on November 6, 2014 in Montreal. SNC-Lavalin Group is cutting its quarterly dividend for shareholders by 80 per cent as the troubled construction and engineering company grapples with a $2.12 billion net loss in its second quarter. THE CANADIAN PRESS/Paul Chiasson

on November 6, 2014 in Montreal. SNC-Lavalin Group is cutting its quarterly dividend for shareholders by 80 per cent as the troubled construction and engineering company grapples with a $2.12 billion net loss in its second quarter. THE CANADIAN PRESS/Paul Chiasson

New SNC-Lavalin CEO says plea deal unlikely despite Liberal election win

SNC-Lavalin shares shot up 14 per cent the day after an Oct. 21 Liberal election win

The head of SNC-Lavalin Group Inc. says he is not expecting a plea deal on criminal charges against the engineering firm in the wake of the Liberal election victory.

“We kind of remain focused on defending ourselves through a court process,” said Ian Edwards, regarding an upcoming trial on bribery and corruption charges linked to SNC-Lavalin’s alleged dealings in Libya between 2001 and 2011.

“Obviously if there were opportunities for settling this in another way, we’d be open to that. But we don’t expect it,” he said on a conference call with investors Thursday.

SNC-Lavalin shares shot up 14 per cent the day after an Oct. 21 Liberal election win, which left the door open to a deferred prosecution agreement that would head off criminal prosecution.

Attorney General David Lametti has refused to shut down the possibility of such an agreement, which would drop the charges against the firm in exchange for SNC admitting responsibility for breaches and agreeing to conditions such as a fine and third-party oversight.

On Thursday shares rose nearly 21 per cent or $4.06 to close at $23.81 — their highest in more than three months — after SNC reported earnings that surpassed analyst expectations.

The partial sale of SNC’s stake in the Ontario Highway 407 toll road drove a massive year-over-year profit increase. About $2.6 billion of the firm’s $2.76 billion in net income last quarter — up from $120.7 million a year earlier — came from the after-tax gains of the 407 sale.

The engineering services segment played a role too. Its backlog rose nearly 10 per cent year over year to $11.42 billion in the third quarter as SNC signed seven new contracts worth roughly $500 million. Segment revenue jumped more than 11 per cent to $1.58 billion.

Edwards, who was appointed president and chief executive Thursday after serving in an interim role since June, sought to showcase the fruits of his vision for the company. The firm is pivoting away from big, fixed-price construction contracts — where the bidder shoulders any cost overruns — towards a more stable business model that revolves around engineering services.

ALSO READ: Trudeau election win boosts SNC-Lavalin shares amid hopes around criminal case

“It is still early days, but the decisions we made in July — to exit lump-sum turnkey construction contracting and reorganize the company to focus on our high-performing engineering services business — are demonstrating results, and I am encouraged by our progress,” Edwards said in a release.

SNC-Lavalin reduced its backlog of large, fixed-price contracts — which it aims to work off in the next two years — to $3.2 billion from $3.4 billion three months earlier. The bulk of them relate to light-rail projects in Canada, “which have traditionally…gone well for us,” Edwards said.

Some half-billion dollars’ worth of the lump-sum turnkey projects are for oil and gas, however, which do not have a history of turning a profit, he added.

Last October shares plunged after SNC-Lavalin revealed that federal prosecutors would not negotiate a deal, despite Prime Minister Justin Trudeau pressuring then-attorney general Jody Wilson Raybould to reverse their stance.

The firm’s upcoming trial concerns charges of fraud under the Criminal Code and bribery under the Corruption of Foreign Public Officials Act.

The Caisse, Quebec’s pension fund manager and SNC-Lavalin’s biggest shareholder at 19.9 per cent, said it backs Edwards’ appointment as CEO.

“Since taking the reins of the company a few months ago, he’s clearly put emphasis on execution challenges. That’s a good starting point for the work ahead,” the Caisse told The Canadian Press in an email.

Revenue for the three-month period ended Sept. 30 totalled $2.43 billion, down from $2.56 billion.

On an adjusted basis, which excluded the 407 sale, SNC said it earned $218.0 million or $1.24 per share in its third quarter, up from an adjusted profit of $168.4 million or 96 cents per share a year ago.

The results topped analyst expectations of adjusted income of $97.7 million or 26 cents per share, according to financial markets data firm Refinitiv.

