Cimic Group Ltd (ASX: CIM) shares will be watched closely by investors once the market opens this morning. This comes after the company announced yesterday it has secured several contract extensions in the power industry.
The Cimic share price finished Wednesday's session 17% lower at $21.56 due to its disappointing full-year results.
Image source: Getty Images
What was announced?
The Cimic share price could be on the rebound today following a positive update to the market after Wednesday's session.
According to its release, Cimic advised its subsidiary, UGL, has won several power contract extensions involving maintenance and outage works.
The engineering company will deliver services across Western Australia, South Australia, and New South Wales.
It's estimated that the entire value of the contracts secured will generate around $110 million in revenue for the company.
Furthermore, Cimic noted that all of the contracts signed are effective from early 2021.
Management commentary
Cimic group executive chair and CEO Juan Santamaria touched on its services specialist business UGL, saying:
UGL has a history of delivering value to the Australian energy industry and we're proud to continue to do so by offering maintenance and shutdown services to these long-standing clients.
Commenting on Mr Santamaria's speech, UGL managing director Doug Moss went on to add:
These contract extensions are a testament to the adaptability and trust we share with our clients. We are proud of our ability to provide a safe and reliable service and we look forward to building on our relationships in 2021 and beyond.
Cimic share price snapshot
The Cimic share price has been on a bit of a rollercoaster since the beginning of last year. A major catalyst for its wild share price swings has been the severe impact of COVID-19 on the construction industry.
Shares in the engineering company reached a 52-week high of $28.72 last February. Soon after, Cimic shares took an extreme dip to a low of $11.87 during the March crash. While the company's shares rebounded to around the mid-$20's mark over the past few months, yesterday's full-year results release shook investor expectations.
Based on the current Cimic share price, the company commands a market capitalisation of roughly $6.7 billion.
