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Already at the heart of a political crisis in Ottawa, is that SNC-Lavalin has been reserved yesterday to its shareholders a second unpleasant surprise in two weeks. His action was down in the stock Exchange, bringing the decline to 30 % since the end of January.
The title has lost 7 % yesterday on the Toronto stock Exchange to close at 34 $.
The consulting engineering firm, announced yesterday that it has not been able to agree with the client a major mining project in Latin America. Cost overruns accumulate there due to ” difficult conditions of the site, security measures and protection of the environment, higher-than-expected and the under-performance of sub-contractors “, a-t-on said yesterday.
The two parties have agreed to settle the dispute through a process of expedited arbitration “. SNC said they expect ” to recover significant amounts in the future “, but we don’t know when.
Meanwhile, this contract will weigh heavily on the results of the montreal company for 2018. The segment of Mining and metallurgy will suffer an operating loss of up to$ 350 Million, said yesterday that SNC-Lavalin. The financial analysts were predicting a loss rather$175-Million.
Profits are melting
Earnings per share of SNC for 2018, it should be between 1.20 and $ 1.35 per. This is a decrease of over 40 % compared to what the company provided, there are hardly two weeks. And more than 60 % compared to the autumn forecast.
The company has also unveiled yesterday the projections of profit largely below analysts ‘ expectations for 2019.
In the hope of avoiding new problems, SNC-Lavalin has decided not to bid for mining contracts of type engineering and construction.
Recall that the conflict of interest commissioner and the ethics of the House of commons, Mario Dion, has opened yesterday an investigation into the possible political interference of the office of the prime minister Justin Trudeau in order to avoid a criminal trial to SNC-Lavalin for the acts committed in Libya.