SNC-Lavalin announces its results for the third quarter and nine-month period ended September 30, 2012

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Nov 02, 2012, 08:45 ET

Highlights

For the third quarter of 2012, net income attributable to SNC-Lavalin shareholders was $114.9 million ($0.76 per share on a diluted basis), compared to $124.5 million ($0.82 per share on a diluted basis) for the comparable quarter of 2011.
For the nine-month period ended September 30, 2012, net income attributable to SNC-Lavalin shareholders was $214.5 million ($1.42 per share on a diluted basis), compared to $302.8 million ($1.99 per share on a diluted basis) for the same period of 2011.
Net income excluding Infrastructure Concession Investments was $84.0 million for the third quarter of 2012, compared to $98.9 million for the corresponding period of 2011. SNC-Lavalin's net income from Infrastructure Concession Investments was $30.9 million for the third quarter ended September 30, 2012, compared to $25.6 million for the same quarter of 2011.
Revenues for the nine-month period ended September 30, 2012, increased by 11.3% to $5.7 billion, compared to $5.1 billion for the same period of 2011.
Revenue backlog remained strong, totalling $9.9 billion at the end of September 2012, compared to $10.1 billion at the end of December 2011.
Financial position remained solid with cash and cash equivalents of $1.1 billion at September 30, 2012.
Return on average shareholders' equity was 14.2% for the 12-month period ended September 30, 2012.
The Board of Directors declared a cash dividend of $0.22 per share for the third quarter of 2012.

MONTREAL, Nov. 2, 2012 /CNW Telbec/ -

SNC-Lavalin Group Inc.
Financial Highlights (unaudited)

		Third Quarter				Nine months ended September 30
(in thousands of Canadian dollars, unless otherwise indicated)		2012		2011⁽¹⁾		2012		2011⁽¹⁾

Revenues by activity
	Services	$	797,695	$	597,992	$	2,253,760	$	1,642,533
	Packages		745,549		758,211		2,065,657		2,086,986
	Operations and Maintenance		304,488		308,284		981,078		1,016,739
	Infrastructure Concession Investments (ICI)		127,517		115,031		368,922		345,515
		$	1,975,249	$	1,779,518	$	5,669,417	$	5,091,773


Net income excluding ICI		$	83,945	$	98,944	$	127,940	$	211,090
SNC-Lavalin's net income from ICI			30,908		25,597		86,536		91,721
Net income attributable to SNC-Lavalin shareholders			114,853		124,541		214,476		302,811
Net income (loss) attributable to non-controlling interests			(130)		3,010		287		8,405
Net income		$	114,723	$	127,551	$	214,763	$	311,216


Diluted earnings per share ($)		$	0.76	$	0.82	$	1.42	$	1.99


Shares outstanding (in thousands)
	Weighted average number of outstanding shares - Basic		151,035		150,889		151,061		150,888
	Weighted average number of outstanding shares - Diluted		151,175		151,800		151,331		152,027


Return on average shareholders' equity (ROASE) ⁽²⁾							14.2%		24.1%

Revenue backlog by activity						As at September 30 2012		As at December 31 2011
	Services					$	2,125,700	$	2,226,100
	Packages						5,453,600		5,482,800
	Operations and Maintenance						2,346,300		2,379,100
						$	9,925,600	$	10,088,000

⁽¹⁾	Refer to Note 14 to the unaudited interim condensed consolidated financial statements of the third quarter of 2012 for explanations relating to comparative figures.
⁽²⁾	Corresponds to the trailing 12-month net income attributable to SNC-Lavalin shareholders, divided by a trailing 13-month average equity attributable to SNC-Lavalin shareholders, excluding "other components of equity".

N.B.: All amounts indicated are in Canadian dollars.

SNC-Lavalin Group Inc. (TSX: SNC) announced its results today for the third quarter and nine-month period ended September 30, 2012.

