SNC-Lavalin Group slashes dividend by 65 per cent and reports a $1.6-billion fourth-quarter loss
|Toronto Star 22 Feb 2019 at 20:23|
MONTREALâ€”Amid an ongoing scandal that has rocked the Liberal government in Ottawa, the head of SNC-Lavalin Group Inc. said heâ€™s tired of seeing his employees â€śused as a puck in a political hockey game.â€ť
â€śFrankly, they donâ€™t deserve it. And weâ€™ve had enough,â€ť chief executive Neil Bruce said Friday after slashing the companyâ€™s dividend and reporting its biggest quarterly losses in at least two decades.
The beleaguered engineering and construction giant has been in the eye of a firestorm that erupted earlier this month when The Globe and Mail reported the Prime Ministerâ€™s Office pressured former attorney general Jody Wilson-Raybould to steer prosecutors toward negotiations with the company.
The company was looking to negotiate a deferred prosecution agreement in connection with fraud and bribery charges linked to business dealings with Moammar Gadhafiâ€™s now-toppled regime in Libya.
Bruce said he wasnâ€™t holding out much hope for a remediation agreement, which would allow SNC-Lavalin to avoid a criminal trial in exchange for fines and other penalties.
â€śThatâ€™s certainly at their discretion,â€ť he said. â€śBut frankly, it doesnâ€™t look like that today.â€ť
SNC-Lavalin chopped its dividend by 65 per cent Friday as it reported a fourth-quarter loss of $1.6 billion.
It will now pay a quarterly dividend of 10 cents per share compared with its earlier payment of 28.7 cents per share.
Bruce said problems at a mining project in Chile were â€śincredibly disappointing,â€ť noting the companyâ€™s mining and metallurgy and oil and gas segments had underperformed, prompting a pair of profit warnings earlier this year.
The Jan. 28 announcement, combined with news about delays at the Chilean mining project and an arbitration loss in Australia, sent shares plummeting 27 per cent to close at $35.01, their lowest since September 2012.
Analyst Derek Spronck of RBC Dominion Securities advised investors to â€śkeep calm and carry on.â€ť
â€śThere remain lots of challenges ahead for SNC, but none of which we would view as insurmountable and more than reflected in the current share price,â€ť he said in a research note Friday.