SNC-Lavalin Reports Significantly Higher Earnings

By Judy McKinnon 

SNC-Lavalin Group Inc. raised its quarterly dividend and reported significantly higher fourth-quarter earnings on the back of a hefty gain related to the sale of its AltaLink power transmission unit.

The Montreal-based engineering and construction company also posted a 33% improvement in revenue, to 2.8 billion Canadian dollars ($2.3 billion), fueled in part by its acquisition of U.K.-based Kentz Corp., which provides engineering services to the resource sector.

SNC sold AltaLink last year to Berkshire Hathaway Energy for C$3.2 billion as part of its plan to move away from infrastructure investments to focus on its key engineering and construction operations. It closed its C$2.1 billion purchase of Kentz in August.

Earnings for the quarter rose to C$1.15 billion, or C$7.51 a share, fueled in part by a gain of C$8.65 a share on AltaLink, offset slightly by C$1.55-a-share of restructuring charges. Earnings in the year-earlier quarter were C$92.5 million.

Adjusted to exclude items, SNC said earnings were largely steady at about C$106.7 million.

Late last year, SNC announced it would cut 4,000 jobs and record significant charges as part of a restructuring aimed partly at battling a global slowdown in mining. It said overall charges related to the restructuring and right-sizing plan totaled C$263 million in the quarter.

SNC said it has raised its dividend to 25 Canadian cents a share, citing its long-term outlook, cash position, backlog and opportunities. It also guided for 2015 earnings in the range of C$1.60 and C$1.90 a share.

SNC continues to deal with the fallout from corruption allegations that surfaced three years ago. Just last month, Canadian police filed criminal charges against the company related to those corruption allegations, charges SNC said should instead be targeted at former employees who have left the company.

Write to Judy McKinnon at [e-mail]

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