SNC-Lavalin President and CEO Neil Bruce said Thursday that the Montreal-based engineering company enjoyed a solid third quarter and that the integration of British engineering and project management provider WS Atkins is nearly complete.
“We are pleased with our third quarter results, which include a contribution from our recent transformational acquisition of Atkins,” Bruce said in a news release on quarterly financial results.
The company completed the Atkins acquisition in July, and “Our goal to have the integration fully complete by the end of the year is within our sights,” Bruce added. The CEO didn’t spend much time on the mechanics of the integration. He did say that SNC-Lavalin remains on track to deliver “cost synergies,” or savings, of $120 million (CAD) connected with the Atkins purchase by the end of 2018. SNC reports its earnings in Canadian dollars (CAD).
In response to a question from a financial analyst, Bruce said the savings, achieved through eliminating boards and some duplicated services, are being tabulated over multiple filing periods.
With the purchase of Atkins, SNC-Lavalin touts itself as a major global professional services and project management company with more than 50,000 employees and annual revenue of approximately $12 billion.
SNC-Lavalin reported third-quarter earnings of $103.6 million, or $.059 per diluted share. That is compared with $43.3 million, or $0.29 per diluted share, in the same period of 2016. The company maintained its 2017 outlook of earnings per share in the range of $2 to $2.20.
Atkins was listed as a new segment within SNC for the quarter, with revenue of $805.3 million.
The merger gives SNC a significant foothold in the Department of Energy cleanup sphere, including as a partner with AECOM in tank waste contractor Washington River Protection Solutions at the Hanford Site in Washington state and as a key subcontractor for liquid waste management at the Savannah River Site in South Carolina. Atkins, together with partners Westinghouse and Fluor, was chosen by DOE last year to run depleted uranium hexafluoride (DUF6) conversion facilities in Kentucky and Ohio. That agreement represents a five-year, $318 million value for the joint venture.
In discussing Atkins, Bruce said there are currently 14 decommissioning and decontamination opportunities within the United States. Atkins brings SNC considerable D&D potential, especially in the United States, the CEO said. It’s all part of a “huge pipeline of opportunities,” Bruce said.
The SNC executive did not offer any sort of breakdown on the D&D opportunities or specify how many might involve DOE or other government agencies.
SNC-Lavalin listed a revenue backlog of $11.3 billion as of Sept. 30. There was a $2 billion contribution of backlog projects from Atkins. Cost savings of $30 million from Atkins will be delivered in the fourth quarter.
Overall, SNC-Lavalin’s third-quarter total revenue was $2.63 billion in 2017 compared to about $2.17 billion in 3Q 2016, executives said during the earnings presentation.
