Atkinsrealis Group Inc T.ATRL

Effect of salary cuts during covid

[Gabriel]

Expenses during COVID are at rock bottom and all clients have been very supportive and understanding on contractual requirements, waiving travel and logistics requirements. Savings here amount to at least 5% of revenue. In my estimate we have 5% (1,500m) = 75m savings.

In addition and as you all know, SNCL has reduced all salaries by 10 to 20% for the April to June period (3 months). See link to Globe article confirming this.

This saves another 75m this Q: 12% * 50,000 employees * 50,000 CAD/employee.yr * 1/4 yr 

https://www.theglobeandmail.com/business/article-snc-lavalin-asking-workers-to-take-pay-cut-for-next-three-months/

[Gabriel]

On expenses : I am talking about my firm and other firms I work with that are of comparable size to SNC.

[Form001]

J’ai un ami qui travaille chez Siemens, la grande majorit des employs ont accept une baisse de 20% en geste de solidarit pour s’apercevoir plus tard que la comptabilit avait refus.......

[Payman2dib]

wow hold a little.  In case of SNC it was 10% salary reduction or 20% for those upper management.  But those who took 10% cut had two options:  work 40 hours a week and lose 10%.  the second option was to work 10% less hours.  A few peiple took that last option.  work less hours (10% less).  this doesnt translate to 75 million $saving as perGabriel calculation

[Gabriel]

Payman, I want to understand my mistake if any. I see you had no comment on expenses. on salaries: in both cases (whether you take the 10% cut option or take the 10% less hours pay), SNC payments are reduced by 10%. Upper management took 20% so I used 12% on average. 10-12% * 50,000$-60,000$ (Inclusive of UIC, pension, employer contribution which are all assumed proportionally reduced)

[Payman2dib]

You are right on all points.  It is just that SNC gave 2 options:  1-10% cut on salary 2- you work 10% less.  But how many employees did take the second option.  If they did, that means that they worked less (10% of 37,5).  But if they worked less, they also did not bring money in(+110$/hr).  So your overhead salary is reduced but so is income.  may be im wrong..

[Gabriel]

Agreed with less billing hours. Revenue will drop for sure during Q2. Lots of layoffs should also partially attenuate. I know a few firms here in montreal that are heavily loaded with contracts and are picky on what to pursue. I don't know about snc but i suspect they are loaded.

[Form001]

Gabriel, les employs Canadiens de SNC ont droit la subvention salariale de mme pour la PCU qui va durer encore un bout de temps, as-tu pris en compte dans ton calcul cet argent du Fdral?

[Gabriel]

Tu as raison. Non je ne l ai pas prise en compte. Selon moi le trimestre sera pas si pire sauf le remboursement d une partie du 250m de la vente de la 407 qui est contingent la performance.

[Form001]

Selon moi, c’est beaucoup d’argent surtout qu’ils ont chang les rgles cette semaine, je crois qu’ils ont d changer les chiffres pour reflter ces changements. Ces changements seront en vigueur jusque fin novembre. a devient trs difficile de spculer sur les rsultats mais je ne serais pas surpris d’un petit plus que .08 de profits par action.

[tomperns]

My personal expectation is a $200M loss for Q2. If they even break even, i will be happy and more than confident that they will make money Q3 and Q4.

[Form001]

Gabriel, c’est 845.00 maximum par employ, mme Ian Edwards y a droit...

[Form001]

845.00 every week till the end of November.