CIMIC Group’s ‘Thiess’ wins $150 million contract extension at Caval Ridge

CIMIC Group’s ‘Thiess’ wins $150 million contract extension at Caval Ridge

CIMIC Group Limited (ASX: CIM) announced the award of $150 million contract won by its global mining services provider, Thiess. It outlines the contract extension with Australia’s leading coal producer BHP Billiton Mitsubishi Alliance (BMA) for its Caval Ridge coal mine located in Queensland’s Bowel Basin.

The company stated that following the extension of the contract, Thiess would provide its mining and mineral processing services at Caval Ridge until 2020. The work was first started in November 2017 which is now reported to be continued by Thiess for specific mining work components including the services required for Caval Ridge Southern Circuit.

Chief Executive Officer of CIMIC Group, Michael Wright, stated that the award of contract extension underscores the strong work relation between CIMIC Group and BMA.

CIMIC Group’s Executive Mining and Mineral Processing and Thiess Managing Director Douglas Thompson stated that this BMA’s contract reflects the Thiess strong track record in delivering considerate value and productive operations to its clients.

This news comes just after the CIMIC’s construction business unit CPB Contractor won WestConnex Rozelle Interchange contract in an equal partnership venture with John Holland. The company reported that interchange would generate approximately $1.95 billion in revenue to the CIMIC Group.

On the Financial front, international contractor CIMIC Group has posted 13% YoY growth in NPAT for the nine months to 30 September 2018. Driven by the continued revenue growth of 11% YoY to $10.7 billion, the Net Profit After Tax of the Group increased to $564 million. As a result, EBIT, PBT, and NPAT margins were maintained at stable levels of 7.7%, 7.2%, and 5.3% respectively.

CIMIC Group has flagged cash conversion of 101% during the last 12 months with strong cash generation, told, Marcelino Fernández Verdes, Executive Chairman of CIMIC Group.

CIM’s Cash Flow from operating activities was reportedly up 16% to $1.1 billion compared to the same nine months period during 2017. Whereas a free operating cash flows were $572 million in the reporting period and $1.1 billion in the last 12 months as at 30 September 2018. Moreover, its balance sheet was backed by the order book of $35 billion with operating companies’ work in hand up by $1 billion YOY basis.

During the reporting period, the company has announced several projects including $1.3 billion in construction projects across Australia, New Zealand, and Asia and $722 million in mining contracts in Australia and South America among others.

Looking in 2018, the company confirmed the guidance for 2018 NPAT to be within the range of $720 million to $780 million.

Commenting on company’s outlook, Mr. Fernández Verdes said that CIMIC Group has a positive outlook going forward with the expanding footprints in core markets including PPPs increasing opportunities in construction and services as well as continued growth in mining and mineral processing business.

In today’s trading session, CIMIC Group’s share price plunged 1.965% to last trade at $42.410 on 18 December 2018. Its Price to Earnings ratio was 18.910 x with a market capitalization of $14.03 billion. However, in the past six months, stock performance has gone up by 5.26%.


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