Engineering giant says near-term prospects for Saudi business ‘worsening in the face of rising trade challenges’
SNC-Lavalin, the Canadian engineering firm, has written down $910 million in oil and gas assets amid the continuing uncertainty over trade relations with Saudi Arabia, it has said.
According to a report by Arab News, the engineering giant had picked up a string of major contracts in the Kingdom prior to a diplomatic dispute between the two countries last summer, which created a cloud over the outlook for future orders.
Furthermore, the firm said that the near-term prospects for the business were worsening in the face of rising trade challenges in the Kingdom. It added that the write down contributed to a $1.2 billion fourth quarter loss, with the engineering company also facing headwinds in Latin America, where it reported a $263.3 million loss.
Analysts said that loss is related to Chilean state-run miner Codelco’s Chuquicamata copper mine.
It is also expecting lower annual revenue from its metals and mining business, the report added.
“We disclosed back in August the potential effects of the Canadian-Saudi issue, and I think that in itself doesn’t affect the work we do today and the backlog we have,” said SNC-Lavalin CEO Neil Bruce in a video presentation accompanying the company’s full-year results.
“But it does put a lot of uncertainty into the future prospects because Saudi have been pretty clear that they are looking wherever they choose to maybe omit us from bidding things that traditionally we would have bid,” he added.