SNC Lavalin post Q2 profit slump, says H2 better
Quarterly profit drops 16%, CEO pledges rebound in second half of 2011
Canadian construction and EPC giant SNC-Lavalin announced its Q2 2011 results on Friday, posting a 16% drop in quarterly profit.
For the second quarter of 2011, net income attributable to SNC-Lavalin shareholders was $100.7 million ($0.66 per share on a diluted basis), compared to $119.1 million ($0.78 per share on a diluted basis) for the comparable quarter in 2010, mainly reflecting lower contributions from the Infrastructure & Environment and Infrastructure Concession Investments segments, partially offset by higher contributions from all other segments.
Comprehensive revenues rose to $1.67 billion from $1.36 billion.
The figures nevertheless matched analysts' expectations, with CEO Pierre Duhaime said a heavy backlog of work in all sectors and geographical markets will ensure a strong second half to offset weaker first-half earnings.
Duhaime cited the cost of evacuating several thousand employees from civil war-torn Libya late last year hit the first quarter, while lower contributions from the infrastructure unit, which handles power-to-pipeline projects, and from the environment business dragged down the second.
“Our revenues increased, our cash position and revenue backlog remained strong, and our list of prospects remains promising,” said Duhaime. “We were awarded significant projects in the first half of the year and we continue to see many opportunities across all our sectors of expertise. We are pleased with our subsidiary CANDU Energy’s agreement to acquire certain assets of Atomic Energy of Canada, and we look forward to finalizing this acquisition. With our expertise and experience in the nuclear sector, we believe that CANDU Energy. will allow us to open new markets and capitalize on existing ones.”
Revenue backlog remained strong at $9.3 billion at the end of June 2011, compared to $9.7 billion at the end of December 2010. The Packages and Operations & Maintenance revenue backlog decreased while the Services revenue backlog increased by 19.1%.
“We continue to expect our 2011 net income to remain in line with 2010, when we exclude the gains from the disposals of certain assets and investments recognized in 2010,” added Mr. Duhaime.