November 10, 2009

SNC-Lavalin profits up, revenues slide

SNC-Lavalin saw third-quarter revenue slide from year-ago levels while posting an increase in year-over-year profit due to an expected boost in gross margins for its fixed-price contracts.

The Montreal-based engineering and construction company reported net income of $103.1 million for the quarter ended Sept. 30, up from a year-earlier profit of $91.3 million. Quarterly revenue totalled $1.4 billion, slipping from $1.7 billion last year.

The increase in net income for the quarter was largely due to an increase in margin from primarily fixed-price contracts involving one or more of its services, despite lower revenue from that activity.

They accounted for $472.5 million in revenue during the quarter, down from $791.4 million a year earlier. Services revenue fell less precipitously to $535.6 million from $548.7 million, operations and maintenance revenue increased to $311.9 million from $249.6 million and infrastructure investments brought in $102.3 million, up from $95.6 million.

The company said total backlog remained solid at $10.2 billion at the end of the quarter, compared to $9.7 billion last year.

“Our list of prospects is promising, which bodes well for 2010,” said Pierre Duhaime, the company’s president and chief executive officer.

Canadian Press

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