Toronto, Ontario – February 4, 2011: Aecon Group Inc. (TSX: ARE) announced today that change order negotiations on Suncor’s Firebag III Central Plant Facilities (CPF) project will result in significant losses being recorded on the project.
While negotiations have not yet concluded, total operating losses on the project will be in the $56–$59 million range ($40–$42 million after tax), leading to an operating loss in the Industrial segment for the year ended December 31, 2010.
Aecon turned over the Firebag III CPF project to Suncor at 2010 year end, and assisted Suncor with transitioning from completing construction to pre-commissioning mode. As such, the impact of project losses is limited to the 2010 fiscal year, and will not affect Aecon’s financial results in 2011.
“Notwithstanding the unsatisfactory financial results achieved on the project, we continue to have a solid working relationship with Suncor, and continue to work on a number of Suncor sites including the Firebag IV cogeneration project and the Millennium Naphtha Unit,” said John M. Beck, Aecon’s Chairman and CEO. “We remain as committed and optimistic as ever for Aecon’s ongoing success in the oilsands.”
Aside from the final settlement of these change orders, and the previously disclosed $30–$35 million after tax gain on the sale of Aecon’s interest in the Cross Israel Highway concession, Aecon’s results for the fourth quarter of 2010 are generally in line with management expectations.
Aecon Group Inc. is Canada’s largest, publicly traded construction and infrastructure development company. Aecon and its subsidiaries provide services to private and public sector clients throughout Canada and on a selected basis internationally. Aecon is pleased to be recognized as one of the Best Employers in Canada as published by Maclean’s Magazine.