(RTTNews.com) - SNC-Lavalin Group Inc. (SNC.TO) said that its full year 2018 results will be lower than expected. Separately, SNC-Lavalin announced that it appointed Ian Edwards as Chief Operating Officer. The appointment is effective immediately and the position will report to Neil Bruce, President and Chief Executive Officer.
SNC.TO is trading at C$37.86, down C$10.64 or 21.94 percent.
Neil Bruce, President and Chief Executive Officer said "A serious problem has just come to light in relation to a single project in the Mining & Metallurgy segment. The contract was awarded in 2016 and its year-end under-performance relative to internal budgets will materially affect our Q4 results, and therefore our full year 2018 results. This isolated incident is unacceptable and I intend to take appropriate actions to mitigate the financial impacts for the Company."
The company said, "the impairment tests we carry out on an on-going basis indicate that the fair value of our Oil & Gas segment is lower than the carrying value in our financial statements. We will therefore be taking a non-cash after-tax goodwill impairment charge of approximately $1.24 billion, or $7.06 per diluted share."
Due to the forecasted loss in Q4 and revised revenue forecasts, the company expects that its adjusted diluted EPS from E&C for the year ended December 31, 2018 to be in the range of C$1.15 to C$1.30, and expects that its adjusted consolidated diluted EPS to be in the range of C$2.15 to C$2.30.
The company said, "As a result of all these factors, unavoidably we will take a more cautious view towards our 2019 prospects to reflect these uncertainties. Details on our 2019 guidance will be provided in our upcoming fourth quarter earnings release, on February 22, 2019."
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