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SNC-Lavalin's 2017 net income surges 50pc to $382m

TORONTO, February 25, 2018

SNC-Lavalin, a leading engineering and construction group, has registered a net income of $382 million attributable to shareholders for 2017, up 50 per cent over the previous year.

Announcing its results for the fourth quarter and year ended December 31, 2017, the Canadian infrastructure major said its adjusted net income from E&C (engineering and construction) surged to $351.3 million, or $2.15 per diluted share, posting a 55.2 per cent increase compared to 2016.

The fourth quarter adjusted net income from E&C was put at $137.8 million, or $0.78 per diluted share, an increase of 87.6 per cent compared to the same period in 2016.

The company reported strong operating cash flow of $376.2 million in the fourth quarter.

On the solid performance, Group President and CEO Neil Bruce said: "We are very pleased with our 2017 performance. Through the acquisition of Atkins, the largest and most transformative in our history, we continued to deliver on our strategic growth objectives while positioning the company for future opportunities."

"We divested certain non-core and low growth businesses, further de-risked our business model and applied tighter governance mechanisms to proactively manage our project portfolio,” remarked Bruce.

"The integration of the Atkins business continues to progress well and will be fully completed in 2018. We have a positive outlook on growth and confidence in delivering on our 2020 vision. Our backlog is supported by a healthy pipeline of prospects across our sectors and geographies, as well as revenue synergies from our business development efforts in our enlarged group," stated the top official.

"Our recent selection as a preferred proponent for the Montreal light rapid transit system underscores the quality of our organic prospects and bolsters our reputation as the leader in infrastructure in Canada," he added.

The company reported a fourth quarter IFRS net income attributable to SNC-Lavalin shareholders of $52.4 million, or $0.30 per diluted share, compared with $1.6 million, or $0.01 per diluted share, for the corresponding period in 2016.

SNC-Lavalin said it delivered cost synergies of approximately $40 million related to the acquisition of Atkins in 2017 and remains on track to deliver cost synergies of $120 million by the end of 2018.

Adjusted net income from Capital for Q4 2017 was $34.9 million, or $0.20 per diluted share, compared with $42.6 million, or $0.28 per diluted share for the corresponding period in 2016, mainly due to a contribution from certain Capital investments and from certain Canadian Capital investments transferred to SNC-Lavalin Infrastructure Partners LP, which was partly sold in September 2017, partially offset by an increase in dividends received from Highway 407 ETR, it stated.

The company is now targeting a significant increase with an adjusted diluted EPS from E&C for 2018 in the range of $2.60 to $2.85, as well as an adjusted consolidated diluted EPS(5) in the range of $3.60 to $3.85.

"While we anticipate some seasonality in the E&C business and lower adjusted diluted EPS in Q1, we expect a gradual increase throughout the remainder of the year," remarked Bruce.

"The 2018 outlook is based on IFRS 15, which is applicable for the Company beginning January 1, 2018 and will be applied using the modified retrospective method. We expect that IFRS 15 will bring more volatility to the Company’s results from period to period, as some more stringent conditions on contract modifications could delay and slow down revenue recognition on the Company’s multi-year projects, but expect the same overall results through time," said the top official.

"While we expect continuing market challenges in 2018 in certain of the company’s sectors, we anticipate benefiting from Atkins synergies and restructuring savings. As such, we expect growth in the company’s total Segment EBIT(6) in 2018, compared with 2017," he added.-TradeArabia News Service

Tags: Construction | SNC-Lavalin | Canada | engineering | Infrastructure | Net Income |

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