LONDON: Canadian engineering firm SNC-Lavalin has written off $ 910 million in oil and gas assets in light of ongoing uncertainty over its trade relations with Saudi Arabia.
The Canadian engineering giant had previously completed a series of important contracts in the kingdom A diplomatic dispute between the two countries last summer has tarnished the prospects for future contracts.
The company said Friday that the short-term outlook for the business is worsening amid increasing commercial challenges in the UK.
"Already in August, we exposed the potential impact of the Canadian-Saudi issue, and I think that this in itself will not affect today's work and backlog," said Neil Bruce, CEO of SNC-Lavalin in a video presentation that accompanied the company results for the whole year. "But there is a lot of uncertainty in the future prospects because the Saudis were pretty clear they were looking for where they might decide to stop us from offering things that we would normally offer," he said.
Depreciation contributed $ 1
As a result, SNC-Lavalin expects a lower value of annual sales from the metals and mining business.
Closer to home, the company is also in the midst of a political crisis that has struck Canadian Prime Minister Justin Trudeau and led to the recent resignation of one of his key advisors and a minister, Reuters reported.
The crisis follows allegations that Trudeau's officials have pressured a former minister to escape SNC by a fine and escape a lawsuit for bribing Libyan officials.
Saudi Arabia was a lucrative market for Canadians
Last April, contractor Saudi Aramco was commissioned to install additional equipment for a large gas processing plant in the eastern province of the Kingdom 003] The following month, a contract was signed for completed a large district cooling plant in Makkah.