Cimic Group Limited’s (ASX: CIM) company UGL has now successfully obtained an extension for the contract of supplying maintenance and turnaround services for the clients in the oil and gas market. The fresh contracts will give a combined revenue to UGL of almost $200 million and will be carried across several years’ time period.
With a history since 1899, Cimic is a frontrunner in the international market for infrastructure, mining, services and public partnerships group. The various businesses run by Cimic includes CPB Contractors and Leighton Asia, Thiess and Sedgman, UGL, Pacific Partnerships and EIC Activities.
The contracts secured by Cimic’s UGL aim to fulfil maintenance and turnaround services in Western Australia, whereas the other services for maintenance, plant turnaround and brownfield execution services will be delivered by UGL.
Earlier on 3rd January 2019, Cimic Group added another feather in their cap, when they announced that the company’s CPB Contractors was chosen by the NSW Government to build the Coffs Harbour Hospital Expansion Main Works. The deal will involve renovation of the hospital building and further a new building will be developed with all the required medical care departments. The buildings will be connected at the bottom two levels. CPB contractors are expected to gain approx. $116 million with the contract. The project is planned for April 2019 with the deadline of 2021.
Cimic retained its position as a leading international contractor and the mining services provider, gaining $7.1 billion worth of additional work. The new work was broadly diversified by activity which supports the generation of sustainable returns to shareholders. The Group’s total work in hand in monetary terms was $34.8 billion at 30 June 2018, equivalent to more than two years of revenue. Also, the work in hand in the Group’s Operating Companies was $31.8 billion, up 7.2%, or $2.1 billion compared to 30 June 2017.
The Group has a vigorous pipeline with at least $80 billion of tenders relevant to Cimic still to be bid or awarded in 2018, and around $330 billion of projects are coming to the market in 2019 and beyond, which includes around $100 billion worth of PPP projects.
Cimic continues to consider opportunities to spread into new areas and sectors by leveraging its existing capabilities and is continuing to analyse acquisition opportunities. The Group’s positive outlook has its foundations in a continued focus on sustaining a strong balance sheet, generating cash, and maintaining discipline in tendering and project delivery. This focus, combined with the Group’s strong competitive position and the opportunities across core markets, provides a solid base for the generation of sustainable returns.
Stock performance: CIMIC ended the day’s trading session at A$44.770, down by 0.38% with a market capitalization of A$14.57 billion and 324.25 million outstanding shares. With a performance change of 88% since its inception, the stock has generated a return of 5.07% this year to the investors.
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