Advertisement
| 09 August, 2018

Canadian firm SNC-Lavalin says prolonged Saudi rift will impact financial performance

Saudi Arabia accounted for 11 percent of the engineering company’s revenues in 2017

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

09 August 2018
Canadian engineering company SNC-Lavalin said on Thursday that a prolonged embargo on Canadian commercial interests in Saudi Arabia could impact the company's future financial performance.

The company said in a statement posted on its website that it is studying the possible implications of the dispute between Canada and Saudi Arabia "on current or proposed transactions between SNC-Lavalin Group companies and customers controlled by the Kingdom of Saudi Arabia."

"If a widespread commercial embargo on Canadian commercial interests in the Kingdom of Saudi Arabia were to be implemented on a prolonged basis, there will be an impact on our future financial performance," the statement noted.

Advertisement

The diplomatic row between the two countries stems from the Canadian foreign minister's Twitter posts last week expressing concern over the arrest of activists in Saudi Arabia, including women's rights campaigner Samar Badawi, and calling for their release. Saudi Arabia retaliated on Sunday by recalling its ambassador to Canada and asking the Canadian ambassador to leave the country within 24 hours, while putting a freeze on all new trade with the North American country.

According to the company's fiscal 2017 Management Discussion & Analysis report, Saudi Arabia was its fourth biggest contributor to 2017 revenues, led by oil and gas deals and income of global design and engineering firm Atkins, whose acquisition by SNC-Lavalin was completed in July 2017.

The kingdom accounted for 11 percent (992.2 million Canadian dollars) of the total revenues of 9.3 billion Canadian dollars ($7.13 billion) reported for the fiscal year ended December 2017. The rest of the Middle East accounted for 7 percent of the revenues.

SNC-Lavalin said in the statement that it valued its five-decade-old presence in kingdom and "hopes to be able to continue working with our local partners, suppliers and staff to contribute to critical building, infrastructure, operations and support for Saudi Arabian industry."

In May, the company was awarded an engineering, procurement and construction (EPC) contract by Central District Cooling Company, a subsidiary of Saudi Tabreed, for the expansion of its Jabal Omar Development Company (JODC) district cooling scheme in Makkah.

In April, it was awarded a multi-million dollar installation contract by Saudi Aramco for Wasit Gas Plant, one of the largest gas plants to come on-stream in Saudi Arabia.

In July, the company announced it had signed a five-year framework agreement to provide engineering services to Kuwait-Saudi joint venture Al Khafji Joint Operations (KJO). KJO is responsible for oil and gas exploration, development and production in the off-shore area close to the Saudi-Kuwait border, including the Khafji and Hout Oil Fields.

(Writing by Anoop Menon; Editing by Shane McGinley)

(anoop.menon@thomsonreuters.com)

© Thomson Reuters Projects News 2018