(Bloomberg) -- SNC-Lavalin Group Inc. said it will miss its full-year profit target due to a “serious problem” in its mining business and booked a write-down of C$1.24 billion ($937 million) at its energy unit amid a diplomatic spat between Canada and Saudi Arabia.

Adjusted profit from engineering and construction will be C$1.15 to C$1.30 a share in 2018, SNC said in a statement Monday. That’s down from an earlier forecast for profit of as much as C$2.85 a share. Overall profit for the year will be C$2.15 to C$2.30 a share, short of the C$3.60 to C$3.85 range that the Montreal-based company provided as recently as November.

SNC said it incurred additional costs in the fourth quarter to deliver the unidentified mining and metallurgy project. In addition, the company “cannot meet the required level of agreement” with its client to book revenue.

“This isolated incident is unacceptable and I intend to take appropriate actions to mitigate the financial impacts for the company,” Chief Executive Officer Neil Bruce said in the statement. SNC didn’t identify the troubled project, saying only that the contract was awarded in 2016.

The announcement dials up the pressure on SNC following the refusal last year by Canadian prosecutors to reach a negotiated settlement with the company over past corruption charges. The lack of a deal with Canada has probably cost SNC more than C$5 billion in lost revenue and continues to damage its reputation internationally, Bruce told BNN Bloomberg TV in an interview last month.

SNC said it would “aggressively” pursue project claims through the contract protocols “up to and including engaging in a dispute resolution process.”

Worse than expected trading challenges in oil and gas in the Middle East -- and Saudi Arabia in particular -- also weighed on fourth-quarter results, SNC said. More than 15 percent of the company’s global workforce is employed on work in Saudi Arabia, which has been a key source of revenue growth in recent years.

Saudi Arabia froze diplomatic ties and new business deals with Canada in August, following a call by Canadian Foreign Minister Chrystia Freeland for Saudi human rights activists to be released from prison.

The dispute sparked SNC to write down the fair value of its oil and gas segment by C$7.06 a share, as a result of impairment tests. “Inter-governmental relations between Canada and Saudi Arabia, together with unpredictable commodity prices and uncertain client investment plans, have led to deterioration in our near-term prospects which we cannot ignore,” SNC said.

To contact the reporter on this story: Frederic Tomesco in Montreal at tomesco@bloomberg.net

To contact the editors responsible for this story: Brendan Case at bcase4@bloomberg.net, David Scanlan, Jacqueline Thorpe

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