Australia’s largest contractor, Cimic Group, made a pre-tax profit of US$226m from revenue of $4.4bn in the first half of this year, a year-on-year fall of $570m.
The company says it has maintained a resilient operating profit supported by cost efficiency measures despite the coronavirus pandemic, however there was a slowdown in new work.
Cimic also announced the sale of half of its mining subsidiary, Thiess, to UK investment manager Elliott Advisors. Thiess is currently the world’s largest mining services company.
Marcelino Fernández Verdes, Cimic’s executive chairman, said: "The outlook across our core businesses remains positive, notwithstanding the impact from Covidâ€19 which has led to a temporary delay in the award of new projects and slowed down revenues in certain parts of our business."
"In our core construction and services market, numerous stimulus packages have been announced by governments, and there are additional opportunities through the strong PPP pipeline. In addition, after two years, our tendering licences have been reinstated in Hong Kong with immediate effect and we expect to ramp up our tendering activities."
Juan Santamaria, Cimic’s chief executive, said: "In the current environment, our strict attention to project delivery, cost-efficiency measures, risk and working capital is unchanged as we maintain our focus on generating sustainable cash-backed profits.
"We continue to apply our disciplined approach to tendering across the pipeline, which is now 17% larger compared with a year ago."
Earlier in 2020, shares in Cimic plunged 20% after it announced that it was to exit the Middle East and sell its 45% stake in Dubai’s BIC Contracting – formerly Habtoor Leighton Group. The decision resulted in a one-off, $1.3bn write-down in its 2019 results.
In 2019, Cimic had $1.1bn wiped off its market value after a Hong Kong financial research company claimed it had inflated profits with "aggressive" accounting techniques.
A similar share plunge occurred in 2016 after investment bank Morgan Stanley issued a report on the group that cast doubt on its headline accounting numbers.
In February of this year, Cimic subsidiary CPB Contractors announced that it was leaving the $4.5bn West Gate Tunnel project in Melbourne after a row over contaminated soil.
Image: Marcelino Fernández Verdes (www.hispanidad.com)