CIMIC confident in commodity strengths

Thiess has waived all remaining conditions in its takeover offer for MACA, providing its shareholders with cash consideration certainty.

CIMIC Group chairman and chief executive officer Juan Santamaria expects the company’s position will strengthen due to growth in Australia’s major commodity exports over the next two years.

According to Santamaria, Australian major commodities will grow between 4 and 9 per cent in the next two years.

“The fact that we are a reliable partner further strengthens our position. We have an unmatched track record for major projects and PPPs (public-private partnerships) – a demonstration of our ability to effectively develop, invest in, deliver and manage assets,” Santamaria said at the company’s 2021 annual general meeting.

The chief reinforced that CIMIC continued to pursue growth opportunities in its core activities of construction, mining, mineral processing, services and PPPs.

CIMIC is also expecting its share price performance to lift when the company wins new work.

“Our focus continues to be on winning new work, delivering successful projects and generating cash-backed profits, from which we can remunerate shareholders,” Santamaria said.

“By doing these things well, and by continuing to reward shareholders via dividends, we expect the intrinsic value of the company to be reflected in our share price.”

CIMIC has upcoming contract work at the BHP Mitsubishi Alliance (BMA) mine extensions in Queensland and Rio Tinto’s Winu copper mine in Western Australia.

The company’s 2021 guidance is between $400 million to $430 million net profit after tax.

“We are seeing opportunities starting to come to market and we are well positioned in our sectors,” Santamaria said.

CIMIC completed the sale of a 50 per cent interest in Thiess to Elliot Advisors in December last year.

In December, Santamaria said this did not moderate the importance of the mining services company to CIMIC.

“An important milestone for 2020 was the completion of the sale of 50 per cent of Thiess. This allowed us to capitalise on Thiess’ strong performance and positive outlook, while retaining a strategic interest in the sector,” Santamaria said.

“Thiess continues to be core to our business. Co-ownership is functioning seamlessly, and we and our partner are very much aligned on operational decisions and growing the business.”

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