CIMIC Group has disclosed a drop in net profit during the past nine months, but says it is closer to finalising the sale of its Thiess subsidiary.
CIMIC Group has disclosed a 17 per cent drop in its net profit during the past nine months, but says it is closer to finalising the sale of its Thiess subsidiary.
CIMIC reported net profit after tax of $474 million for the nine months to September 30, down from $573 million on the same time last year.
Its revenue was also down, falling from $10.7 billion to $9.3 billion.
That was due to a slowdown in activities and temporary delays in contract awards as a result of the COVID-19 pandemic, CIMIC said.
The company, however, is progressing negotiations with a buyer for its mining services division.
The Sydney-based group in July announced the likely sale of a 50 per cent stake in Thiess to an affiliate of investment firm Elliott Management.
CIMIC is in talks to sell down its stake in Thiess with UK-based Elliot Advisors, which CIMIC says is the world’s largest mining services provider. The proposed sale would give joint control of Thiess to both companies.
Negotiations were expected to finish in the coming days, CIMIC chairman Marcelino Fernandez said.
“The introduction of an equity partner into Thiess capitalises on the outlook for mining, provides capital for Thiess’s continued growth and enables CIMIC to strengthen its balance sheet,” he said.
Chief executive Juan Santamaria said infrastructure had a significant role in the economic recovery from COVID-19.
“We continue to work with governments to progress the future infrastructure pipeline and to support our clients to fast-track and deliver projects in construction, services and mining,” he said.
“Our focus remains on closely managing capital expenditure and working capital, and generating sustainable cash-backed profits.”
CIMIC’s work in hand stands at $35.5 billion. Its recent project wins include resources and water infrastructure projects in Western Australia and Queensland, through its Sydney-based CPB Contractors division.
CIMIC said it could also have a further $25 billion worth of potential contracts that are expected to be awarded before the end of the year.
About $525 billion worth of projects would come to the market in 2021, CIMIC said.
Its shares closed up 9.2 per cent to trade at $22.17.
