SNC-Lavalin narrows Q2 net loss
14 Aug 2020 - Upstream Costs and Technology | Headline Analysis
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Jie Sheng AwJie Sheng AwSenior Research Analyst

SNC-Lavalin’s second quarter total revenue fell 15.7% to CAD2.0 billion (USD1.5 billion), but net loss narrowed to CAD112 million (USD84 million). The decline in revenue was mainly contributed by its Projects division, due to continuing backlog run-off of certain major lumpsum turnkey (LSTK) construction projects, coupled with no new LSTK construction contract bidding by the company. Projects division revenue fell 35.0% year on year to CAD462 million (USD347 million). Engineering Services division’s revenue, which comprises Engineering, Design and Project Management (EPDM), Nuclear and Infrastructure Services segments fell by a lower 2.0% year on year, to CAD1.5 billion (USD1.1 billion). The net loss in the second quarter of 2020 included restructuring costs of CAD47 million (USD36 million), mainly related to the restructuring activity in EDPM and Resources Services.

Compared to the second half of 2019, Engineering Services revenue is expected to decrease by a low-to-mid single digit percentage. SNC-Lavalin did not provide a forecast for Projects revenue.

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