January 25, 2005

Churchill warns cost of new plant, lost contracts will cut profit by $4.5M

EDMONTON

The Churchill Corp. has warned that higher startup costs at a new plant and lost contracts will take a $4.5-million bite out of the construction company’s profits in the latest quarter.

Churchill said that startup costs at the Edmonton company’s new fabrication plant, combined with losses on fabrication contracts in its Triton division, have been $4.5 million higher than expected.

The losses will squeeze fourth quarter earnings, said Hank Reid, the company’s interim CEO.

“The corporation is investing considerable resources to streamline process efficiency and improve control at the fabrication plant,” Churchill said. “Process changes have been implemented and significant gains have been achieved to date. Triton will limit plant through-put to allow for completion of these changes and will not gear up to full capacity until consistent profitability has been demonstrated.”

Churchill provides building construction, heavy-industrial general contracting and maintenance services throughout western Canada. The company lost $3.7 million on revenues of $320 million in 2003 and employed about 1,000 people at that time.

The Canadian Press

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