SNC-Lavalin looks to sell its global HQ in Montreal
The engineering firm has trimmed $95.3 million in costs so far this year, but its earnings plummeted in the third quarter
The engineering and construction company said it remains committed to Quebec’s largest city and its activities in the province, but it is looking to sell the 21-floor downtown building and adjacent land and then lease back office space as part of its drive to cut costs.
“With our employees spread out over seven locations in Montreal, our goal is to regroup into fewer locations and modernize our workplace,” CEO Neil Bruce said Thursday during a conference call about its third-quarter results.
SNC-Lavalin has trimmed $95.3 million in costs over nine months of the year, near its $100-million goal for the entire year.
But while it has made progress on costs, the company said its earnings plummeted in the third quarter due to unfavourable conditions at two oil and gas projects in the Middle East that the company has previously warned would hurt its 2016 results.
SNC earned $43.3 million or 29 cents per diluted share for the three months ended Sept. 30, compared with $224.2 million or $1.49 per diluted share a year ago when it recorded a $145.7-million gain from the sale of its stake in the Ambatovy Nickel Mine Project in Madagascar.
Excluding one-time items, SNC-Lavalin earned $67 million or 45 cent per diluted share, down from $115.8 million or 78 cents per share a year earlier. The decrease was mainly due to challenges at the Middle East oil and gas projects.
Revenue fell 11 per cent to $2.68 billion.
Bruce said the Champlain Bridge project in Montreal is slightly ahead of schedule and its $5.3 billion in infrastructure backlog will keep it busy in 2017, while it bids on new opportunities across the country.
“When we look at the projects that are slated they are also in our sweet spot of rail and transit,” he noted.
SNC-Lavalin maintained its earnings guidance for the year of $1.30 to $1.60 per share, which was cut in September when it warned of a difficult third quarter.