Engineering, Logistics, Ports & Terminals, Mining and Heavy Industries

CIMIC slammed despite net profit

Shares in construction and contracting firm CIMIC have fallen roughly 20% in early trading, despite the company announcing a first half profit increase of 3.1%.

CIMIC, formerly known as Leighton Holdings, announced its half-yearly figures on Tuesday.

The good news for shareholders was a net profit after tax of $265.2 million, up 3.1% year-on-year, as well as confirmed guidance for the full year of between $520 million and $580 million.

The bad news was revenue was down 31% year-on-year, to $4.95 billion.

The market appeared to react swiftly to the latter figure, with CIMIC’s share price down 20% on Wednesday morning.

After closing on Tuesday at $33.29, shares opened on Wednesday (after the announcement) at just $28.50, and were down to $26.80 by 12.40pm.

CIMIC boss Marcelino Fernandez Verdes was, unsurprisingly, more upbeat about the result than the market was.

“The quality of CIMIC Group’s result further improved during the period, reflecting the ongoing benefits of our transformation strategy,” he said.

“Through improvements in our project delivery and risk management we steadily increased margins.

“In the second quarter, our revenue returned to growth showing a positive emerging trend that we expect will continued.

“With a sound balance sheet and increased net cash we are in a position to pursue growth originally as well as through PPPs and other investment opportunities.”

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