Christopher Reynolds, The Canadian Press

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Wet’suwet’en supporters and Coastal GasLink opponents continue to protest outside the B.C. Legislature in Victoria, B.C., on Thursday, February 27, 2020. THE CANADIAN PRESS/Chad Hipolito
‘We’re still in it’: Wet’suwet’en push forward on rights recognition

The 670-km Coastal GasLink pipeline was approved by B.C. and 20 elected First Nations councils on its path

A health-care worker prepares a dose of the Pfizer-BioNTech COVID-19 vaccine at a UHN COVID-19 vaccine clinic January 7, 2021. THE CANADIAN PRESS/Nathan Denette
Employers might be able to require COVID-19 vaccination from employees: B.C. lawyer

‘An employer must make the case’ using expert science, explains lawyer David Mardiros

Houston physician Dr. Stefanie Steel receives her first dose of the Pfizer vaccine Jan. 19 from RN nurse manager Cindy Cockle. (Northern Health photo)
COVID-19 vaccinations get underway in Smithers

First doses are being administered to long-term care residents and priority health care staff

The COVID-19 outbreak at the two Coastal GasLink workforce lodges has officially been declared over. (Lakes District News file photo)
COVID-19 outbreak at Coastal GasLink worksites declared over

In total, 56 cases were associated with the outbreak in the Burns Lake and Nechako LHAs

Fentanyl was among the drugs seized by New Hazelton RCMP in a big bust in early January. (File photo)
New Hazelton RCMP arrest five, seize drugs and large amount of cash

Police find suspected heroin, fentanyl and crystal meth during early January drug bust

Terrance Josephson of the Princeton Posse, at left, and Tyson Conroy of the Summerland Steam clash during a Junior B hockey game at the Summerland Arena in the early spring of 2020. (John Arendt - Summerland Review)
QUIZ: How much do you know about hockey?

Test your knowledge of Canada’s national winter sport

A woman injects herself with crack cocaine at a supervised consumption site Friday, Jan. 22, 2021 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
Drug users at greater risk of dying as services scale back in second wave of COVID-19

It pins the blame largely on a lack of supports, a corrupted drug supply

Jennifer Cochrane, a Public Health Nurse with Prairie Mountain Health in Virden, administers the COVID-19 vaccine to Robert Farquhar with Westman Regional Laboratory, during the first day of immunizations at the Brandon COVID-19 vaccination supersite in Brandon, Man., on Monday, January 18, 2021. THE CANADIAN PRESS/Tim Smith - POOL
Top doctor urges Canadians to keep up with COVID measures, even as vaccines roll out

More than 776,606 vaccines have been administered so far

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

From the left: Midway RCMP Csts. Jonathan Stermscheg and Chris Hansen, Public Servant Leanne Mclaren and Cpl. Phil Peters. Pictured in the front are Mclaren’s dog, Lincoln and Peters’ dog, Angel. Photo courtesy of BC RCMP
B.C. Mounties commended for bringing firewood to elderly woman

Cpl. Phil Peters said he and detachment members acted after the woman’s husband went to hospital

Dr. Jerome Leis and Dr. Lynfa Stroud are pictured at Sunnybrook Hospital in Toronto on Thursday, January 21, 2021.THE CANADIAN PRESS/Frank Gunn
‘It wasn’t called COVID at the time:’ One year since Canada’s first COVID-19 case

The 56-year-old man was admitted to Toronto’s Sunnybrook Health Sciences Centre

An Uber driver’s vehicle is seen after the company launched service, in Vancouver, Friday, Jan. 24, 2020. Several taxi companies have lost a court bid to run Uber and Lyft off the road in British Columbia. THE CANADIAN PRESS/Darryl Dyck
Taxi companies lose court bid to quash Uber, Lyft approvals in British Columbia

Uber said in a statement that the ruling of the justice is clear and speaks for itself

A 75-year-old aircraft has been languishing in a parking lot on the campus of the University of the Fraser Valley, but will soon be moved to the B.C. Aviation Museum. (Paul Henderson/ Chilliwack Progress)
Vintage military aircraft moving from Chilliwack to new home at B.C. Aviation Museum

The challenging move to Vancouver Island will be documented by Discovery Channel film crews

A video posted to social media by Chilliwack resident Rob Iezzi shows a teenager getting kicked in the face after being approached by three suspects on Friday, Jan. 22, 2021. (YouTube/Rob i)
VIDEO: Security cameras capture ‘just one more assault’ near B.C. high school

Third high-school related assault captured by Chilliwack resident’s cameras since beginning of 2021

Most Read