CIM CIMIC Group Limited

   By Rhiannon Hoyle 
 

SYDNEY--Construction and mining services contractor Cimic Group Ltd. (CIM.AU) said first-half profit jumped by 12%, underpinned by a booming infrastructure market and mining-sector recovery.

The Australia-listed company on Wednesday reported a net profit of 363 million Australian dollars (US$267 million) for the six months through June, reflecting an 11% gain in revenue, which increased to A$6.9 billion.

The company stuck with an earlier forecast for a A$720 million-A$780 million profit in 2018, up as much as 11% on 2017, and said it would pay an interim dividend of A$0.70 a share, up 17%.

Cimic said a solid pipeline of contracts signaled a positive outlook for the business. Work-in-hand stood at A$34.8 billion, below A$36 billion at the start of its fiscal year, but included A$7.1 billion of new work, said the company.

In recent months, Cimic's contract wins have included a A$480 million deal with QCoal for mining services in Australia and a tunnel and infrastructure deal in Singapore, worth about A$380 million to the company.

Cimic said an ongoing campaign to cut costs was also bolstering profits.

"Reducing complexity and cost from our operating model is an ongoing focus at Cimic, assisting us to maintain consistent margins," said Chief Executive Michael Wright.

"Combined with a solid operating performance across our construction, mining and mineral processing, services and public private partnership segments, we are in a strong position," he said.

Cimic is majority owned by Germany's Hochtief AG (HOT.XE), which is controlled by Spain's Actividades de Construccion y Servicios S.A. (ASC.MC).

The company has in recent years expanded by acquiring companies including engineering services company UGL and mineral processing company Sedgman.

Executive Chairman Marcelino Fernandez Verdes said a roughly doubling of Cimic's net cash balance, to A$1.3 billion, would help the company pursue further strategic growth plans.

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

(END) Dow Jones Newswires

July 18, 2018 02:42 ET (06:42 GMT)

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