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UPDATE 1-Canada's SNC-Lavalin profit beats as expenses drop

Published 2016-11-03, 08:29 a/m
© Reuters.  UPDATE 1-Canada's SNC-Lavalin profit beats as expenses drop
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Nov 3 (Reuters) - Canada's SNC-Lavalin Group Inc SNC.TO reported a better-than-expected quarterly profit on Thursday as the company aggressively cut costs.

The company is in the midst of a sweeping cost-cutting program that is expected to save about C$100 million ($77 million) in 2016 and help boost margins in its core business.

Total adjusted selling, general and administrative expenses fell 16.5 percent in the third quarter ended Sept. 30, the company said, adding it was positioned to deliver well above the C$100 million cost-cutting target.

In September, SNC-Lavalin cut its full-year adjusted profit forecast for its engineering and construction business, citing commercial issues in two oil & gas projects in the Middle East.

This affected the unit, which reported an 11.6 percent fall in revenue in the latest quarter. The unit accounted for nearly 97 percent of the company's total revenue.

The company on Thursday maintained its full-year adjusted profit estimate for its core business at C$1.30 to C$1.60 per share. income attributable to shareholders fell to C$43.3 million ($32.3 million), or 29 Canadian cents per share, in the quarter, from C$224.2 million, or C$1.49 per share, a year earlier. year-earlier quarter included a gain of C$145.7 million from the sale of the company's stake in the Ambatovy Nickel project in Madagascar.

Excluding items, the company reported a profit of 16 Canadian cents per share, better than the analysts' average estimate of 10 Canadian cents, according to Thomson Reuters I/B/E/S.

Revenue fell 11 percent to C$2.17 billion, but beat analysts' average estimate of C$2.07 billion. ($1 = C$1.34)

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