* Q4 EPS C$0.91 vs C$0.65 a year earlier; revenue up 20 pct
* Says evacuated 4,000-plus employees from Libya
* Sees flat adjusted earnings and gross margins in 2011
* Sees higher revenue in 2011
* Raises quarterly cash dividend by 23.5 pct
* Shares down 0.5 percent
(Adds details from conference call)
By S. John Tilak
TORONTO, March 4 SNC-Lavalin Group Inc (SNC.TO)
posted a higher quarterly profit and raised its dividend on
Friday, even as the Libyan crisis prompted a flat earnings
outlook after at least six straight years of profit growth.
The robust earnings report from SNC, one of the world's
biggest engineering and construction companies and Canada's
largest, comes just days after the Libyan crisis brought
several big projects it has undertaken in the country to a
The stock rose 3 percent initially but was down 0.5 percent
at C$55.62 on Friday afternoon on the Toronto Stock Exchange.
It had fallen 8 percent in the past two weeks due to the unrest
in the Middle East and North Africa.
SNC's fourth-quarter earnings rose to C$139.2 million
($143.5 million), or 91 Canadian cents a share, from C$98.7
million, or 65 Canadian cents a share, a year earlier. Revenue
rose 20 percent to C$1.9 billion.
Analysts, on average, had forecast earnings of 75 Canadian
cents a share on revenue of C$1.76 billion, according to
Thomson Reuters I/B/E/S.
However, the company said it expects its 2011 net income to
be flat, excluding certain gains, because of recent events in
Libya and the Middle East. In 2010, its net income rose 9
percent, excluding items, and in 2009 it was up 11 percent.
Including all items, SNC expects net income to fall in
2011, which marks a century since its founding. Gross margins
are expected to be flat, while revenue is seen rising.
The forecast highlights worries about the company's
business in Libya and the possibility of more upheavals through
the Middle East.
"It's a real concern," Raymond James analyst Frederic
Bastien said. "The question now is, will they ever be back in
Libya to finish those projects?"
"The odds are good that they'll be asked to go back and
finish it, once everything calms down, regardless of who ends
up governing the country," he said.
The company said on a conference call on Friday it has
evacuated more than 4,000 employees from Libya because of
violent clashes between forces loyal to Muammar Gaddafi and
protesters calling for his ouster. It is confident it will be
paid what it is owed on its Libyan contracts.
The company's projects in the North African country, where
it has had operations for decades, include a prison, a water
pipeline and an airport.
SNC also increased its quarterly dividend by 23.5 percent
to 21 Canadian cents a share for the fourth quarter of 2010.
The company said its revenue backlog was C$13 billion
($13.4 billion) at the end of 2010, excluding fourth-quarter
bookings of Libyan projects totaling at least C$934 million.
"The situation in Libya is quite serious. But the remaining
business is doing extremely well," NCP Northland Capital
Partners analyst Maxim Sytchev said.
"The biggest risk is if there's contagion in the Middle
East -- if there's additional upheaval, perhaps in Algeria."
It is business as usual in Algeria at the moment, the
"The numbers are all good," Versant Partners analyst Neil
Linsdell said of the results. "The company is taking the most
conservative stance on business exposed to Libya."
In 2009, SNC-Lavalin generated a quarter of its revenue
from Africa and the Middle East, according to its annual
report. In 2010, Libya contributed 6.6 percent to revenue.
The company is working on three major projects in Libya: a
C$500 million expansion of the airport in Benghazi, the center
of recent violent clashes; some C$450 million ongoing work on a
major water pipeline called the Great Man-Made River system;
and a jail in the capital city, Tripoli.
(Reporting by S. John Tilak; editing Peter Galloway)