respect to employee benefits.
Accordingly, comparative figures were adjusted to conform to these amendments. See Note 2C to the Company's unaudited interim condensed consolidated financial statements for more details.
SNC-Lavalin Group Inc. (TSX: SNC) announces its results today for the third quarter and nine-month period ended September 30, 2013.
Third Quarter Results
For the third quarter of 2013, SNC-Lavalin reported a net loss attributable to SNC-Lavalin shareholders of $72.7 million (-$0.48 per share on a diluted basis), compared to a net income of $114.1 million ($0.75 per share on a diluted basis) for the comparable quarter of 2012.
The Company reported a net loss excluding Infrastructure Concession Investments ("ICI") of $128.4 million, compared to a net income of $83.2 million for the third quarter of 2012, mainly reflecting an operating loss in the Infrastructure & Environment segment, mainly due to unfavourable cost reforecasts on certain unprofitable legacy fixed-price contracts, particularly in the hospital and road sectors. The variance was also due to a lower contribution from Power, resulting mainly from unfavourable cost reforecasts on certain contracts, including one in North Africa, as well as a lower contribution from Mining & Metallurgy, mainly due to the impact of further softening of commodity markets.
In addition, mainly as a result of recent decisions and actions taken in connection with the implementation of the previously announced European reorganization, the Company has recorded a charge for restructuring costs and goodwill impairment totalling $68.2 million ($62.4 million after taxes) in the quarter. The reorganization is intended to increase efficiency and competitiveness for that region and related service offerings by sector of activity.
Net income from ICI increased to $55.7 million, compared to $30.9 million for the quarter ended September 30, 2012, mainly due to a higher dividend received from Highway 407 and a higher net income from AltaLink.
Revenues for the third quarter of 2013 totalled $1.9 billion, in line with revenues in the third quarter of 2012.
For the nine-month period ended September 30, 2013, SNC-Lavalin reported a net loss attributable to SNC-Lavalin shareholders of $56.8 million (-$0.37 per share on a diluted basis), compared to a net income of $212.1 million ($1.40 per share on a diluted basis) for the same period of 2012.
The Company reported a net loss excluding ICI of $214.5 million, compared to a net income of $125.6 million for the first nine months of 2012, mainly reflecting operating losses in the Infrastructure & Environment and Oil & Gas segments, a charge for restructuring costs and goodwill impairment relating to Europe, as well as a lower contribution from the Mining & Metallurgy segment, partially offset by a higher contribution from the Power segment. The operating loss in the Infrastructure & Environment segment for the nine-month period ended September 30, 2013, was mainly due to the unfavourable cost reforecasts described above, but also included a $47.0 million risk provision recorded in the second quarter of 2013 following an unexpected attempt to draw this amount under letters of credit on a Libyan project, as well as approximately $32 million from additional costs recognized in the first quarter of 2013 on a major hospital project. The operating loss in the Oil & Gas segment for the first nine months of 2013 was mainly due to a loss of $70.1 million recorded in the second quarter of 2013 and an unfavourable cost reforecast in the third quarter of 2013, both of which are related to a fixed-price project in Algeria.
Net income from ICI increased to $157.7 million, compared to $86.5 million for the nine-month period ended September 30, 2012, mainly due to a higher net income from Shariket Kahraba Hadjret En Nouss S.p.A., higher dividends received from Highway 407 and a higher net income from AltaLink.
Revenues for the nine-month period ended September 30, 2013, were $5.8 billion, in line with revenues for the same period in 2012.
Cash and cash equivalents as at September 30, 2013 was $0.8 billion, in line with the end of June 2013, compared to $1.2 billion as at December 31, 2012.
Revenue backlog totalled $9.0 billion at the end of September 2013, compared to $10.1 billion at the end of December 2012, mainly reflecting a decrease in the Power and Mining & Metallurgy segments.
"The decisions we have made during the third quarter, while difficult, were necessary," said Robert G. Card, President and Chief Executive Officer, SNC-Lavalin Group Inc. "The impact of the most recent extensive evaluation and analysis of our ongoing projects and the implementation of our globalisation program should reduce future earnings volatility and restore our selling, general and administrative expenses ("SG&A") to historical levels."
"While the third quarter was negatively impacted, it is important to highlight that our ICI portfolio continued to perform, that we made good progress on stabilizing our SG&A at 2012 levels, announced key senior management appointments and won certain contracts in our priority resource sectors. We also made significant progress on our Strategic Plan, particularly as it relates to rebalancing our ICI portfolio, with the announcement of an agreement to sell our minority interest in the Astoria II power plant and by initiating a process to sell an equity stake in AltaLink. The issues to resolve at SNC-Lavalin are not simple, but we are rapidly making real progress toward improving the performance of the Company and building a strong platform for future growth," added Mr. Card.
