Net profit fell to $ 14.3 million in the first quarter from $ 62 million a year earlier, as net finance costs increased by more than 600%, the company said.
“Net income was significantly affected by the extreme volatility seen in the major stock indexes and exchange rates resulting mainly from the COVID-19 pandemic,” WSP said in quarterly documents.
The engineering firm sought to reassure investors with the release of financial results on Wednesday, three weeks after withdrawing its 2020 forecast due to “unprecedented uncertainty” caused by the pandemic.
“In most of the major WSP poles, many services or projects are considered essential services and the company has, to date, maintained good levels of productivity and our customers have so far generally remained attached to their projects , especially in the public sector, “said the company.
Public sector projects accounted for 56% of revenues last year, leaving the business relatively stable during the crisis, with most employees working remotely.
WSP is “in a good position,” said Raymond James analyst Frédéric Bastien.
“WSP Global has been one of the best performing stocks in our hedging universe since the markets started rolling on February 24,” he said in a research note last week. Its stock price has dropped 1% since then, compared to a 12% drop for the S&P 500.
About 4% of the company’s activities come from petroleum, one of the lowest levels of resource exposure in the engineering industry, said Bastien.
“No engineering advice will emerge unscathed from the COVID-19 crisis, to be clear. “
The Montreal-based company has seen several projects delayed and postponed some capital spending as lockouts rampant construction activity around the world.
CEO Alexandre L’Heureux said his goal throughout 2020 is to maintain adjusted earnings at a level comparable to last year, excluding non-recurring expenses.
“Our April results are better than we expected during the month,” he said in a statement.
At the end of March, WSP had $ 1.2 billion in short-term capital available, more than $ 900 million in cash.
On a per share basis, diluted net earnings fell to 13 cents from 61 cents, well below the 63 cents per share expected by analysts, according to financial market data company Refinitiv.
WSP says revenues increased 1.7% year over year to $ 2.2 billion in the quarter ended March 28.