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|06 December, 2018

Atkins' Middle East CEO, design chief to depart

Employee numbers in SNC Lavalin's Middle East business have dropped by more than 2,000 since last year's deal announcement

Image used for illustrative purpose. A pedestrian walks past the SNC-Lavalin Group Inc., headquarters in Montreal, May 7, 2009.

Image used for illustrative purpose. A pedestrian walks past the SNC-Lavalin Group Inc., headquarters in Montreal, May 7, 2009.

REUTERS/Christinne Muschi

Two of the most senior figures in the Atkins building consultancy firm in the Middle East are set to leave the business, Zawya understands.

Atkins' Middle East and Africa CEO Simon Moon, and the managing director of the region's design and engineering business, Phil Malem, have both resigned from the firm, a spokesman confirmed. Moon has been with Atkins for more than 20 years, and had been CEO of its Middle East operations for more than five years. Malem has worked in the region for the firm for eight years.

Atkins was acquired by Canadian firm SNC Lavalin in a deal worth 4.2 billion Canadian dollars ($3.1 billion) that completed in July last year.

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At the time the deal was announced in April 2017, the company said it would create an organisation with global revenues of C$12.1 billion and a workforce of around 53,000 employees. An investor document accompanying its announcement showed that the Middle East and Africa was the biggest of the combined entity's four regions in employee terms, with 19,625 staff - 17,000 of whom were legacy SNC Lavalin staff. However, the region only generated 17 percent of its total revenues.

Regional staff numbers have dropped to around 17,000 at the end of November, a spokesman confirmed to Zawya, who said this was partly due to the completion of a major project in Mozambique, which led to a big drop in employee numbers in the country. He also said it was partly due to the timing of the numbers used in the presentation, with the 17,000 legacy number used for SNC Lavalin already having declined by the time the deal was actually announced.

"In business such as ours, our numbers always fluctuate a couple of percentage points according to client demand," the spokesman said. "This movement is actually quite normal."

The spokesman added that global employee numbers had remained fairly constant at around 52,000 globally.

SNC Lavalin had five business arms prior to the Atkins takeover - Infrastructure, Oil & Gas, Nuclear, Mining and Clean Power - and created a sixth following the deal, known as Engineering, Design and Project Management (EDPM). The spokesman said that some staff had moved from one division into another following the merger, but added that numbers within EDPM had marginally increased in the Middle East and Africa region since the first quarter of the year. The division employs almost 2,100 staff in the region.

Last month, SNC Lavalin reported net income for the third quarter of 2018 of $120.7 million – a 16.5 percent increase on Q3 2017, which was the first quarterly reporting period for the combined entity.

The company's president and chief executive officer, Neil Bruce, said in a press statement announcing the results that the merger had delivered "$124 million of cost synergies", and we are starting to realize revenue synergies".

The company declared revenue of C$2.56 billion for the quarter - a 2.6 percent decline on the same period last year.

(Reporting by Michael Fahy; Editing by Anoop Menon)
(michael.fahy@refinitiv.com)

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© ZAWYA 2018