SNC-Lavalin updates outlook for full year 2016 results

by ahnationtalk on September 29, 2016535 Views

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SNC-Lavalin updates outlook for full year 2016 results

September 29, 2016

SNC-Lavalin Group Inc. (TSX:SNC) announces that it is updating its outlook for Fiscal 2016. Following its most recent evaluation and analysis of its projects portfolio, the Company had just established, and expects to be recording in the third quarter, unfavorable cost and revenue reforecasts on two Oil & Gas projects in the Middle East. The fourth quarter is expected to return to a more normal run rate, and discussions are ongoing to attempt to resolve the commercial issues in these contracts.

The outlook for the other segments remains largely unchanged with the Infrastructure segment trending to be slightly better than expected.

Due to these unfavorable cost and revenue reforecasts, the Company is updating its previously announced 2016 outlook from an adjusted diluted EPS from E&C(1) in the range of $1.50 to $1.70 to an adjusted diluted EPS from E&C(1) in the range of $1.30 to $1.60.

SNC-Lavalin remains confident in its diversified business model and continues to target an annualized adjusted E&C EBITDA(2) margin of 7% in 2017, mainly due to actions taken in the last 12 months through its “Step Change” and “Operational Excellence” programs.

The Company will provide further details in its upcoming third quarter earnings release as well as during its regularly scheduled earnings conference call and webcast following the earnings release.

The above updated outlook is based on the assumptions and methodology described in the Company’s 2015 Management’s Discussion and Analysis under the heading, “How We Budget and Forecast Our Results”, which should be read in conjunction with the “Forward Looking Statements” section below and is subject to the risks and uncertainties summarized therein, which are more fully described in the Company’s public disclosure documents.

About SNC-Lavalin

Founded in 1911, SNC-Lavalin is one of the leading engineering and construction groups in the world and a major player in the ownership of infrastructure. From offices in over 50 countries, SNC-Lavalin’s employees are proud to build what matters. Our teams provide engineering, procurement, construction, completions and commissioning services together with a range of sustaining capital services to clients in four industry sectors, oil and gas, mining and metallurgy, infrastructure and power. SNC-Lavalin can also combine these services with its financing and operations and maintenance capabilities to provide complete end-to-end project solutions. www.snclavalin.com

(1) Adjusted diluted EPS from E&C is defined as the adjusted net income from E&C(3) divided by the weighted average outstanding number of shares for the period.

(2) Adjusted E&C EBITDA is defined herein as earnings from E&C before net financial expenses, income taxes, depreciation and amortization, and excludes one-time net foreign exchange gains, charges related to restructuring and right-sizing and other, as well as the acquisition-related costs and integration costs incurred in connection with the acquisition of Kentz in 2014. The term “Adjusted E&C EBITDA” does not have any standardized meaning under IFRS. Therefore, it may not be comparable to similar measures presented by other issuers. Management uses this measure as a more meaningful way to compare the Company’s financial performance from period to period. Management believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate the Company’s performance. 

(3) Adjusted net income from E&C is defined as net income attributable to SNC-Lavalin shareholders from E&C, excluding one-time net foreign exchange gains, charges related to restructuring and right-sizing and other, as well as amortization of intangible assets, and the financing, acquisition-related costs and integration costs incurred in connection with the acquisition of Kentz in 2014. E&C is defined in the Company’s 2015 financial statements and Management’s Discussion and Analysis. The term “Adjusted net income from E&C” does not have any standardized meaning under IFRS. Therefore, it may not be comparable to similar measures presented by other issuers. Management uses this measure as a more meaningful way to compare the Company’s financial performance from period to period. Management believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate the Company’s performance.

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