Shares in Spanish controlled CIMIC (the old Leighton holdings) slumped more than 21% yesterday in the wake of a soft half-year result.
The results were released Wednesday evening, well after the close of trading. In fact, they were issued in European time with its controlling shareholders based in Germany and Spain.
From the opening yesterday CIMIC Group shares lost ground quickly, falling to a two-year low after the construction contractor, mining services and engineering giant said its profit for the first half was up just 1.0% cent.
The shares ended down $8.69, or 19%, to $37.09. At one stage they hit a low of $36.09, the lowest since May 2017.
The move came after CIMIC on Wednesday evening said it had earned a profit of $367 million on a 0.3% rise in revenue to $6.95 billion.
It announced a 71 cent fully franked interim dividend, up from 70 cents last year.
CIMIC is around 70% owned by German group, Hochtief, which in turn is controlled by Spanish construction giant, ACS.
CIMIC must have realised the soft result would raise questions among investors and analysts, so the half-year statement made great play of the company’s strong financial position.
Executive chairman Marcelino Fernandez Verdes said CIMIC Group “remains in a strong financial position.”
“Our net cash and work in hand increased consistently and we have a strong foundation for profitable growth,” he added.
As at June 30, CIMIC said it had a robust balance sheet, with net cash of $1.4 billion and a diversified order book with $36.8 billion of work in hand, up 8.0% in the year to June 30.
That order book includes the Cross River Rail tunnel in Brisbane, maintenance work on Sydney trains, building an aquatic and indoor recreation centre in Christchurch, work on the Auckland Airports taxiway, Coffs Harbour Hospital expansion work and a number of mining contracts.
It’s also working on road and rail developments in Australia such as WestConnex in Sydney, the West Gate Tunnel project in Victoria and the Logan Motorway project in southeast Queensland.
CIMIC said it expected to make $790 million to $840 million for the 2019 financial year.