Saudi-Canada tension hits SNC-Lavalin oil business in 2018
CEO Neil Bruce says diplomatic spat and unpredictable market hit oil and gas unit in 'disappointing' year
The chief executive officer of SNC-Lavalin labelled 2018 as a “disappointing year”, with diplomatic tensions between Canada and Saudi Arabia said to have dented the Montreal-headquartered engineering and conatracting firm’s profitability.
Speaking on the group’s Q4 and full-year financial results for 2018, which included 440% annual decline in net revenues, Neil Bruce, president and CEO of SNC-Lavalin, said: “2018 was a disappointing year, as our mining and metallurgy, and oil and gas segments underperformed.
“Due to a deterioration of the oil and gas segment’s near-term prospects caused by various factors, including difficult inter-governmental relations between Canada and Saudi Arabia; unpredictable commodity prices; and uncertain client investment plans, we were required to record a goodwill impairment in the [Q4].”
The firm reported a $980m loss for 2018, with declines also noted in earnings per share for the year.
Speaking on the firm’s Q4 2018 performance, Bruce touched on the impact of the ongoing diplomatic spat between Canada and Saudi Arabia on SNC-Lavalin’s critical oil and gas business.
“We disclosed back in August  that potential effects of the Canadian-Saudi relationship issue [would hit the business]. I am confident that this does not affect the work that we do today and the backlog that we are currently have in terms of completed work.”
The figures weeks after Canada’s Prime Minister Justin Trudeau reportedly denied interfering with a legal case involving corruption charges against SNC-Lavalin.