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Genivar first-quarter profits, revenues increase on U.K. acquisition

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(Globalpost/GlobalPost)

MONTREAL - Genivar's profits increased 41 per cent in its latest quarter as it continued to realize the benefits from last year's acquisition of U.K.-based WSP Group.

The Montreal-based engineering and consulting firm said Wednesday it earned $14.1 million or 27 cents per share for the quarter ended March 30.

That compared with $10 million or 31 cents per share a year ago when it had fewer shares outstanding.

Revenues increased to $406.8 million from $137.1 million, reflecting the contribution from WSP Group PLC, acquired last August for $442 million in cash.

"I am pleased with our performance, which meets our targets within our previously disclosed outlook," president and CEO Pierre Shoiry said in a statement.

"Emerging markets such as Colombia, the Middle East, China and India posted double-digit organic growth in the first quarter. Our largest regions continue to be resilient and stable and, as we build upon our global reach and expertise, these results reinforce our confidence in our ability to meet our 2013 targets."

Genivar (TSX:GNV) was expected to earn 35 cents per share on $403 million of revenues in the quarter, according to analysts polled by Thomson Reuters.

The results were impacted by amortization of intangibles relating to the WSP transaction. Excluding this factor, it earned $18.3 million or 36 cents per share.

Pre-tax operating income or EBITDA was $37.1 million, in line with analyst estimates of $38 million and up from $21.2 million a year ago,

Genivar, which plans to change its name to WSP, financed the acquisition by raising $225 million on the public markets and $197 million in private placements with two of Canada's largest public pension funds, which were already shareholders.

Maxim Sytchev of Dundee Securities said Genivar is "generating organic momentum."

Its order backlog was $1.4 billion or 8.7 months of work, with the Canadian backlog appearing to increase 12 per cent, he wrote in a report.

"The Canadian showing is in line with expectations as stronger performing Western provinces are doing better compared to Quebec and Ontario."

Sytchev said Genivar's shares have increased 23 per cent this year as investors are gaining more comfort that the WSP acquisition is actually working.

Pierre Lacroix of Desjardins Capital Markets described the results as negative.

But he said a 2.5 per cent growth in organic WSP revenues underlined the timeliness of the acquisition. Revenues of Genivar's legacy business decreased by 6.6 per cent.

Genivar has 15,000 employees — mainly engineers, technicians, scientists and architects, as well as various environmental experts — based in more than 300 offices in 35 countries.

On the Toronto Stock Exchange, Genivar's shares closed down 43 cents, or 1.8 per cent, at $23.51 in Wednesday trading.

http://www.globalpost.com/dispatch/news/the-canadian-press/130508/genivar-posts-lower-eps-q1-revenues-higher-uk-acquisition