Highlights
Departure of Chief Executive Officer and Appointment of Interim
Chief Executive Officer
- SNC-Lavalin announced that Pierre
Duhaime has stepped down from his position as Chief
Executive Officer and as a director and will retire from the
Company. Ian A. Bourne will assume
the function of Vice-Chairman and Interim Chief Executive Officer
while a search for a new Chief Executive Officer is carried
out.
Fourth Quarter
- For the fourth quarter of 2011, net income attributable to
SNC-Lavalin shareholders was $76.0 million ($0.50 per share on a diluted basis) compared to
$132.6 million ($0.87 per share on a diluted basis), excluding
the 2010 net gain after taxes of $26.1
million from the disposal of two infrastructure concession
investments.
Year Ended December 31, 2011
- For the year ended December 31,
2011, net income attributable to SNC-Lavalin shareholders
was $378.8 million ($2.49 per share on a diluted basis), compared to
$431.0 million ($2.83 per share on a diluted basis), excluding
the net gains of $45.7 million from
the disposals of certain assets and investments recognized in
2010.
- Revenues for the year ended December 31,
2011 increased by 20.3% to $7.2 billion, compared to $6.0 billion for the year ended December 31, 2010.
- Revenue backlog increased to $10.1 billion at the end of December 2011 compared to $9.7 billion at the end of December 2010. Operations & Maintenance
revenue backlog decreased by 12.9% while the Services revenue
backlog increased by 57.8% to $2.2
billion.
- Financial position remained solid with cash and cash
equivalents of $1.2 billion at
December 31, 2011.
- Return on average shareholders' equity was 19.3% for the
12-month period ended December 31,
2011.
Dividend Increase
- The Board of Directors increased the quarterly cash dividend by
4.8% to $0.22 per share for the
fourth quarter of 2011.
MONTREAL, March 26, 2012 /PRNewswire/ -
| SNC-Lavalin Group
Inc. |
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| Financial
Highlights (unaudited) |
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Fourth Quarter |
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Year ended December 31 |
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otherwise indicated) |
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2011 |
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2010 |
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2011 |
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2010 |
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| Revenues by
activity |
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Services |
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$ |
795,245 |
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$ |
601,338 |
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$ |
2,437,778 |
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$ |
2,053,787 |
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Packages |
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784,544 |
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683,454 |
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2,871,530 |
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2,137,421 |
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Operations and Maintenance |
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382,458 |
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383,619 |
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1,399,197 |
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1,330,459 |
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Infrastructure Concession Investments (ICI) |
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155,851 |
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156,745 |
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501,366 |
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472,274 |
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$ |
2,118,098 |
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$ |
1,825,156 |
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$ |
7,209,871 |
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$ |
5,993,941 |
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| Net income excluding
ICI |
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$ |
36,495 |
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$ |
104,092 |
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$ |
247,585 |
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$ |
341,770 |
| SNC-Lavalin's net income
from ICI |
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39,494 |
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54,611 |
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131,215 |
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134,896 |
| Net income
attributable to SNC-Lavalin shareholders |
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75,989 |
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158,703 |
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378,800 |
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476,666 |
| Net income attributable
to non-controlling interests |
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137 |
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2,866 |
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8,542 |
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10,723 |
| Net income |
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$ |
76,126 |
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$ |
161,569 |
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$ |
387,342 |
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$ |
487,389 |
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| Diluted earnings per
share ($) |
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$ |
0.50 |
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$ |
1.04 |
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$ |
2.49 |
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$ |
3.13 |
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| Shares outstanding (in
thousands) |
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Weighted average number of outstanding shares - Basic |
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150,924 |
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151,187 |
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150,897 |
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151,020 |
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Weighted average number of outstanding shares - Diluted |
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151,645 |
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152,454 |
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151,940 |
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152,277 |
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| Return on average
shareholders' equity (ROASE) (1) |
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19.3% |
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28.4% |
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As at
December 31 |
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As at
December 31 |
| Revenue backlog by
activity |
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2011 |
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2010 |
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Services |
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$ |
2,226,100 |
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$ |
1,410,700 |
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Packages |
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5,482,800 |
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5,572,400 |
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Operations and Maintenance |
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2,379,100 |
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2,732,800 |
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$ |
10,088,000 |
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$ |
9,715,900 |
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(1)Corresponds to the trailing 12-month net income
attributable to SNC-Lavalin shareholders, divided by a trailing
13-month average equity attributable to SNC-Lavalin shareholders,
excluding "other components of equity".