The Company is maintaining its previously announced 2013 outlook for which the Company's 2013 net income is expected to be in the range of $10 million to $50 million. This outlook is principally based on (i) the expectations that the Infrastructure & Environment and Oil & Gas segments will continue to be challenging throughout 2013, and the Mining & Metallurgy segment will continue to be affected by the softening of the commodity markets, while the Power and ICI segments will be the main contributors to net income (ii) the costs expectations relating to the Company's ongoing commitment to compliance matters and the improvement and strengthening of its processes across the organization (iii) the additional charges as a result of recent decisions and actions taken in connection with the implementation of a European reorganization (iv) the expected proceeds from the sale of 66% of the Company's minority interest in the Astoria II power plant, and (v) the assumptions and methodology described in the Company's 2012 Management's Discussion and Analysis under the heading "How We Budget and Forecast Our Results." This 2013 Outlook should be read in conjunction with the "Forward Looking Statements" section below and is subject to the risks and uncertainties summarized therein, which are more fully described in the Company's public disclosure documents.
The Board of Directors today declared a cash dividend of $0.23 per share, payable on November 29, 2013, to shareholders of record on November 15, 2013. This dividend is an "eligible dividend" for income tax purposes.
SNC-Lavalin is one of the leading engineering and construction groups in the world, and is a major player in the ownership of infrastructure and in the provision of operations and maintenance services. Founded in 1911, SNC-Lavalin has offices across Canada and in over 40 other countries around the world, and is currently active in some 100 countries. www.snclavalin.com
Reference in this press release, and hereafter, to the "Company" or to "SNC-Lavalin" means, as the context may require, SNC-Lavalin Group Inc. and all or some of its subsidiaries or joint ventures, or SNC-Lavalin Group Inc. or one or more of its subsidiaries or joint ventures.
Statements made in this press release that describe the Company's or management's budgets, estimates, expectations, forecasts, objectives, predictions, projections of the future or strategies may be "forward-looking statements", which can be identified by the use of the conditional or forward-looking terminology such as "aims", "anticipates", "assumes", "believes", "estimates", "expects", "goal", "intends", "may", "plans", "projects", "should", "will", or the negative thereof or other variations thereon. Forward-looking statements also include any other statements that do not refer to historical facts. All such forward-looking statements are made pursuant to the "safe-harbour" provisions of applicable Canadian securities laws. The Company cautions that, by their nature, forward-looking statements involve risks and uncertainties, and that its actual actions and/or results could differ materially from those expressed or implied in such forward-looking statements, or could affect the extent to which a particular projection materializes. Forward-looking statements are presented for the purpose of assisting investors and others in understanding certain key elements of the Company's current objectives, strategic priorities, expectations and plans, and in obtaining a better understanding of the Company's business and anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes.
The 2013 outlook referred to in this press release is forward-looking information and is based on the methodology described in the Company's 2012 Management's Discussion and Analysis under the heading "How We Budget and Forecast Our Results" and is subject to the risks and uncertainties described in the Company's public disclosure documents. The purpose of the 2013 outlook is to provide the reader with an indication of management's expectations, at the date of this press release, regarding the Company's future financial performance and readers are cautioned that this information may not be appropriate for other purposes.