Third Quarter Results
For the third quarter of 2012, net income attributable to SNC-Lavalin shareholders was $114.9 million ($0.76 per share on a diluted basis), compared to $124.5 million ($0.82 per share on a diluted basis) for the comparable quarter of 2011. The net income excluding Infrastructure Concession Investments ("ICI") was $84.0 million, compared to $98.9 million for the third quarter of 2011, mainly reflecting a lower contribution from the Infrastructure & Environment segment, partially offset by higher contributions from the Operations & Maintenance and Mining & Metallurgy segments. The net income from ICI increased to $30.9 million, compared to $25.6 million for the third quarter of 2011, mainly due to higher net income from AltaLink, partially offset by lower net income from Shariket Kahraba Hadjret En Nouss S.p.A. ("SKH").

For the third quarter of 2012, revenues increased by 11.0% to $2.0 billion, mainly due to an increase of 33.4% in the Services category.

Year-to-Date Results
For the nine-month period ended September 30, 2012, net income attributable to SNC-Lavalin shareholders was $214.5 million ($1.42 per share on a diluted basis), compared to $302.8 million ($1.99 per share on a diluted basis) for the same period of 2011. The net income excluding ICI was $128.0 million, compared to $211.1 million for the first nine months of 2011, mainly reflecting lower contributions from the Infrastructure & Environment, Power and Hydrocarbons & Chemicals segments, partially offset by a higher contribution from the Mining & Metallurgy segment. The net income from ICI decreased to $86.5 million, compared to $91.7 million for the nine-month period ended September 30, 2011, mainly due to lower dividends from Highway 407, as a special dividend of $18.5 million was declared and paid to the Company in the second quarter of 2011, as well as lower net income from SKH, partially offset by higher net income from AltaLink.

The Company's financial position remained solid with cash and cash equivalents totalling $1.1 billion as at September 30, 2012.

Revenues for the nine-month period ended September 30, 2012, increased by 11.3% to $5.7 billion, compared to $5.1 billion for the same period of 2011, mainly due to an increase of 37.2% in the Services category.

Revenue backlog remained strong at $9.9 billion at the end of September 2012, compared to $10.1 billion at the end of December 2011.

The Company's return on average shareholders' equity was 14.2% for the 12-month period ended September 30, 2012.

"Since I arrived, I have been very impressed by the great capacity of SNC-Lavalin's employees and their dedication to our clients," said Bob Card, President and Chief Executive Officer, SNC-Lavalin Group Inc. "Over the coming months I will continue to review our strategy with the goal of ensuring this Company continues to grow and be successful by serving the needs of its clients, employees, and shareholders."

2012 Outlook
The Company is maintaining its previously announced 2012 Outlook for which the 2012 net income is expected to be in a range of $325 million to $340 million. This Outlook continues to be based on (i) the expectation that the Power and Mining & Metallurgy segments, mainly based on their current backlog, and the Infrastructure Concession Investments segment will be the main contributors to net income, while the Hydrocarbons & Chemicals and Infrastructure & Environment segments will continue to be challenging throughout 2012, and (ii) the methodology described in the Company's 2011 Management's Discussion and Analysis under the heading "How We Budget and Forecast Our Results", and which remains subject to the risks and uncertainties described in the Company's public disclosure documents.

Quarterly Dividends
The Board of Directors today declared a cash dividend of $0.22 per share, payable on November 30, 2012, to shareholders of record on November 16, 2012. This dividend is an "eligible dividend" for income tax purposes.

SNC-Lavalin is one of the leading engineering and construction groups in the world and a major player in the ownership of infrastructure, and in the provision of operations and maintenance services. Founded in 1911, SNC-Lavalin has offices across Canada and in over 40 other countries around the world, and is currently working in some 100 countries. www.snclavalin.com

Reference in this press release, and hereafter, to the "Company" or to "SNC-Lavalin" means, as the context may require, SNC-Lavalin Group Inc. and all or some of its subsidiaries or joint ventures, or SNC-Lavalin Group Inc. or one or more of its subsidiaries or joint ventures. Statements made in this press release that describe the Company's or management's budgets, estimates, expectations, forecasts, objectives, predictions or projections of the future may be "forward-looking statements", which can be identified by the use of the conditional or forward-looking terminology such as "anticipates", "believes", "estimates", "expects", "may", "plans", "projects", "should", "will", or the negative thereof or other variations thereon.

