Heavyweight contractor Cimic Group Ltd (ASX: CIM) just secured a $540 million tunnel and infrastructure contract awarded by the Singapore Land Transport Authority.
Leighton Asia, a subsidiary of the group with a strong presence in Singapore, presented a successful bid as lead partner in a joint venture with local contractor Yongnam Engineering & Construction. The share of the project's revenue stream accruing to Leighton Asia will be approximately $380 million, making this one of the biggest contracts won by Cimic in 2018 so far.
Just a week ago, Cimic announced that UGL, another of its subsidiaries, secured $140 million in maintenance services contracts for clients in the Australian resources sector. As at March 31, Cimic has work in hand of $35 billion, and yesterday credit-rating agency Standard & Poor's upgraded the outlook for the company from negative to stable.
Despite the contract win, Cimic's share price fell 0.1% to $42.40 today. The stock is down 20% from its 52-week high in December, and now trades at a PE ratio of just about 18x, assuming FY18 earnings in the middle of the company's guidance range.
