MONTREAL — SNC-Lavalin Group Inc. is restructuring its resources business with a goal of returning the segment to profitability next year while its overall operations lost less money in the second quarter.
The Montreal-based company says it will focus only on profitable parts of the resources business in nine countries in the Americas and Middle East with the number of segment employees shrinking 60 per cent to 6,000 by the end of 2021.
SNC announced the move as it reported a net loss of $111.6 million or 64 cents per diluted share for the three months ended June 30, compared with a loss of $2.12 billion or $12.07 per share a year earlier. This quarter’s loss includes $47.3 million of restructuring costs mainly related to the resources services transformation.
The adjusted loss improved to $31.6 million or 18 cents per share, versus a loss of $234.2 million or $1.34 per share in the second quarter of 2019.
Revenues decreased 14.5 per cent to $1.95 billion from $2.28 billion in the prior year.
The company was expected to report six cents per share in adjusted profits on $2 billion of revenues, according to financial markets data firm Refinitiv.
“The unprecedented economic situation precipitated by COVID-19 and the downturn in oil prices has demonstrated that we made the right decision in changing our business model and exiting lump-sum turnkey contracting to focus on our core engineering services strengths,” stated CEO Ian Edwards.
This report by The Canadian Press was first published July 31, 2020.
Companies in this story: (TSX:SNC)
The Canadian Press