Mining drives CIMIC performance

Several new mining contracts and extensions have bolstered the performance of CIMIC during the past quarter.

The Spanish-controlled group, which owns mining services companies Thiess and Sedgman, today announced year-on-year growth of 10 per cent to its core businesses, 17 per cent to operating cash flows and a strong net cash position of $912 million, up $634 million from this time last year.

CIMIC was particularly prolific in mining, with the industry generating the most revenue for the group by far.

The standout projects CIMIC announced during the quarter included services for the Dawson South, Mt Arthur and Mt Owen mines in Australia, as well as the Wahana, Satui and Senakin mines in Indonesia, which collectively generated revenues of $1.2 billion.

By comparison, the company’s infrastructure projects such as Royal Australian Navy frigate maintenance ($250 million), the building of the Cavite Laguna expressway in the Philippines ($182 million), maintenance work on South Australia’s Tailem Bend solar farm ($170 million) and asset management and project services at BP’s Australian fuel terminals ($150 million), while impressive figures in their own right, failed to generate the same revenues for CIMIC as the mining sector.

CIMIC chairman Marcelino Fernández Verdes said that the first quarter results illustrated the strong position of the business.

“We have increased revenue and cash-backed profit, and maintain a positive outlook,” he said. “Our balance sheet remains strong, and we continue to consider ways to use our capital that will create long-term value in the best interests of our shareholders,” Verdes said.

CIMIC chief executive officer Michael Wright said that the company had continued to optimise operational performance over the quarter, saying it had a strong “pipeline of opportunities”.

CIMIC has a further $100 billion of tenders to be bid and awarded in the rest of 2018, and $300 billion in 2019 and beyond, according to the company’s statement. Its guidance for 2018 is between $720–780 million, subject to conditions.