Canadian contractor SNC-Lavalin will pull out of 15 countries and avoid lump-sum EPC projects after making a net loss of US$13m in the first quarter of 2019.
Complaining again of the reputational damage inflicted by the company’s pending corruption trial, president and chief executive Neil Bruce nevertheless forecast a positive rest-of-the-year.
"We remain confident that we can deliver our 2019 outlook, despite being disappointed with our first-quarter performance," he said.
"We will be focusing on our core geographies and are removing unprofitable revenues across 15 countries where we have sub-scale operations. We have also stopped bidding on lump-sum EPC projects, as going forward we will be undertaking lump sum EPC work in infrastructure and oil and gas only in our core regions."
The company’s engineering and construction revenue fell by just over 3% in the quarter, to US$1.7bn.
Repeating a complaint made in December, Bruce said the firm has lost out on contracts because competitors are capitalising on the corruption case.Â
"We believe that there’s at least C$5 to C$6 billion worth of contracts to date that we are privy to that we lost out on because of our competitors using (corruption charges) as a negative," he told a shareholders’ meeting, reports Bloomberg.Â Â
The company will combine its oil and gas business with its mining unit.
Chief operating officer Ian Edwards, appointed in late January, is trying to cut overheads by $185m a year. The company hopes to realise just over $75m of such savings during the rest of 2019.
Earlier this year, the firm slashed its 2018 guidance twice in three weeks, more than halving its profit forecast and halting all bidding on future mining projects after a feud between Canada and Saudi Arabia and the cancellation of projects with Codelco, Chile’s state-owned copper mining company.
Image: One of SNC-Lavalin’s projects, awarded in 2005, is the Canada Line: a 19km, fully-automated commuter rail line in Vancouver (SNC-Lavalin)