N.B.: All amounts indicated are in Canadian dollars.
SNC-Lavalin Group Inc. (TSX: SNC) announced that
Pierre Duhaime has stepped down from
his position as chief executive officer and as a director and will
retire from the Company.
"Pierre has made major contributions to the
growth and profitability of the Company during his 23 years of
dedicated service," said Gwyn
Morgan, Chairman of the Board. "The Board has accepted
his decision to step down, and we wish him well in the future. We
are proud of the 28,000 skilled and dedicated people of SNC-Lavalin
and know that they will continue their excellent service to the
Company's thousands of clients around the world."
A search for a new Chief Executive Officer will
begin immediately under the direction of the Chairman of the
Board. Both internal and external candidates will be
considered.
At the request of the other members of the
Board, Ian A. Bourne has agreed to
assume the function of Vice-Chairman and Interim Chief Executive
Officer of the Company. The Board has struck a Special Transition
Committee composed of the Chairman of the Board, the Interim CEO,
and the Chairmen of the Audit and Human Resources Committees to
assist with transitional matters, including serving as a resource
to the management team.
Mr. Bourne is a seasoned executive who has
served as a senior officer of a number of Canadian public
corporations and is well versed in the affairs of the Company
having served as a director and Audit Committee and Health, Safety
and Environment Committee member since 2009.
"I look forward to working with our employees to
build shareholder value," said Mr. Bourne. During the transition
period, Mr. Bourne will remain a director of the Company but will
temporarily step-down from Board Committees.
The Company also announced its results today for
the fourth quarter and year ended December
31, 2011 and is separately reporting today on the results of
its voluntary Independant Review.
Fourth Quarter Results
For the fourth quarter of 2011, net income
attributable to SNC-Lavalin shareholders was $76.0 million ($0.50 per share on a diluted basis), compared to
$158.7 million ($1.04 per share on a diluted basis) for the
comparable quarter in 2010, or $132.6
million ($0.87 per share on a
diluted basis), excluding the 2010 net gain after taxes of
$26.1 million from the disposal of
two infrastructure concession investments. The decrease, excluding
the 2010 net gain, mainly reflects an operating loss in the
Infrastructure & Environment and the Hydrocarbons &
Chemicals segments, mainly due to unfavourable cost reforecasts on
certain projects, a $22.4 million
loss from a revised position of the Company's net financial
position related to its Libyan infrastructure projects and period
expenses of $35 million in
Hydrocarbons & Chemicals, partially offset by higher operating
income, mainly from the Mining & Metallurgy and Operations
& Maintenance segments. The $35
million of period expenses relate to payments made under
what are presumed to be agency agreements that were charged and
documented to construction projects to which they did not relate.
Because these payments were documented to construction projects to
which they did not relate, it was determined that they would need
to be recorded as period expenses (i.e., not generating any
revenues) for accounting purposes.
Year-end Results
For the year ended December 31, 2011, net income attributable to
SNC-Lavalin shareholders was $378.8 million ($2.49 per share on a diluted basis), compared to
$476.7 million ($3.13 per share on a diluted basis) for the
comparable period in 2010, or $431.0
million ($2.83 per share on a
diluted basis) excluding the net gains of $45.7 million from the disposals of certain
assets and investments recognized in 2010. The net income from
Infrastructure Concession Investments was $131.2 million, compared to $134.9 million, mainly due to the 2010 net gain
from the disposal of two infrastructure concession investments,
partially offset by higher dividends from Highway 407. Net income,
excluding Infrastructure Concession Investments, was $247.6 million compared to $341.8 million, or $322.2
million excluding the 2010 gain from the disposal of certain
assets. This decrease mainly reflects a lower contribution from the
Infrastructure & Environment segment, partially offset by
higher contributions from all other segments. As mentioned above,
in the fourth quarter of 2011, the Company recognized a net loss of
$35 million related to payments made
in the fourth quarter of 2011, under what are presumed to be agency
agreements. It should be noted that the Company's 2010 results were
adjusted by reducing net income by $17.9
million to reflect the impact of payments of $20.0 million made in 2010, under what is
presumed to be an agency agreement. The Company decided to correct
its prior period comparative financial information in its first
issuance of annual audited consolidated financial statements
prepared in accordance to International Financial Reporting
Standards.
