Construction and contract mining giant CIMIC has rewarded shareholders with a 25 per cent increase in dividends as revenue growth in all of its core businesses contributed to a 22 per cent rise in half year profit.
The company involved in major road projects including Sydney’s WestConnex and the widening of Melbourne’s CityLink made a net profit of $323 million in the six months to June 30, up from $265 million in the same period a year ago.
CIMIC, which is 73 per cent owned by Germany’s Hochtief, increased its fully franked interim dividend by 12 cents to 60 cents per share.
A substantial increase in the company’s net cash position had allowed CIMIC to better reward shareholders and more efficiently allocate capital, executive chairman Marcelino Fernandez Verdes said.
CIMIC confirmed its guidance for a full year net profit of $640 million to $700 million, an improvement on the previous year’s $580 million.
Chief executive Adolfo Valderas said the company was achieving strong profit and cash flow contributions from its construction, mining, services, and public-private partnership operations.
In the six months to June, CIMIC increased its work-in-hand by $8.9 billion to a total of $35.2 billion, equivalent to more than two years of revenue.
Important contract wins included stage 2 of design and construction works for the Sydney Metro rail project, mining services work at the Solomon iron ore mine in Western Australia and the Mount Pleasant coal mine in NSW, and the construction of Hong Kong’s East Kowloon Cultural Centre.
CIMIC said its growth would be supported by nearly $50 billion of tenders over the rest of 2017, and $320 billion of projects coming to the market from 2018.
Its shares were up 70 cents, or 1.8 per cent, at $39.07 at 1325 AEST.
CIMIC LIFTS PROFIT AND DIVIDEND
* Half year net profit up 22pct to $323 million
* Revenue up 28pct to $6.3 billion
* Interim dividend up 12 cents to 60 cents, fully franked