The Financial Post reports in its Saturday edition that SNC-Lavalin's past continues to haunt the engineering giant, and investors are not happy.
Postmedia's Frederic Tomesco writes that SNC on Friday reported a third-quarter net loss of $85.1-million compared with year-ago profit of $2.76-billion, when results were bolstered by the sale of a minority share of Ontario's Highway 407. The loss reflects a $58-million arbitration ruling against the company on a long-completed fixed-price construction project, which SNC did not identify, as well as lower productivity caused by COVID-19 safety protocols.
Investors reacted negatively to the news, pushing down SNC's shares by as much as 14 per cent in Toronto. The stock has now lost about 40 per cent of its value since the start of the year. It ended the day at $18.64, down 9.8 per cent.
Investors will be "disappointed by the continued lump-sum turnkey losses," Benoit Poirier, a Desjardins Capital Markets analyst, said in a note to clients. He called the results "weak."
SNC is in the midst of a strategic overhaul that has seen the company stop bidding on fixed-price construction work. Additional hygiene breaks and travel constraints are also affecting productivity.
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