The company’s president and chief executive officer Neil Bruce made the announcement while reporting the results for the first quarter of this year. There was a net loss of CA$17.3m on adjusted consolidated net income CA$36.9m for the quarter; the adjusted net loss from engineering and construction (E&C) was CA$14.9m. The company’s backlog stood at CA$15.8bn at the end of March 2019, with bookings of CA$3.2bn in Q1 2019.
He said: “We will be focusing on our core geographies and are removing unprofitable revenues across 15 countries where we have sub-scale operations. We also have combined our oil & gas and mining businesses. We also stopped bidding on lump sum EPC mining projects, as going forward we will be undertaking lump sum EPC work in Infrastructure and oil & gas only in our core regions where we have strong capabilities.”
Bruce said: “We remain confident that we can deliver our 2019 outlook, despite being disappointed with our first quarter performance. To address the under-performance of Q4, we simplified our structure to four reporting E&C sectors, underpinned by the new project oversight function, and intensified our cost reduction programme. At the heart of this structure is the appointment of Ian Edwards, our new chief operating officer, who has a mandate to ensure greater collaboration among our business segments and to have laser focus on excellence in execution, which we believe will allow us to deliver more predictable results and cash generation, and grow our business responsibly.”
In addition to implementing this simplified operating structure, the company has accelerated its simplification and cost reduction programme. The objective of this program is to increase efficiency and competitiveness, through reducing the Company’s overhead cost structure by CA$250m annually. The company expects to realize just over CA$100m of such savings during the rest of 2019.
In April, the company reached an agreement to sell 10.01% of the Highway 407 ETR tolled road project at what Bruce described as a very good valuation.