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MONTREAL – In the midst of a scandal that shook the Liberal government in Ottawa, the head of SNC-Lavalin Group Inc. said he was tired of seeing his employees "used as a puck in a political hockey game ".
"Frankly, they do not deserve it, and we have enough," chief executive Neil Bruce said Friday after cutting the company's dividend and announcing its biggest quarterly losses in at least two decades.
The besieged engineering and construction giant was the victim of a fire storm that erupted earlier this month when The Globe and Mail announced that the Prime Minister's Office was pressuring Former Attorney General, Jody Wilson-Raybould, to bring prosecutors to negotiate with the company.
The company was seeking to negotiate a prosecution agreement on charges of fraud and corruption related to commercial relations with the now overthrown Moamer Kadhafi regime in Libya.
In a video released Friday by SNC on SNC, President and CEO Neil Bruce said the company was seeking a turnaround agreement to avoid a criminal lawsuit, but had not asked that accusations of fraud and corruption are dropped.
"It's not easy for me, for the management team or for all our dedicated and hardworking employees to see the SNC-Lavalin name effectively in the media many times, as was the case in recent weeks, "said Bruce in the interview with Daniela Pizzuto, director of external communications for SNC.
"This is more of a political inquiry … I want to say categorically that we have done nothing wrong as a company. And none of our employees did anything wrong as a business. "
Bruce said that he did not leave much hope for a repair agreement, which would allow SNC-Lavalin to avoid a criminal trial in exchange for fines and damages. other penalties.
"It's certainly at their discretion," he said. "But frankly, it does not look like that today."
SNC-Lavalin trimmed its dividend by 65% Friday, announcing a loss of $ 1.6 billion in the fourth quarter.
It will now pay a quarterly dividend of 10 cents per share, against 28.7 cents previously.
Bruce said that the problems encountered on a mining project in Chile were "incredibly disappointing", pointing out that the mining and metallurgy and oil and gas sectors had underperformed, which caused two profit warnings earlier this year.
Diplomatic tensions between Canada and Saudi Arabia have compromised future contracts in the Middle East kingdom, said Bruce last month after announcing a $ 1.24 billion impairment charge related to oil activities and gas from SNC-Lavalin.
The January 28 announcement, combined with information on delays in the Chilean mining project and a loss of arbitrage in Australia, pushed the stock down to 27% to close at $ 35.01, their lowest since September. 2012.
The analyst Derek Spronck of RBC Dominion Securities advised investors to "keep calm and continue."
"There are still many challenges for SNC, but we do not consider any of them as insurmountable and reflecting only in the current course of action," he said Friday in a statement. a research note.
A criminal case could result in a ban of up to 10 years for federal contracts.
Bruce pointed out that until a conviction is pronounced, the company is not subject to any auction restrictions in Canada.
"Basically, they do not penalize you until you are convicted."
"This surplus continues to be there," he added, "and US competitors … use that against us."
Analysts have mentioned the sale of part of the company's 16.77% stake in Ontario's Highway 407 ETR in 2019. The company is considering a partial sale since at least six months, which would give it a portion of 2.2 billion US dollars, according to some analysts. the stake is worth it.
The loss of the Montreal company for the fourth quarter amounted to $ 9.11 per diluted share. This compared to earnings of $ 52.4 million or 30 cents per diluted share in the fourth quarter of 2017.
Revenues totaled $ 2.56 billion, against $ 2.92 billion.
On an adjusted basis, SNC recorded a loss of $ 1.31 per diluted share, compared to adjusted earnings of 98 cents per diluted share a year ago.
Analysts on average expected a loss of $ 1.19 per diluted share, according to Thomson Reuters Eikon.
SNC rejected multiple interview requests from BNN Bloomberg this week.
With BNN Bloomberg files
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