The 2012 outlook referred to in this press release is forward-looking information and is based on the methodology described in the Company's 2011 Management's Discussion and Analysis under the heading "How We Budget and Forecast Our Results" and is subject to the risks and uncertainties described in the Company's public disclosure documents, including risks resulting from the Independent Review and the Company's continuing review of compliance matters. The purpose of the 2012 outlook is to provide the reader with an indication of management's expectations, at the date of this press release, regarding the Company's future financial performance and readers are cautioned that this information may not be appropriate for other purposes.

The Company cautions that its actual actions and/or results could differ materially from those expressed or implied in forward-looking statements, or could affect the extent to which a particular projection materializes, as a result of risks and uncertainties relating to: (a) cost overruns from fixed-price contracts; (b) failure to meet scheduled dates or performance standards on a particular project; (c) attracting and retaining qualified personnel and any strike, partial work stoppage or other labour actions by the Company's or its subcontractors' unionized employees; (d) failure of the Company's joint venture partners to perform their obligations; (e) failure by the Company's subcontractors to deliver their portion of a particular project according to contractual terms; (f) the financial performance of the Company's infrastructure concession investments during a particular concession period; (g) the Company obtaining new contract awards; (h) revenue backlog and whether such revenue backlog will ultimately result in earnings and when revenues and earnings from such backlog will be recognized; (i) foreign currency exchange and interest rates; (j) credit risk and the delay in collection from the Company's clients; (k) information management including its integrity, reliability and security; (l) the inherent limitations of the Company's control framework and the effectiveness of the measures implemented by the Company to strengthen its internal controls over financial reporting following the identification by the Company of material weaknesses relating to the design and operational effectiveness of its internal controls over financial reporting; (m) uncertain economic and political conditions in the countries in which the Company does business; (n) any lack of strong safety practices by the Company or its subcontractors exposing the Company to lost time on projects, penalties, lawsuits and impact on future contract awards; (o) the Company's inability to comply with environmental laws and regulations; (p) the Company's reputation as a result of, among others, any quality or performance issues on its projects, a poor health and safety record, non-compliance with laws or regulations by the Company's employees, agents, subcontractors, suppliers and/or partners, or creation of pollution and contamination; (q) the inability to adequately integrate an acquired business in a timely manner; (r) non-compliance with laws and regulations by an employee, agent, supplier, subcontractor and/or partner of the Company or any further regulatory developments; (s) failure by the Company's employees, agents, suppliers, subcontractors and/or partners to comply with anti-bribery laws; (t) any litigation and/or legal matters to which the Company is a party; (u) any negative publicity associated with the Independent Review led by the Company's Audit Committee of the facts and circumstances surrounding certain payments that were documented to construction projects to which they did not relate, and certain other contracts, as well as any sanctions that could be brought against the Company in connection with possible violations of law or contracts should additional facts adverse to the Company become known in connection with such Independent Review including as to matters beyond its scope; (v) the class action lawsuits against the Company with the Ontario Superior Court and the Quebec Superior Court; and (w) the investigations of the Royal Canadian Mounted Police and the World Bank principally relating to an unsuccessful bid by a subsidiary to act for the Bangladeshi government in supervising a project contractor.

For more information on risks and uncertainties, and assumptions that would cause the Company's actual results to differ from current expectations, please refer to the section "Risks and Uncertainties" and the section "How We Analyze and Report our Results", respectively, in the Company's 2011 Financial Report under "Management's Discussion and Analysis" and the section "Risks and Uncertainties" in the Company's third quarter 2012 Management's Discussion and Analysis. The forward-looking statements herein reflect the Company's expectations as at the date of this press release and are subject to change after this date. The Company does not undertake any obligation to update publicly or to revise any such forward-looking statements, unless required by applicable legislation or regulation.

SNC-Lavalin's Consolidated Financial Statements and Management's Discussion and Analysis and other relevant financial materials are available in the Investor Relations section of the Company's website at www.snclavalin.com. These and other Company reports are also available on the website maintained by the Canadian Securities regulators at www.sedar.com.

SOURCE: SNC-LAVALIN