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Thu 31 Jan 2019 02:25 PM

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Canadian builder denies Saudi Arabia exit plan

SNC-Lavalin commits itself long-term to Saudi Arabia following media reports suggesting it may stop operations in the Gulf kingdom

Canadian builder denies Saudi Arabia exit plan
Reports earlier suggested that a diplomatic spat between Canada and Saudi Arabia is also having an impact on SNC’s operations.

Canadian builder SNC-Lavalin on Thursday committed itself long-term to Saudi Arabia following media reports suggesting it may stop operations in the Gulf kingdom.

In a statement, the company referred to "inaccurate" reports and said Saudi Arabia remained an "integral part" of the company's future.

Reports earlier suggested that a diplomatic spat between Canada and Saudi Arabia is also having an impact on SNC’s operations.

Saudi Arabia froze diplomatic ties and new business deals with Canada in August, following a call by Canadian Foreign Minister Chrystia Freeland for Saudi human rights activists to be released from prison.

The dispute sparked SNC to write down the fair value of its oil and gas segment although the writedown represents less than 50 percent of the value of the oil and gas business.

But on Thursday SNC issued a statement saying: "Some media reports have made inaccurate statements about SNC-Lavalin withdrawing from Saudi Arabia. For over 40 years, SNC-Lavalin has been an integral part of supporting the continuous growth of many companies and industries in the kingdom.

"We are continuing to support all our clients’ ongoing projects. They have come to count on us for our expertise, in-country experience and dedication, and we look forward to continuing our long term relationship for many years to come."

More than 15 percent of the company’s global workforce is employed on work in Saudi Arabia, which has been a key source of revenue growth in recent years.

Earlier this week, SNC-Lavalin Group warned it would miss its full-year profit target due to a “serious problem” with a mining contract.

The engineering and construction firm said worse than expected trading challenges in oil and gas in the Middle East - and Saudi Arabia in particular - also weighed on fourth-quarter results.

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