MONTREAL—Engineering giant SNC-Lavalin Inc. has lowered its its earnings forecast for fiscal 2013, party due to a $75-million charge related to restructuring its European operations.
The Montreal-based company said it expects consolidated net income in fiscal 2013 to be between $10 million to $50 million, as compared to the previous guided range of $220 million to $235 million.
SNC-Lavalin says it recorded unfavourable cost reforecasts “In the third quarter on certain unprofitable fixed price contracts in North Africa and in the hospital and road sectors.
The company says it believes these cost reforecasts, which relate mostly to projects already in a loss position, are one-time events not expected to further affect future profitability.
In addition, the company expects its outlook to be impacted by further softness in commodity markets.
“Certain legacy fixed-price contracts entered into by the company between 2010 and 2012 and the ongoing softness in the mining sector unfortunately continue to stress our performance in 2013,” said president and CEO Robert G. Card.
“Going forward, we will remain focused on winning and delivering high margin projects and implementing measures to restore our SG&A to historical levels, or better, with the aim of better positioning SNC-Lavalin for growth.”
SNC-Lavalin will announce its third quarter results on Nov. 1.