Revenues for the year ended December 31, 2011 increased by 20.3% to
$7.2 billion compared to $6.0 billion for the same period in 2010.
Revenues increased in all the Company's segments of activity and in
all revenue categories, with Packages revenues growing by 34.3% and
Services revenues growing by 18.7%.
Revenue backlog increased to $10.1 billion at the end of December 2011, compared to $9.7 billion at the end of December 2010. The Operations & Maintenance
revenue backlog decreased by 12.9% while the Services revenue
backlog increased by 57.8% to $2.2
billion.
The Company's financial position remained solid
with cash and cash equivalents totalling $1.2 billion at December 31, 2011.
The Company's return on average shareholders'
equity was 19.3% for the 12-month period ended December 31, 2011.
Material Weakness Disclosure
The Company has identified material weaknesses
in its internal control over financial reporting as at December 31, 2011 relating to management
override, non-compliance with and ineffective controls over
compliance with the Company's policy on commercial agents and its
code of ethics. As a result, the Company has concluded that its
disclosure controls and procedures and its internal control over
financial reporting were not effective as at December 31, 2011. These material weaknesses and
proposed remedial measures are fully described in the Company's
annual Management's Discussion and Analysis.
2012 Outlook
The Company currently expects its full year 2012
net income to be in line with full year 2011 net income, as we
expect that the Power and Mining & Metallurgy segments, mainly
based on their current backlog, and the Infrastructure Concession
Investments segment will be the main contributors to net income
while the Hydrocarbons & Chemicals and Infrastructure &
Environment segments will continue to be challenging throughout
2012. This outlook is based on the methodology described in the
Company's annual Management's Discussion and Analysis under the
heading "How We Budget and Forecast Our Results" and is subject to
the risks and uncertainties described in the Company's public
disclosure documents, including risks resulting from the
Independent Review, the results of which were separately announced
today.
Declaration of Quarterly Dividends
The Board of Directors has increased the
quarterly cash dividend by 4.8% to $0.22 per share, payable on April 12, 2012 to shareholders of record on
April 5, 2012. This dividend is an
"eligible dividend" for income tax purposes.
Conference Call
SNC-Lavalin will hold a conference call with the
financial community today at 10:00 a.m.
Eastern Daylight Time, to discuss its fourth quarter and
year ended December 31, 2011 results.
Participants will include Gwyn
Morgan, Chairman of the Board of Directors, Ian Bourne, Vice-Chairman and Interim Chief
Executive Officer and Gilles Laramée, Executive Vice-President and
Chief Financial Officer. To participate, please dial toll-free at
800-814-4859, or 416-644-3414 in Toronto, or 514-807-8791 in Montreal, or 44-20-7190-1595 in England. Please note that this call will
be accompanied by an online presentation that will be available in
the investor relations section of our website at
www.snclavalin.com, approximately one hour prior to the call. A
replay of the conference call will be available on our website,
approximately one hour after the termination of the call. Members
of the media are welcome to participate on a listen-only basis to
the investor call. Following this call, journalists are invited to
stay on the line to ask questions to Mr. Morgan and Mr. Bourne.
SNC-Lavalin (TSX: SNC) is one of the leading
engineering and construction groups in the world and a major player
in the ownership of infrastructure, and in the provision of
operations and maintenance services. SNC-Lavalin has offices across
Canada and in over 40 other
countries around the world, and is currently working in some 100
countries. www.snclavalin.com
Biographical Data
Ian A. Bourne is
Chairman of the Board of Ballard Power Systems Inc. and serves on
all its board committees. Mr. Bourne is a director of Canada Pension Plan Investment Board (CPPIB),
Canadian Oil Sands Corporation, Wajax Corporation, the Canadian
Public Accountability Board and the Calgary Foundation. Mr. Bourne
was Executive Vice-President and Chief Financial Officer of
TransAlta Corporation (1998-2005) and President and director of
TransAlta Power LP, from 1998 to 2006. Prior to joining TransAlta
he spent most of his career in the General Electric Company,
including four years as Chief Financial Officer of GE Capital. He
obtained his Bachelor of Commerce Degree at Mount Allison University in 1969. He is a member of
the Institute of Corporate Directors, having completed the Director
Education Program in February 2006
and was awarded the ICD designation in April of the same year and
recognized as a Fellow of the Institute of Corporate Directors in
June 2011.
