Churchill Corp. records $64.6 million of asset writedowns in fourth quarter

CALGARY – The Churchill Corp. (TSX:CUQ) has recorded a net loss of $62.6 million or $2.56 per share in the fourth quarter after writing down the value of two business units acquired three years ago as part of the Seacliff Construction takeover.

The $64.6 million of writedowns in goodwill, equipment and intangible assets related to the Canem and Broda construction businesses acquired in May 2010 when Churchill purchased Seacliff in a $390-million friendly deal.

Writedowns of this nature usually reflect a reduced estimate of the long-term value of an acquired business or equipment.

Excluding those non-cash items, Churchill would have had $400,000 or two cents per share of net income in the fourth quarter of 2012.

The quarter ended a difficult year for Churchill Corp., a national construction services company.

Revenue for the fourth quarter was $289.9 million, a 25 per cent decline from $384.3 million a year earlier. The backlog of work at the end of December was $1.69 billion, down from $1.84 billion a year earlier.

The Calgary-based company announced last week that the University of Manitoba was terminating a contract to manage the renovation and construction of Tache Hall and said that would be reflected in the fourth-quarter backlog.

In the fourth quarter of 2011, Churchill had $7.3 million of net earnings amounting to 27 cents per diluted share.

For the 12 months ended Dec. 31, Churchill had a $61.9-million net loss or $2.54 per share with $1.2 billion of contract revenue. A year earlier, net income was $24.9 million or 94 cents per diluted share on $1.4 billion of contract revenue.