Even as Robert G. Card, new CEO of SNC-Lavalin, aims to "put its house in order" in the wake of an ethics scandal he inherited from previous management now gone from the Montreal-based global engineer, he presented a mixed outlook for company results in 2012 and into this year.

In a report to analysts March 8, Card said that company backlog "remained strong" at $9.85 billion, fourth-quarter 2012 revenue rose 14.3% to $2.3 billion with year-end up 12.2% to nearly $8 billion, and returns linked to its highway concessions business were positive.

Robert Card

But SNC-Lavalin also noted that lower earnings included "unfavorable cost reforecasts" largely from problem projects in North Africa and Russia. Margins fell for most of the firm's industry segments in 2012 compared to 2011, while its hydrocarbons-chemical unit posted a loss..

The firm also noted a $22-million loss related to its position in unspecified infrastructure projects in Libya.

Card, a former top executive of Denver-based CH2M Hill Cos., has been SNC-Lavalin CEO since last October.

Noting "several not great legacy projects," Card said the firm was "cleaning them up." He did not elaborate but said the Russian project is set for completion this year.

Despite its problems in Africa, Card noted that the firm's power segment "had a fabulous year" and will be a key contributor to its bottom-line in 2013 as well.

"There's plenty of business in our pipeline to create a great result," he told analysts. Foreseeing "big wins" in infrastructure and power in 2013, he foresees a 10 to 15% hike in overall margins in 2013, although the rate is well below expectations for most SNC-Lavalin analysts, according to a published report in Toronto.

"We have the top line. It's not a great market but we have what we need," said Card. "We have to get to the bottom line. With all the distractions of last year, we weren't moving as fast as we should have."

Card noted the January appointment of Neil Bruce, former chief operating officer at AMEC, as president of an expanded group to include its mining, hydrocarbons, chemicals and water markets "to strengthen the one-company approach," but he acknowledged the turnaround would be slow.

Related to mining, Card said SNC-Lavalin has "a great position in a volatile market." He said there have been "no major hits yet, but we're not immune from major clients deciding not to do their projects."

The CEO said, however, that Bruce's new group "has a lot of delivery talent. We're waiting for some new top line around the corner," said Card. "It will be a couple more quarters before we can know where it will end up."

Card acknowledged the "management distraction" of the ethics brouhaha involving alleged bribes, fraud charges and ethics violations on projects in Canada and abroad by former officials, including ex-CEO Pierre Duhaime. 

Leslie Quinton, SNC-Lavalin senior vice president, confirmed March 18 that another former manager filed a wrongful-dismissal lawsuit against the firm. Reports say the $1.2-million suit by engineer Joseph Salim claims that executives covered up payments to agents on a dam project in Angola and that he had no involvement in the scheme.

Quinton says Salim "was terminated for cause in January," that his claims are without merit and that the firm is strengthening internal controls.