SNC Drops Most Since 1992 After Cutting Profit Forecast
- Construction firm also takes $937 million writedown in energy
- SNC says mining problem led to higher costs in fourth quarter
Photographer: Simon Dawson/Bloomberg
SNC-Lavalin Group Inc. dropped the most in at least 27 years after the builder warned it would miss its full-year profit target due to a “serious problem” with a mining contract. It also wrote down the value of its energy unit by C$1.24 billion ($937 million) amid a diplomatic spat between Canada and Saudi Arabia.
The engineering and construction firm said it incurred additional costs in the fourth quarter at an unidentified mining and metallurgy project, and couldn’t “reach agreement” with the client to book revenue, according to a statement Monday. Worse than expected trading challenges in oil and gas in the Middle East -- and Saudi Arabia in particular -- also weighed on fourth-quarter results, SNC added. The company is weighing a possible exit from Saudi Arabia as a result.