Reference in this press release, and hereafter, to the
"Company" or to "SNC-Lavalin" means, as the context may require,
SNC-Lavalin Group Inc. and all or some of its subsidiaries or joint
ventures, or SNC-Lavalin Group Inc. or one or more of its
subsidiaries or joint ventures. Statements made in this press
release that describe the Company's or management's budgets,
estimates, expectations, forecasts, objectives, predictions or
projections of the future may be "forward-looking statements",
which can be identified by the use of the conditional or
forward-looking terminology such as "anticipates", "believes",
"estimates", "expects", "may", "plans", "projects", "should",
"will", or the negative thereof or other variations thereon.
The Company cautions that its actual actions and/or results could
differ materially from those expressed or implied in
forward-looking statements, or could affect the extent to which a
particular projection materializes, as a result of risks and
uncertainties relating to: (a) cost overruns from fixed-price
contracts; (b) failure to meet scheduled dates or performance
standards on a particular project; (c) attracting and retaining
qualified personnel and any strike, partial work stoppage or other
labour actions by the Company's or its subcontractors' unionized
employees; (d) failure of the Company's joint venture partners to
perform their obligations; (e) failure by the Company's
subcontractors to deliver their portion of a particular project
according to contractual terms; (f) the financial performance of
the Company's infrastructure concession investments during a
particular concession period; (g) the Company obtaining new
contract awards; (h) revenue backlog and whether such revenue
backlog will ultimately result in earnings and when revenues and
earnings from such backlog will be recognized; (i) foreign currency
exchange and interest rates; (j) credit risk and the delay in
collection from the Company's clients; (k) information management
including its integrity, reliability and security; (l) the inherent
limitations of the Company's control framework and the
effectiveness of the measures implemented by the Company to
strengthen its internal controls over financial reporting following
the identification by the Company of material weaknesses relating
to the design and operational effectiveness of its internal
controls over financial reporting as of December 31, 2011; (m)
uncertain economic and political conditions in the countries in
which the Company does business; (n) any lack of strong safety
practices by the Company or its subcontractors exposing the Company
to lost time on projects, penalties, lawsuits and impact on future
contract awards; (o) the Company's inability to comply with
environmental laws and regulations; (p) the Company's reputation as
a result of, among others, any quality or performance issues on its
projects, a poor health and safety record, non-compliance with laws
or regulations by the Company's employees, agents, subcontractors,
suppliers and/or partners, or creation of pollution and
contamination; (q) the inability to adequately integrate an
acquired business in a timely manner; (r) non-compliance with laws
and regulations by an employee, agent, supplier, subcontractor
and/or partner of the Company or any further regulatory
developments; (s) failure by the Company's employees, agents,
suppliers, subcontractors and/or partners to comply with
anti-bribery laws; (t) any litigation and/or legal matters to which
the Company is a party; (u) any negative publicity associated with
the Independent Review led by the Company's Audit Committee of the
facts and circumstances surrounding certain payments that were
documented to construction projects to which they did not relate,
and certain other contracts, as well as any sanctions that could be
brought against the Company in connection with possible violations
of law or contracts should additional facts adverse to the Company
become known in connection with such Independent Review including
as to matters beyond its scope; (v) the proposed class action
lawsuit filed on March 1, 2012 against the Company with the Quebec
Superior Court; and (w) the investigations of the Royal Canadian
Mounted Police and the World Bank relating to the Company's
involvement in a past submission as the Owner's Engineer for the
Bangladesh government.
For more information on risks and uncertainties, and assumptions
that would cause the Company's actual results to differ from
current expectations, please refer to the section "Risks and
Uncertainties" and the section "How We Analyze and Report our
Results", respectively, in the Company's 2011 Financial Report
under "Management's Discussion and Analysis". 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 any obligation to update publicly or
to revise any such forward-looking statements, unless required by
applicable legislation or regulation.
|
SNC-Lavalin's Consolidated Financial Statements and Management's
Discussion and Analysis and other relevant financial materials are
available in the Investor Relations section of the Company's
website at www.snclavalin.com. These and other Company's reports
are also available on the website maintained by the Canadian
Securities regulators at www.sedar.com.
SOURCE SNC-LAVALIN