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CIMIC’s revenue growth continues in third quarter

Civil engineering and services group CIMIC has named its new chief executive officer, and has firmed up its strong profit guidance for the 2017 calendar year.

CIMIC, formerly known as Leighton Holdings, announced on Wednesday it will promote Michael Wright to managing director and chief executive officer, on December 1.

Wright will replace Adolfo Valderas, who recently accepted a role with Spanish civil engineering company ACS Group.

Wright is being promoted from his current role as CIMIC’s deputy chief executive officer.

Meanwhile, the company also announced revenue of $3.3 billion in the third quarter of the 2017 calendar year, up 22% year-on-year, contributing to a full nine-month revenue of $9.6 billion, up 26%.

EBITDA is up 38% through the first nine months, to $1.1 billion, and net profit after tax is up 21% to $501 billion.

A number of major contract wins, totalling $4.5 billion, highlighted the third quarter, with several key mining contracts contributing to this.

During the quarter CIMIC was selected for mining services at FMG’s Solomon Hub through to 2020, the Jellinbah East coal mine in Queensland until 2020, and the Gunung Bara Utama and Mahakam Sumber Jaya coal mines in Indonesia through to 2024 and 2021, respectively.

Chairman Marcelino Fernández Verdes said the result showed CIMIC’s ability to leverage its workforce across Australia, New Zealand and Asia into revenue in the infrastructure, services and public private partnership (PPP) markets.

Fernández Verdes confirmed CIMIC’s net profit after tax guidance of $640 million to $700 million, subject to market conditions.

“We remain positioned to meet our 2017 guidance supported by the diverse nature of our operations and markets, and our proven experience in growing sectors,” he said.

“Our positive outlook has its foundations in our unchanging focus on maintaining a strong balance sheet, generating cash, and being disciplined in tendering.”

Fernández Verdes said CIMIC’s new $2.6 billion working capital cash facility would help it thrive in Australia.

“The financial flexibility provided by the new facility supports our existing operations, as well as our pursuit of business and capital allocation opportunities, including into PPPs,” he said.

“Australia has one of the world’s most well-developed PPP markets, which is expected to grow considerably in coming years. To date, CIMIC has delivered more than 20 PPP projects with a value of around $32 billion, demonstrating our core capability in this area and providing a strong platform for further growth.”

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