Cimic Annual Profit Hits Top End of Expectations -- Update
February 09 2016 - 6:06PM
Dow Jones News
By Rhiannon Hoyle
SYDNEY--Cimic Group Ltd. (CIM.AU) reported a 23% decline in
annual profit following the sale of some businesses, but said
earnings were at the top end of expectations as the company drove
down costs to bolster margins.
Cimic, Australia's biggest construction company, reported a net
profit of 520.4 million Australian dollars (US$367.8 million) for
the year through December. That compared to A$676.5 million the
year earlier, before Cimic sold some businesses including its John
Holland building division.
Earnings were at the top end of an earlier company projection of
A$450 million-A$520 million. Cimic forecast profits to rise to
between A$520 million and A$580 million this year.
"We have improved margins by reducing overheads and effectively
managing financial and other costs," said Chief Executive Marcelino
Fernández Verdes. Cimic's profit margin improved by 150 basis
points to 6.3%, the company said.
"Our activity focused operating model, and increased attention
to cash and cost control, delivered a solid result and has put us
in a strong net cash position," said Mr. Fernández Verdes.
The company declared a final dividend of 50 Australian cents a
share. 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).
Cimic has in recent years grappled with a slide in the value of
its contract-mining order book, and has instead focused on winning
infrastructure projects to build everything from casinos in Macau
to airports in the Middle East.
Still, on Wednesday the company said its cost-cutting efforts
were helping Cimic win new work on mines in countries such as
Australia and Indonesia. The group secured total new deals worth
A$14.13 billion during 2015, taking its year-end pipeline of work
to A$29 billion, it said.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
(END) Dow Jones Newswires
February 09, 2016 17:51 ET (22:51 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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