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SNC-Lavalin To Exit Lump-sum Turnkey Contracting, Withdraw 2019 Guidance

SNC-Lavalin Group Inc. (SNC.TO) said Monday that it will exit lump-sum turnkey or LSTK contracting and reorganize the company's Resources--Oil & Gas and Mining & Metallurgy-- and Infrastructure Construction segments into a separate business line following continued poor performance of the segments. It will reorganize the company to focus on the high-performing and growth areas of the business, which will be reported under SNCL Engineering Services.

The company expects lower results in the second-quarter than previously anticipated. Meanwhile, it withdrew its financial guidance for 2019.

The company will take additional non-cash impairment charge and an intangible assets charge relating to the company's O&G business, specifically Kentz, totalling about C$1.9 billion.

The company also explored all options for its Resources segment, particularly its Oil & Gas business, including transition to a services-based business or divestiture.

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