CIMIC Group’s, Sedgman Wins $100 Million Operations And Maintenance Contract

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Global contractor CIMIC Group flags $100 million operations, maintenance contract awarded to its mineral processing company, Sedgman.

In a market release dated 6 November 2018, CIMIC Group Limited (ASX: CIM) announced that its subsidiary Sedgman has secured an operation and maintenance contract from two coal explorers Mach Energy and QCoal in respect of coal handling and preparation plants (CHPP) for a combined contract value of $100 million.

Under the terms of contract with Mach Energy, Sedgman has to operate and maintain the Mount Pleasant site at Muswellbrook in New South Wales which will generate $75 million revenue over the term of three years. 

Whereas the mining company QCoal has contracted Sedgman to operate and maintain its Byerwen site at Glenden in Queensland that in turn will generate approximately $25 million revenue to Sedgman over the period of one year. This outlines a strong work relation between Sedgman and QCoal as mineral processor Sedgman has been involved throughout the Byerwen project from the procurement, engineering to the construction of the train load-out, stockpile and coal handling and preparation plants (CHPPs).

CIMIC Group Chief Executive Officer Michael Wright stated that Sedgman has a strong track record of operating and maintaining CHPPS, and by winning these further contracts the company has highlighted its ability to provide end to end solutions for mineral processing.

Operations at Mount Pleasant site are expected to start by the end of 2018 but as per the company’s information, CHPP at Byerwen has already been commissioned.

Sedgman Managing Director Grant Fraser stated that Sedgman has developed a strong working with QCoal over the number of years. He added that with the award of this contract the company would complete the work cycle at project Byerwen.

Last week CIMIC Group announced that its construction company CPB contractors have been selected by Australian and NSW governments to advance the upgradation of existing road infrastructure between Luddenham and Glenmore Park. It is under the governments’ plan to upgrade the Northern Road and Bringelly Road as part of the Western Sydney Infrastructure program, a $3.6 billion governments’ plan to support integrated transport in the region and capitalize on the economic benefits from developing the Western Sydney Airport at Badgerys Creek.

The construct-only contract with Roads and Maritime Services which is to be delivered as part of the $1.6 billion ‘The Northern Road upgrade project’ will reportedly generate the revenue of approximately $170 million for CPB Contractors. It has been expected that construction will commence in 2019 and finish in 2022.

Despite winning a new contract, CIMIC group has been trading at lower levels today. The share price of CIMIC Group Limited has fallen by 0.021% or $0.010 to close at $46.850 on 6 November 2018, while its PE was 20.480 x with market capitalization of $15.19 billion. Looking to the past performance of the stock, it has been observed that CIM’s stock price has dropped by 6.82% over the past one year.


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