Forward-looking statements made in this press release are based on a number of assumptions believed by the Company to be reasonable as at the date hereof. The assumptions are set out throughout the Company's 2012 Management's Discussion and Analysis (particularly, in the sections entitled "Critical Accounting Judgments and Key Sources of Estimation Uncertainty" and "How We Analyze and Report our Results" in the Company's 2012 Management's Discussion and Analysis), as updated in the Company's Third Quarter 2013 Management's Discussion and Analysis. This 2013 outlook also assumes that previously disclosed amounts relating to a claim in Algeria and the attempted draw on a letter of credit in Libya will not be reversed. If these assumptions are inaccurate, the Company's actual results could differ materially from those expressed or implied in such forward-looking statements. In addition, important risk factors could cause the Company's assumptions and estimates to be inaccurate and actual results or events to differ materially from those expressed in or implied by these forward-looking statements. These risks include, but are not limited to: (a) if the Company is not able to successfully execute on its new strategic plan, its business and results of operations would be adversely affected; (b) the outcome of pending and future claims and litigation could have a material adverse impact on the Company's business, financial condition and results of operation; (c) the Company is subject to ongoing investigations which could adversely affect its business, results of operations or reputation and which could subject it to sanctions, fines or monetary penalties, some of which may be significant; (d) further regulatory developments could have a significant adverse impact on the Company's results, and employee, agent or partner misconduct or failure to comply with anti-bribery and other government laws and regulations could harm the Company's reputation, reduce its revenues and net income, and subject the Company to criminal and civil enforcement actions; (e) a negative impact on the Company's public image could influence its ability to obtain future projects; (f) fixed-price contracts or the Company's failure to meet contractual schedule or performance requirements may increase the volatility and unpredictability of its revenue and profitability; (g) the Company's revenue and profitability are largely dependent on the awarding of new contracts, which it does not directly control, and the uncertainty of contract award timing could have an adverse effect on the Company's ability to match its workforce size with its contract needs; (h) the Company's backlog is subject to unexpected adjustments and cancellations, including under "termination for convenience" provisions, and does not represent a guarantee of the Company's future revenues or profitability; (i) SNC-Lavalin is a provider of services to government agencies and is exposed to risks associated with government contracting; (j) the Company's international operations are exposed to various risks and uncertainties, including unfavourable political environments, weak foreign economies and the exposure to foreign currency risk; (k) there are risks associated with the Company's ownership interests in ICI that could adversely affect it; (l) the Company is dependent on third parties to complete many of its contracts; (m) the Company's use of joint ventures and partnerships exposes it to risks and uncertainties, many of which are outside of the Company's control; (n) the competitive nature of the markets in which the Company does business could adversely affect it; (o) the Company's project execution activities may result in professional liability or liability for faulty services; (p) the Company could be subject to monetary damages and penalties in connection with professional and engineering reports and opinions that it provides; (q) the Company may not have in place sufficient insurance coverage to satisfy its needs; (r) the Company's employees work on projects that are inherently dangerous and a failure to maintain a safe work site could result in significant losses and/or an inability to obtain future projects; (s) the Company's failure to attract and retain qualified personnel could have an adverse effect on its activities; (t) work stoppages, union negotiations and other labour matters could adversely affect the Company; (u) the Company relies on information systems and data in its operations. Failure in the availability or security of the Company's information systems or in data security could adversely affect its business and results of operations; (v) any acquisition or other investment may present risks or uncertainties; (w) a deterioration or weakening of the Company's financial position, including its net cash position, would have a material adverse effect on its business and results of operations; ( x ) the Company may have significant working capital requirements, which if unfunded could negatively impact its business, financial condition and cash flows; (y) an inability of SNC-Lavalin's clients to fulfill their obligations on a timely basis could adversely affect the Company; (z) the Company may be required to impair certain of its goodwill, and it may also be required to write down or write off the value of certain of its assets and investments, either of which could have a material adverse impact on the Company's results of operations and financial condition; (aa) global economic conditions could affect the Company's client base, partners, subcontractors and suppliers and could materially affect its backlog, revenues, net income and ability to secure and maintain financing; (bb) fluctuations in commodity prices may affect clients' investment decisions and therefore subject the Company to risks of cancellation, delays in existing work, or changes in the timing and funding of new awards, and may affect the costs of the Company's projects; (cc) inherent limitations to the Company's control framework could result in a material misstatement of financial information, and; (dd) environmental laws and regulations expose the Company to certain risks, could increase costs and liabilities and impact demand for the Company's services. The Company cautions that the foregoing list of factors is not exhaustive. For more information on risks and uncertainties, and assumptions that would cause the Company's actual results to differ from current expectations, please refer to the sections "Risks and Uncertainties", "How We Analyze and Report Our Results" and "Critical Accounting Judgments and Key Sources of Estimation Uncertainty" in the Company's 2012 Management's Discussion and Analysis, as updated in the Company's Third Quarter 2013 Management's Discussion and Analysis.
The forward-looking statements herein reflect the Company's expectations as at the date of this press release and are subject to change after this date. The Company does not undertake any obligation to update publicly or to revise any such forward-looking statements whether as a result of new information, future events or otherwise, unless required by applicable legislation or regulation.
SNC-Lavalin's Consolidated Financial Statements and Management's Discussion and Analysis and other relevant financial materials are available in the Investor Relations section of the Company's website at www.snclavalin.com. These and other Company reports are also available on the website maintained by the Canadian Securities regulators at www.sedar.com.
For further information:
Vice-President, Investor Relations
514-393-8000, ext. 57553
Senior Vice-President, Global Corporate Communications
514-393-8000, ext. 57354