Cimic Group Limited (ASX: CIM), a subsidiary of HOCHTIEF Australia Holdings Limited, is based in North Sydney and provides engineering-led construction, mining, mineral processing, as well as O&M services along with public-private partnerships, working across the lifecycle of property, infrastructure and resources projects.
Recently, on March 15th, CIMIC Group company UGL, as part of a joint venture, secured a new contract to continue providing services on the Karratha Gas Plant (KGP), operated by the Perth-based Woodside Energy Limited. The KGP plant is situated 1,260 km north of Perth and encompasses two domestic gas trains, three LPG fractionation units, five LNG processing trains, six condensate stabilisation units, along with storage and loading facilities for LNG, LPG and condensate. It has a daily capacity of 12k tonnes of domestic gas.
The new contract will generate additional revenue of ~ $ 190 million for UGL and further includes multi-year extension options. UGL has been engaged with the project since 2015.
Cimic Group Limited has a market cap of AUD 15.69 billion, and the CIM stock price closed the day’s trading session at AUD 49.685, up 2.65% on Friday, March 15th.
The Group reported a strong operating performance, outstanding financial results and a robust balance sheet for the year ended December 31st, 2018 (FY2018). The net profit after tax was rose by 11% to $ 781 million, that is at the top of their guidance of $ 720 million – $ 780 million a prescribed. The revenue increased by 9.2% on FY2017 to $ 14.7 billion with growth recorded from all operating companies. Besides, the EBIT, PBT, NPAT margins were also stable at 7.8%, 7.3% and 5.3% respectively primarily driven by a consistent focus on project delivery and cost discipline.
The cash flow from operating activities amounted to $ 1.9 billion, up 225 on FY2017 along with an EBITDA conversion rate of 109% in FY2018. At the end of the period, the net cash in hand stood at $ 1.6 billion, up $ 708.5 million since FY2017 and the gross debt reduced to its lowest level of $ 522.8 million since 2007. Final fully franked dividends of 86 cents per share, up 14.7% on FY2017, have also been declared to be paid out on July 4th, 2019. This brings the total fully franked dividend for the year to 156 cents per share, up 15.6% on FY2017, and representing a payout ratio of 64.8%.
With the onset of 2019, Cimic Group further expanded its portfolio of work in hand across core businesses as it continued to bag a string of contracts. These include an AUD-172 million contract extension from Bayan Resources to expand operations at Melak in East Kalimantan, Indonesia; a $ 1.26 billion design, build, finance and maintain contract from Transport for NSW, secured by the Group’s companies Pacific Partnerships, UGL and CPB Contractors (Momentum Trains consortium) for the Regional Rail Project; $ 90-million package of gas gathering and infrastructure works assigned to CPB Contractors for Australia Pacific LNG (APLNG) in the Surat Basin, Queensland and many others.
Going forward, the Group reports having an extensive project pipeline in the key markets.
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