SNC-LAVALIN REPORTS GROWTH IN REVENUES AND NET INCOME
The SNC-Lavalin Group today reported growth in net income and revenues for the third quarter ended September 30, 2002.
For the third quarter of 2002, the consolidated net income was $20.2 million, or $0.40 per share, compared to $6.9 million, or $0.14 per share reported for the same quarter in 2001. This increase can be attributed to three factors: a $2.0 million, or 9.6%, increase in net income excluding Highway 407, mainly because of increased contributions from the power and mining and metallurgy sectors; a $6.2 million increase because of a reduced ownership level and lower accounting losses from Highway 407; and a $5.1 million increase due to the non-amortization of goodwill in 2002, following recent changes in accounting standards.
Revenues increased by 74% to $1,002.2 million in the third quarter of 2002, compared to $575.2 million for the same quarter last year. Increased activity in the power, chemicals and petroleum and mining and metallurgy sectors were the major contributors to this growth.
Backlog remained strong at $4.2 billion at the end of the third quarter of 2002 compared to $3.5 billion at the end of December 2001. The increase in backlog since year-end is largely explained by over $1.0 billion in contracts, awarded in May 2002, to complete construction on gas-fired thermal power plants in the United States. The remaining backlog on these contracts was $0.5 billion at the end of the third quarter, which, in large part, accounts for the decrease in backlog compared to the June 2002 position of $4.8 billion.
"Our growth in net income, our strong backlog and solid balance sheet combined with our effective operating flexibility provide a good basis for continued growth," said Jacques Lamarre, President and Chief Executive Officer, SNC-Lavalin.
SNC-Lavalin maintained its strong financial position in the third quarter with $412.6 million in consolidated cash and short term investments. During the quarter the Company completed its investment in a 15.5% indirect participation in Malta International Airport under a 65-year concession agreement. Also of note, construction of the Murraylink interconnection line in Australia was completed, and it is now operational. "Our strong financial position is an important competitive advantage when it comes to obtaining new contracts and developing our concessions portfolio." said Mr. Lamarre.
SNC-Lavalin’s Highway 407 concession performed well in the third quarter. Traffic levels continued to increase, reaching 324,557 average workday trips in the third quarter of 2002 compared to 303,834 for the same period last year. Highway 407 recently announced that it would be investing in lane expansions to help relieve congestion on a section of the Highway between Pine Valley Drive and Highway 27.
For the nine-month period ended September 30, 2002, consolidated net income was $179.6 million ($3.58 per share) compared to $23.6 million ($0.50 per share) reported last year. Three factors contributed to this increase: the favourable impact of $135.6 million from Highway 407, which includes a gain from the disposal of a portion of the 407 International Inc. investment and a dilution gain; an $8.6 million (15.1%) growth in net income excluding Highway 407; and $11.8 million due to the non-amortization approach to goodwill adopted earlier this year.
The Board of Directors today declared a quarterly dividend of $0.09 per share, payable on December 5, 2002 to shareholders of record on November 21, 2002.
SNC-Lavalin (TSX: SNC) is one of the leading groups of engineering and construction companies in the world, and a key player in facilities and operations management, and in the ownership, operation and maintenance of infrastructure. The SNC-Lavalin companies employ over 15,000 people in offices across Canada and in 30 other countries around the world and are currently working in some 100 countries.
Reference in this press release, and hereafter, to "the Company" or to "SNC-Lavalin" includes, as the context may require, SNC-Lavalin Group Inc. and all or some of its subsidiaries, or SNC-Lavalin Group Inc. or one or more of its subsidiaries. Statements made in this press release that describe the Company's or management's objectives, projections, estimates, expectations or predictions of the future may be "forward-looking statements" which can be identified by the use of forward-looking terminology such as "believes", "expects", "may", "will", "should", "estimates", "anticipates", or the negative thereof or other variations thereon. The Company cautions that, by their nature, forward-looking statements involve risks and uncertainties and that its actual actions or results could differ materially from those expressed or implied in such forward-looking statements, or could affect the extent to which a particular projection materializes.
Media ContactGillian MacCormack
Vice-President, Global Public Relations
SNC-Lavalin Group Inc.
Director, Investor Relations
SNC-Lavalin Group Inc.