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|11 February, 2019

Canada's SNC Lavalin cuts profit forecast again due to mining dispute

The company now expects its 2018 adjusted profit to be in the range of C$1.20 to C$1.35 per share

Canadian construction and engineering firm SNC-Lavalin Group Inc SNC.TO on Monday cut its full-year profit forecast for the second time because of a dispute related to its mining and metallurgy project in Latin America.

The company said the challenges on the project are mainly due to unexpected site conditions, environmental and safety measures, and underperformance from sub-contractors.

Due to the negative impact from the project, the core earnings for the fourth quarter from its mining and metallurgy unit could slip to a loss of up to C$350 million, the company said.

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SNC-Lavalin said it aims to complete the project in the second quarter of 2019 as it has agreed to settle the dispute with the help of an independent third party.

The company now expects its 2018 adjusted profit to be in the range of C$1.20 to C$1.35 per share, down from the prior forecast of C$2.15 to C$2.30 per share. 

SNC had earlier cut its profit forecast in January, citing troubles related to the project and ongoing trade challenges in Saudi Arabia. 

The company is set to report its fourth-quarter results on Feb.22.

(Reporting by Shanti S Nair in Bengaluru; Editing by Arun Koyyur) ((ShantiS.Nair@thomsonreuters.com; +1 646 223 8780 Ext: 9897; Reuters Messaging: shantis.nair.thomsonreuters.com@reuters.net))

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