Everything you need to know about CIMIC’s 2019 full-year results

We examine some of the key things revealed as part of CIMIC’s full-year results.

CIMIC share price: the story so far

The CIMIC (ASX: CIM) share price hit a 52-week low yesterday – ending out the session at $28.17 per share. Though it rebounded today, following the release of the company’s full-year results, it still trades well-off its yearly high of $51.5 per share.

Indeed, it’s been a bumpy 12-months for the ~$9.6 billion construction giant: a short report that accused the company of inflating profits, minimising losses on the company’s Middle East investment and flattering cash flows through the use of financial factoring was likely one contributing factor to this protracted sell-down.

Though the company saw some investor optimism return in the last few months – with the stock trading around the ~$35 per share mark into January – the revelation that the company would be exiting the Middle East and taking a $1.04 billion write-down in the process, saw the stock fall again.

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Full-year optimism may be returning

Maybe though, investors are back on-board with CIMIC – as its share price was bid some 2.77% higher in the first 30 minutes of trade this morning off the back of yesterday’s after-market, FY19 release.

Here, CIMIC posted results that saw net contract debtor figures decline, cash flow improve; the company’s mining segment also recorded impressive sales growth.

On the top-line, the company posted revenues of $14.7 billion, operating cash flow of $1.7 billion and net cash of $832 million. Impressively, CIMIC’s mining segment saw sales increase 13% in FY19.

The construction giant further noted that it returned some $526 million to shareholders – through a combination of buy-backs and dividends in the 2019 fiscal period. This comes even after considering the suspension of the company’s FY19 Final Dividend.

Moreover and when excluding the Middle Eastern exit from BIC Contracting (BICC); on the bottom-line the company reported earnings (NPAT) of $800 million – representing a year-over-year increase of 3%.

Looking forward, the company now expects FY20 earnings (NPAT) in the $810 million to $850 million range. Such estimates, are of course, subject to market conditions, notes the company.

Speaking of these results, CIMIC Group's Executive Chairman – Marcelino Fernandez commented: 'Our construction, mining and mineral processing, services and public private partnership operations continued to perform well during 2019, in line with our expectations.'

Commenting on the construction giant’s decision to exit the Middle East, Mr Fernandez further said:

'Our decision to exit our financial investment in the Middle East will allow us to focus our resources and capital allocation on the growth opportunities in our core markets in Australia, New Zealand and the Asia Pacific.'

CIMIC also announced that Juan Santamaria would commence as the Group's CEO, effective today: 5 February.

By 11:19 (AEDT) Wednesday, the CIMIC share price continued to trend up – trading at $29.96 per share – some 6.64% higher than it did at Tuesday's close.

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