CIMIC growth led by ‘strong performance of the mining sector’

CIMIC Group has credited its mining contracts as a key factor in the company’s growth during 2018.

The contractor secured several major mining works through subsidiaries Thiess and Sedgman last year.

In October, Thiess secured a five-year, $1.2 billion mining services contract at the Mt Arthur coal mine in the Hunter Valley, New South Wales.

A month later the company was awarded an 18-month autonomous truck contract with Fortescue at its Christmas Creek iron ore project in the Pilbara, Western Australia.

CIMIC also secured extensions to Thiess coal contracts worth $140 million and $150 million at Glencore’s Mt Owen mine in New South Wales, and BHP Billiton Mitsubishi Alliance’s Caval Ridge mine in Queensland.

Sedgman, meanwhile, secured high-profile contract extensions in Queensland, including a five-year, $110 million contract at New Century Resources’ Century zine mine, as well as a $155 million extension at QCoal’s Byerwen coal mine.

CIMIC Group executive chairman Marcelino Fernández Verdes said the company’s strong position leading into 2019 had been aided by the mining industry.

“Demand for our operations is robust, led by the strong performance of the mining sector, an increasing level of infrastructure opportunities in Australia, and the trends towards more outsourcing of services and for greater investment in [public-private partnership],” Verdes said.

The contractor’s net profit and revenues were up 11 per cent to $781 million and 9 per cent to $14.7 billion respectively for the 12 months ending December 31 last year. The $781 million figure placed the company’s performance just above its 2018 guidance of $720–780 million.

CIMIC chief executive officer Michael Wright stated that the company was now positioned to achieve net profits after tax of $790–840 million in 2019.

“There are at least $130 billion of tenders relevant to CIMIC Group expected to be bid and/or awarded in 2019, and around $300 billion of projects are coming to the market in 2020 and beyond, including about $120 billion worth of [public-private partnership] projects,” Wright said.

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