Cimic (ASX:CIM) share price races 5% higher on financial result

The global engineering company's shares are continuing their ascent this week.

| More on:
happy engineer, construction worker, mining employees, share price up, rise, increase

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Cimic Group Ltd (ASX: CIM) share price is surging higher today following the release of its 6-month financial result.

At the time of writing, the global engineering company's shares are up 4.79% to $19.91. In comparison, the S&P/ASX200 Index (ASX: XJO) is up 1.19% to 7,338 points.

Let's take a closer look at what the company announced to the ASX this morning.

How did Cimic perform for the first-half of FY21?

In today's release, Cimic reported its financial result for the last 6 months ending 30 June 2021.

According to the update, group revenue jumped to $7.1 billion, up 10.6% when compared to this time last year. The company's Australian Construction and Services business recorded a strong uptick in revenue which led the charge.

Earnings before interest, tax, depreciation and amortisation (EBITDA) stood at $464.5 million, compared to $442 million in H1 FY20.

Net Profit After Tax (NPAT) came to $208 million versus $205.3 million in the prior comparable term.

As such, EBITDA, Profit Before Tax (PBT) and NPAT margins remained resilient at 10.1%, 5.4%, and 4.5% respectively.

Free operating cash flow increased by $166.3 million to a loss of $115.9 million. Previously, the company recorded negative $282.2 million in free operating cash flow during H1 FY20. The positive shift reflected management's efforts in winning new projects and reducing capital expenditure and finance costs.

Cimic declared a strong balance sheet of $4.3 billion in liquidity, comprising $3.2 billion in cash and $1.1 billion in undrawn bank facilities. Net debt stood at $272.2 million at the end of June.

The company also declared an interim dividend of 42 cents per share, franked at 20% payable to eligible shareholders. This represents a 62.8% payout ratio on the H1 FY21 financial result.

Cimic group executive chair and CEO Juan Santamaria commented on the result:

Growth in revenue and profit during the first half of the year, along with a significant increase to our orderbook, provides Cimic with a confident outlook for 2021 and beyond.

The strong performance of our Australian Construction and Services segments supported the increase in revenue and resulted in an improvement in operating cash generation in the second quarter.

Outlook

Cimic noted its core businesses remain positive with numerous stimulus packages by governments in the Construction and Services markets. In addition, around $470 billion of tenders are to be bided/awarded for the remainder of 2021 and beyond.

The company reaffirmed its full-year NPAT guidance of $400 million to $430 million, subject to market conditions.

Mr Santamaria added:

We're seeing an increased volume of work coming to the market as a result of the various economic stimulus packages. The $10.4 billion in new work we secured in the past six months exceeds the $6.8 billion won in the 12 months to the end of 2020 and there is a substantial pipeline of work yet to be awarded

Cimic share price update

The last 12 months have seen the Cimic share price fall by around 12%, and 18% year-to-date.

Cimic presides a market capitalisation of roughly $6.2 billion, making it the 84th largest company on the ASX.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Happy young couple saving money in piggy bank.
Opinions

Want to start investing in ASX shares? Here's what I'd buy

This is where I’d begin to put my money in the stock market.

Read more »

A female ASX investor looks through a magnifying glass that enlarges her eye and holds her hand to her face with her mouth open as if looking at something of great interest or surprise.
Broker Notes

3 of the best ASX 200 shares to buy in 2025

Let's see why analysts at Bell Potter are bullish on these shares next year.

Read more »

People of different ethnicities in a room taking a big selfie, symbolising diversification.
Opinions

Want diversification? Get it instantly with these ASX 200 shares

Some businesses offer a lot more diversification than others.

Read more »

A happy man and woman on a computer at Christmas, indicating a positive trend for retail shares.
Opinions

2 ASX 200 shares I'd want to receive as a present today

Merry Christmas! Are there any stocks under your tree?

Read more »

a young woman raises her hands in joyful celebration as she sits at her computer in a home environment.
Share Gainers

Why Avita Medical, GenusPlus, Mesoblast, and Polynovo shares are storming higher

These shares are having a better day than most today. But why?

Read more »

Three guys in shirts and ties give the thumbs down.
Share Fallers

Why Charter Hall Retail, DroneShield, FBR, and St Barbara shares are tumbling today

These shares are having a tough time on Tuesday. But why?

Read more »

Contented looking man leans back in his chair at his desk and smiles.
Broker Notes

Leading brokers name 3 ASX shares to buy today

Here's why brokers believe that now could be the time to snap up these stocks.

Read more »

A female broker in a red jacket whispers in the ear of a man who has a surprised look on his face as she explains which two ASX 200 shares should do well in today's volatile climate
Broker Notes

2 of the best ASX shares to buy in 2025

Bell Potter is feeling bullish on these shares as the new year approaches.

Read more »