AtkinsRealis Announces Sale of Linzon Joint Venture Following Strong Earnings Performance
AtkinsRealis Reports Record Services Backlog, Beats Earnings Expectations
New York, NY – AtkinsRealis, a global leader in engineering, consulting, and construction, today announced that it has entered into definitive agreements to sell its remaining interest in the Linzon joint venture. The company, which operates under the name SNC-Lavalin Group after a strategic rebranding earlier this year, revealed the decision during its quarterly earnings call.
Earnings Beat Expectations
In its most recent quarter, AtkinsRealis reported strong financial results, exceeding analyst expectations. Earnings for the period were $2.4 billion, up 18% from the same period last year. This performance underscored the company’s ability to adapt to changing market conditions and deliver robust returns.
Linzon Joint Venture Sale
The sale of AtkinsRealis’ interest in Linzon represents a key step in the company’s strategic transformation. The Linzon joint venture, which includes significant projects such as the extension of nuclear reactors in Romania, improvements to runway safety at Miami International Airport, and modernization efforts at Montreal’s Saint-Jerome hospital, has been a cornerstone of AtkinsRealis’ success.
Record Services Backlog
In its latest quarter, AtkinsRealis reported a services backlog reaching an all-time high. The company attributed this achievement to its ability to secure new contracts under fixed-price agreements while maintaining high-quality deliverables. This record backlog is a testament to the company’s growing market position and its strategic focus on long-term client relationships.
Shift in Focus: Consulting vs. Lump-Sum Contracts
Under the leadership of John Edwards, CEO of AtkinsRealis since June 2019, the company has increasingly emphasized its expertise in engineering and consulting services. This shift has positioned the company to outperform competitors by delivering value-added solutions that extend the life of infrastructure projects while minimizing risk.
However, three significant lump-sum turnkey construction contracts remain a challenge for the company: Toronto’s Eglinton Crosstown light-rail transit system, Ottawa’s Trillium Line, and Montreal’s REM light-rail network extension. Losses associated with these projects were lower than in previous periods due to administrative costs rather than cost overruns.
Revenue Growth
For the quarter ending in late September 2023, AtkinsRealis reported total revenue of $2.28 billion, marking a 20% increase from the same period last year. Professional services and project management accounted for $2.22 billion of this revenue, up 17% from the prior year. Capital investment revenue rose slightly to $64 million.
Adjusted Earnings
On an adjusted basis, AtkinsRealis earned 45 cents per diluted share in its latest quarter, compared to a loss of 19 cents per share a year earlier. This figure reflects the company’s ability to manage costs while maintaining profitability despite competitive market pressures.
Strategic Review and Future Outlook
The sale of the Linzon joint venture is part of a broader strategic review conducted by AtkinsRealis as it prepares for future growth. The company remains committed to delivering high-quality engineering solutions, expanding its footprint in key markets, and maintaining its leadership position in the global construction industry.
Key Takeaways
- AtkinsRealis has exceeded its earnings expectations for the quarter.
- The sale of the Linzon joint venture is part of a strategic shift toward consulting and long-term client relationships.
- The company continues to face challenges from lump-sum contracts but has achieved significant revenue growth.
- Strong performance in professional services underscores the company’s competitive edge.
For more information, visit AtkinsRealis’ official website or follow its news releases on atkinsrealis.com.
