Supplier bankruptcy hurts SNC-Lavalin profits

SNC-Lavalin has reported a net loss for the first quarter of 2007 of $19.8 million. This compares to a consolidated net income of $26.6 million in the same period of last year.

The company had warned markets about the loss in a press release on March 26 explaining that it was mainly due to the bankruptcy of one of its major suppliers on a power project.

The troublesome project is the Sithe Global Goreway 880-MW combined cycle thermal power plant in Brampton, west of Toronto.

SNC-Lavalin was awarded a $757 million contract in January 2006 to do the engineering, procurement and construction for the plant, of which the first phase was expected to be in service by this summer.

The loss was partly offset by a gain of $84.1 million from the sale of SNC Technologies during the same quarter.