The Globe and Mail reports in its Saturday edition SNC-Lavalin Group is grappling with a series of fixed-price contracts that it is trying to close out as it posted an unexpected loss in its latest quarter.
The Globe's Nicolas Van Praet writes that the stock fell 9.8 per cent to close at $18.64 in heavy trading Friday in Toronto, a six-month low. An arbitration ruling that went against SNC on a decade-old, unnamed resources project cost the company $57.9-million, contributing to a loss of $85.1-million or 48 cents a share for the third quarter. SNC is now reviewing the legal risks on all of its legacy projects to get a better handle on what it faces.
Ten months after striking a deal with federal prosecutors to settle a criminal corruption scandal, chief executive officer Ian Edwards is trying to reshape SNC into a company that does more consultancy and project management-type work while closing out billions of dollars worth of higher-risk construction contracts.
The latest results show that the road to clearing off those projects might not be a smooth one. Analysts had been expecting SNC to post a profit on an adjusted basis of 17 cents for its third quarter, instead of the adjusted loss of 33 cents it reported.
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