Neil Bruce did a ‘poor job of overselling the value’ SNC-Lavalin could get for the 407 highway, says one analyst
SNC-Lavalin’s chief executive Neil Bruce is confident the second half of 2019 will be better than the last few months.
During the past year, the company’s share price has declined more than 45 per cent; and on Thursday, the company released what Bruce described as disappointing first quarter results, including a $17.3 million loss and an announcement the firm is pulling out of 15 countries.Bruce, a U.K. native with a strong Scottish accent, joined SNC in 2013 with initial responsibility for the company’s oil and gas and mining business.
“To be clear, we believe that the 407 is currently undervalued,” Bruce told analysts in August. “We believe that its value is in excess of the current analyst consensus. This is the only way to truly demonstrate the value.” Canadian billionaire Stephen Jarislowsky, an investor and former director of SNC, has said in a letter to the company it should allow shareholders to vote on the sale.
Many shareholders were happy because the sale would put around $3 billion onto SNC’s balance sheet, if it closes at the end of June as expected, and the company has been battling high debt loads. Initially, Bruce said he met with people at Codelco to resolve the situation, and believed the company could book revenues from the project in 2019. Weeks later, SNC was fired by Codelco, resulting in a $349 million writedown that, the company said, will continue to eat away at its mining segment’s profits into next quarter.SNC CEO Neil Bruce The company also said the deterioration of Saudi-Canadian diplomatic relationships during the past year was hurting its oil and gas business.
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