All currency references in this press release are in Canadian dollars except as otherwise indicated.
2019 Fourth Quarter Financial Highlights
New strategic direction continuing to deliver results: In
Strong operating cash flow:
Resources restructuring: The Company made the decision to close Valerus, non-core, underperforming, mid-stream oil and gas production and processing facilities based in
Federal charges settled:
Cost reduction program: In the fourth quarter of 2019, the Company successfully completed its
IFRS net loss attributable to
CEO Commentary
'In the fourth quarter of 2019, we generated strong operating cash flow, the highest since Q4 2017, and delivered solid earnings on an adjusted basis. Our SNCL Engineering Services business line continued to perform well, and we continued to reduce the SNCL Projects LSTK backlog. We also took the necessary decision to close Valerus, non-core, unprofitable, mid-stream oil and gas production and processing facilities, as part of our commitment to restructure the Resources business. Additionally, we appointed a President of Infrastructure Projects, a role dedicated solely to executing and managing the wind-down of the remaining LSTK infrastructure projects.
'We settled the federal charges resulting from the Company's legacy activities in
Fourth Quarter Results
The Company reported an IFRS net loss attributable to
Adjusted net income from E&C(1) in the fourth quarter of 2019 increased to
SNCL Engineering Services
Revenue from the SNCL Engineering Services line of business, which includes the EDPM, Nuclear, Infrastructure Services, and Capital segments, totaled
SNCL Engineering Services, excluding Capital, recorded a strong Segment EBIT(7) and Segment EBIT ratio of
SNCL Projects
Revenue from the SNCL Projects line of business, which includes LSTK construction contracting in the Infrastructure EPC Projects and Resources segments, totaled
SNCL Projects recorded a negative Segment EBIT(7) totaling
Backlog and Bookings
The Company's backlog totaled
LSTK Projects Update
The Company continued to run off the LSTK projects component of its SNCL Projects backlog which totaled
Financial Position and Cash Flows
As of
As at
Quarterly Dividend
The Board of Directors today declared a cash dividend of
2020 Outlook
The Company expects that in 2020 the gross revenue from SNCL Engineering Services, excluding Capital, will grow by a low single digit percentage, and that Segment EBITDA(9) as a percentage of gross revenue, from SNCL Engineering Services, excluding Capital, will be between 10% and 12%.
This outlook is based on the assumptions and methodology described in the Company's 2019 Management's Discussion and Analysis under the heading, 'How We Budget and Forecast Our Results' and 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.
Special Committee
The special committee established by the Board in
About
Founded in 1911,
Forward-looking Statements
Statements made in this press release that describe the Company's or management's budgets, estimates, expectations, forecasts, objectives, predictions, projections of the future or strategies may be 'forward-looking statements', which can be identified by the use of the conditional or forward-looking terminology such as 'aims', 'anticipates', 'assumes', 'believes', 'cost savings', 'estimates', 'expects', 'goal', 'intends', 'may', 'plans', 'projects', 'should', 'synergies', 'target', 'vision', 'will', or the negative thereof or other variations thereon. Forward-looking statements also include any other statements that do not refer to historical facts. Forward-looking statements also include statements relating to the following: i) future capital expenditures, revenues, expenses, earnings, economic performance, indebtedness, financial condition, losses and future prospects and ii) business and management strategies and the expansion and growth of the Company's operations. All such forward-looking statements are made pursuant to the 'safe-harbour' provisions of applicable Canadian securities laws. The Company cautions that, by their nature, forward-looking statements involve risks and uncertainties, and that its actual actions and/or results could differ materially from those expressed or implied in such forward-looking statements, or could affect the extent to which a particular projection materializes. Forward-looking statements are presented for the purpose of assisting investors and others in understanding certain key elements of the Company's current objectives, strategic priorities, expectations and plans, and in obtaining a better understanding of the Company's business and anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes.
Forward-looking statements made in this press release are based on a number of assumptions believed by the Company to be reasonable as at the date hereof. The assumptions are set out throughout the Company's 2019 MD&A (particularly in the sections entitled 'Critical Accounting Judgments and Key Sources of Estimation Uncertainty' and 'How We Analyze and Report our Results'). If these assumptions are inaccurate, the Company's actual results could differ materially from those expressed or implied in such forward-looking statements. In addition, important risk factors could cause the Company's assumptions and estimates to be inaccurate and actual results or events to differ materially from those expressed in or implied by these forward-looking statements. These risks include, but are not limited to: (a) results of the new 2019 strategic direction coupled with a corporate reorganization; (b) fixed-price contracts or the Company's failure to meet contractual schedule, performance requirements or to execute projects efficiently; (c) contract awards and timing; (d) remaining performance obligations; (e) being a provider of services to government agencies; (f) international operations; (g) Nuclear energy services; (h) ownership interests in Capital investments; (i) dependence on third parties; (j) joint ventures and partnerships; (k) information systems and data; (l) competition; (m) professional liability or liability for faulty services; (n) monetary damages and penalties in connection with professional and engineering reports and opinions; (o) insurance coverage; (p) health and safety; (q) qualified personnel; work stoppages, union negotiations and other labour matters; (s) extreme weather conditions and the impact of natural or other disasters and global health crises; (t) intellectual property; (u) divestitures and the sale of significant assets; (v) impact of operating results and level of indebtedness on financial situation; (w) liquidity and financial position; (x) indebtedness; (y) security under the SNC Lavalin Highway Holdings Loan; (z) dependence on subsidiaries to help repay indebtedness; (aa) dividends; (bb) post-employment benefit obligations, including pension-related obligations; (cc) working capital requirements; (dd) collection from customers; (ee) impairment of goodwill and other assets; (ff) outcome of pending and future claims and litigations; (gg) ongoing and potential investigations; (hh) settlements; (ii) further regulatory developments as well as employee, agent or partner misconduct or failure to comply with anti-bribery and other government laws and regulations; (jj) reputation of the Company; (kk) inherent limitations to the Company's control framework; (ll) environmental laws and regulations; (mm) Brexit; (nn) global economic conditions and (oo) fluctuations in commodity prices.
The Company cautions that the foregoing list of factors is not exhaustive. For more information on risks and uncertainties, and assumptions that could cause the Company's actual results to differ from current expectations, please refer to the sections 'Risks and Uncertainties', 'How We Analyze and Report Our Results' and 'Critical Accounting Judgments and Key Sources of Estimation Uncertainty' in the Company's 2019 MD&A.
The forward-looking statements herein reflect the Company's expectations as at the date of this press release and are subject to change after this date. The Company does not undertake to update publicly or to revise any such forward-looking statements whether as a result of new information, future events or otherwise, unless required by applicable legislation or regulation.
Contact:
Tel: 514-393-8000
Email: media@snclavalin.com
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