Friday , August 19 2022

SNC-Lavalin focused 100%; on the court's fight, said CEO as a quarter quarter loss company reports


SNC-Lavalin Group Inc. says that it is not expected to have an invitation to hit a settlement that was discussed on federal fraud and corruption charges and is now bracing itself for a multi-successful court battle.

And he confirmed that a team of external workers and advisors were holding scenarios to develop the B reconfiguration of the company if necessary to secure the value of shareholders. The aim is to resist any financial deficit as the legal play continues.

In comments to discuss the first quarterly loss of SNC-Lavalin in six years, chief executive Neil Bruce said the company's position in the middle of a political storm in Ottawa over the past two weeks had taken its toll. And he said that the corporation simply wanted to move on.

Story continues below advertisement

"Our innocent employees are used as a puck in a political hockey game, and they really do not deserve it and they've got enough," Mr Bruce told stakeholders on a conference call. "So we're 100 percent focused on protecting ourselves at court."

Mr Bruce is trying to create a new course for SNC-Lavalin that is about growing the company to $ 15 billion in annual sales and profits to adjust from $ 5 to a share by 2020. But he has been hobbledo in that effort with legal trouble that he will not go away and uncover unexpected problems in January, especially with a contract with Chodelco Chile. The S & P Global scales breach the SNC-Lavalin credit rating to the rest of the rubbish as a result of the news, saying that it expects the company's credit measures to worsen over the next two years.

The trouble has mounted quickly and has surprised the market, resulting in calls from some investors to the company to take deeper steps, such as the sale of assets. Management faith has also been triggered and some shareholders, such as the Palos investment company in Montreal, have extended their long positions in the company.

Fixed income investors have shown cooler heads. SNC-Lavalin's five-year corporate bond, which first published last year with an interest coupon of 3.235 percent, has dropped in just a few weeks this week, suggesting that the company's long-term investors are confident that their dollar safe.

The stock fell by 2.9 per cent in Toronto to close at $ 34.76. It's trading at price levels that were not seen in a decade.

The future of SNC is clouded by legal difficulty whose decision makes it impossible to predict. The RCMP set up rarely corporate fraud and corruption fraud against the company in 2015, claiming that the company was rubbing individuals in Libya's former government, Moammar Gadhafi's dictator between 2001 and 2011.

In order to protect against the potential harm caused by court court court action, Mr Bruce recruited a team of external workers and advisers in October this year to analyze the options for reconfiguration of operations. He refused to give a great deal of detail about those options on Friday, but said that the company had "plenty of opportunities to grow the business outside Canada", and it also remains "committed to the Canadian market," and its around 9,000 Canadian employees.

Story continues below advertisement

The loss for the fourth quarter that ended December 31 was $ 1.6 billion, or $ 9.11 per weak share, at revenue of $ 2.56 billion, said SNC-Lavalin in a statement. That compares to a profit of $ 52.4 million, or 30 cents per diluted share, at revenue of $ 2.9 billion for the corresponding period in 2017. The backlog of the work was awarded again I completed at $ 14.9 billion at the end of the quarter, with $ 2.2 billion worth of new orders during the period.

Performance was hurt by a $ 1.2 billion pay that the company took last month to account for a decline in its oil and gas business. The management of SNC is uncertain about the ability of the company to gain new work in Saudi Arabia in relation to political relations between Canada and the Middle East.

The Montreal based multinational brokered quarterly dividend by more than half to 10 cents to save more cash while maintaining previous financial guidance for 2019. The company in good financial health and does not need to raise equity, says Mr Bruce.

SNC-Lavalin did not provide any clarity on any specific strategic moves of Friday in its statement of earnings, saying that only the manager intends to endeavor to an up-to-date strategy. The process, which is already under way, to sell a portion of a share in the Highway 407 Toronto doll road "continues to move forward," said the company. The sale of the balance would solve the weight of the company's balance sheet based on expectations and analysts that would receive $ 2 billion after tax, said National Bank analyst Maxim Sytchev, in a research note.

Mr Bruce has confirmed to the Globe and Mail that the company is struggling with payment agreements that include the construction of two sulfuric acid plants for Codelco. The problem disappears to SNC giving subcontractors a green light to do work that Codelco has not approved. An "error" that has insulated and included, said Mr Bruce on Friday, adding that SNC expects to recover some of that revenue in the future.

In terms of the challenges in the oil and gas section, oil prices are still volatile while customers take longer to approve projects and allocate capital, says Mr Bruce. Most have been able to oil and gas in August, 2014, by buying Kentz, just before global raw tanking prices.

Story continues below advertisement

The largest shareholder of the SNC, Caisse de dépôt et placement du Québec, on Thursday, confirmed its faith in the management of the engineering company and future forecasts, promising to act as a "rock" to support the company.

SNC keeps the company itself doing nothing inappropriate in Libya and that people who are responsible for the error are no longer in payroll. He has asked what was referred to as a recovery agreement with prosecutors who would allow him to settle the payments without going to a trial.

The company's campaign has destroyed a political earthquake in Ottawa after the Globe reported on 7 February that senior officials in the Prime Minister's Office put pressure on Jody Wilson-Raybould, a general attorney, to shadow; The charges against SNC-Lavalin. She refused to abolish afterwards. Earlier this week, Gerald Butts, the prime secretary of the First Minister, also resigned, but claimed that she had not emphasized Ms. Wilson-Raybould.

Source link