The Cimic Group Ltd (ASX: CIM) share price is one to watch this morning after the group announced it is scrapping its interim dividend amid a drop in net profit after tax (NPAT).
What were the financial highlights?
Cimic reported that its half-year revenue fell $0.8 billion from 1H19 to $6.2 billion for the half-year ended 30 June 2020 (1H20).
The company's $317 million NPAT result was achieved with a 5.1% NPAT margin. Cimic's $534.6 million operating profit was achieved on a margin of 8.6%.
Unsurprisingly, the coronavirus pandemic weighed on the company's result. That included delaying the award of new projects and a slowdown of domestic and offshore revenues.
Operating cash flow pre-factoring in the last 12 months was $1.3 billion, up $495 million year-on-year.
The Cimic share price will be worth watching as investors weigh up the underlying versus statutory result.
Cimic reported strong liquidity with gross cash of $4.0 billion and just $264 million of debt repayments due in the next 12 months.
Net debt totalled $1.3 billion with work in hand of $38.1 billion as at 30 June 2020.
COVID-19 update
Cimic's executive chair Macerlino Fernández Verdes said the outlook across Cimic's core businesses "remains positive".
The announcement also highlighted that a strong mining market and government stimulus for the construction and services market is good news for the year ahead.
CEO Juan Santamaria said the company's focus remains on "project delivery, cost efficiency measures, risk and working capital".
However, Cimic will not pay an interim dividend to shareholders following the half-year result.
What about the company's pipeline?
Cimic's infrastructure business Ventia also completed its acquisition of Broadspectrum on 30 June 2020. The acquisition is expected to generate annual revenue in excess of $5 billion and helped boost Cimic's work in hand by $3.1 billion.
Cimic also reported ~$70 billion of relevant tenders are expected to be bid and/or awarded for the remainder of the year.
There are also around $130 billion public-private partnership (PPP) opportunities identified for the remainder of 2020 and beyond.
The Cimic share price is down 40% since this time last year, and will be one to watch as investors evaluate the present results against future prospects.
