News / SNC Lavalin reports surprising quarterly loss

SNC Lavalin reports surprising quarterly loss

🕔 August 5, 2013

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SNC-Lavalin reported a net loss attributable of C$37.7 million for the second quarter of 2013, compared to a net income of C$31.7 million for the comparable quarter of 2012.

SNC reported a net loss excluding Infrastructure Concession Investments (ICI) of C$104.7 million, compared to a net income of $1.2 million for the second quarter of 2012, mainly reflecting operating losses in the Oil & Gas and Infrastructure & Environment segments, due to unforeseeable and evolving political contexts.

The operating loss in Oil & Gas results mainly from SNC-Lavalin recognizing a loss of C$70.1 million relating to a recent confirmation of a claim received alleging late penalties under a fixed-price project in Algeria. To date SNC continues its discussions with the client and it intends to deploy all necessary actions to resolve these penalties.

The operating loss in Infrastructure & Environment is due to SNC-Lavalin having recorded in the quarter a risk provision of C$47.0 million, following a recent unexpected attempt to draw this amount under letters of credit, covering advance payment and performance, previously issued in favour of a client on a Libyan project. SNC informed that it is not currently aware of any claim relating to the advance payment or performance. The project has been halted since the civil unrest began in Libya. SNC is seeking to clarify the situation surrounding this attempt to draw on the letters of credit and will use all legal and other means available to prevent any draws.

Net income from Infrastructure Concession Investments (ICI) increased to C$67.0 million, compared to C$30.5 million for the quarter ended June 30, 2012, due to a higher net income from AltaLink and a higher dividend received from Highway 407, as well as a higher net income from Shariket Kahraba Hadjret En Nouss S.p.A., as uncertainties on dividend collection were resolved.

Revenues for the second quarter of 2013 were substantially unchanged from revenues in the second quarter of 2012.

Source: SNC Lavalin

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