Corporate

Financial
14 April 2022

CIMIC Group Announces 2022 Q1 Financial Results - NPAT $108m; Revenue* $2.3bn, Guidance maintained

1Q22 NPAT $108M; REVENUE* $2.3BN

OPERATING CASH FLOW IMPROVED $296M

66% EBITDA CASH CONVERSION IN LTM

STRONG BALANCE SHEET POSITION; $4.3BN OF LIQUIDITY

NEW WORK OF $4.2BN FY22 NPAT GUIDANCE $425M TO $460M MAINTAINED, SUBJECT TO MARKET CONDITIONS

CIMIC Group today announced its financial result for the three months to 31 March 2022:

  • NPAT of $108m
    • Revenue up 7% to $2.3bn, with growth achieved in Australian Construction and Services; JV revenue impacted by Ventia dilution following IPO
    • EBITDA, EBIT and NPAT margins1 of 10.0%, 7.6% and 4.6% respectively versus 9.8%, 6.8% and 4.4% in 1Q21 on a comparable basis
    • NPAT includes impact of CCPP settlement
  • Operating cash flow2 improved by $296m compared to 1Q21
    • EBITDA cash conversion pre‐factoring in LTM was 66% (versus (5)% in LTM to 1Q21); 95% excluding Leighton Asia
    • Factoring stable at $449m
    • Focused on managing working capital, generating sustainable cash‐backed profits and rigorous approach to tendering, project delivery and risk management
  • Strong balance sheet position supported by $4.3bn of liquidity
    • Net debt3 improved by $8m since December 2021 to $(490)m
    • Investment grade ratings maintained (BBB‐/A‐3/Outlook Stable) by S&P and (Baa2) by Moody’s; under review by Moody’s
  • New work of $4.2bn4 in 1Q22
    • Total WIH5 of $28.5bn, adjusted for Ventia as an investment; well diversified across Construction, Services and Mining
    • As at 31 March 2022, the pipeline of relevant tenders to be bid on / awarded is approximately $495bn for the remainder of 2022 and beyond, including around $115bn of PPP opportunities
  • Outlook across the Group’s core markets remains positive
    • FY22 NPAT guidance of $425m‐$460m maintained, subject to market conditions
    • Guidance supported by strong level of work in hand and positive outlook across the Group’s core markets

CIMIC Group Executive Chairman and Chief Executive Officer Juan Santamaria said: “CIMIC’s revenue and profits increased during the first quarter, with growth in our Australian Construction segment and additional operations and maintenance work contributing to the Services segment.”

CIMIC was awarded new work of $4.2 billion during the three months to March, bringing work in hand to $28.5 billion, compared with $27.7 billion at December 2021 when adjusted for Ventia as an investment. Major contracts announced during the period included:

  • Sydney Metro – Western Sydney Airport works, NSW – $395m
  • Western Harbour Tunnel – Southern Tunnelling works, NSW – $350m
  • New work in Hong Kong – $104m
  • Augusta Highway Duplication – Port Wakefield to Lochiel, SA – $132m
  • Olive Downs South, QLD – $1.5bn6
  • Data centre campus, Indonesia – $103m
  • Renewables and utilities contracts, QLD & SA – $296m
  • Hunter Power Project generation plant, NSW – $185m
  • MSJ contract renewal, Indonesia – $300m6
  • Several other maintenance contracts for projects across the rail, mining and oil & gas sectors, Australia.

Mr Santamaria said: “We are looking at a strong pipeline of opportunities ahead driven by government investment in infrastructure.

“Projects coming to market typically have more equitable sharing of risk, however skills shortages and the escalation of material and fuel costs remain a focus. We are seeking to mitigate the impact by upskilling and cross-skilling our people, securing supply contracts upfront, procuring and storing materials or commodities, or undertaking financial hedging.”

Takeover offer
The off-market takeover bid made by Hochtief Australia (Hochtief) for all the CIMIC shares which it does not own, for $22 cash per share, is currently scheduled to close at 7.00pm (Sydney time) on 26 April 2022, unless further extended. The Independent Board Committee (IBC) appointed by the CIMIC Board to evaluate and respond to the offer has recommended that CIMIC shareholders accept, in the absence of a competing proposal and subject to the independent expert appointed by the IBC continuing to conclude that the offer is fair and reasonable. Hochtief has acquired an interest in 94.68% of CIMIC shares, as at 11 April 2022.

Refer to ‘Analyst and Investor Presentation’ for further information here.

* Key terms referred to in the headings are defined below
1 Margins are calculated on revenue (‘statutory revenue’) which excludes revenue from joint ventures and associates
2 Operating cash flow includes cash flow from operating activities and changes in short term financial assets and investments before interest, finance costs and taxes
3 Net debt includes cash and equivalent liquid assets (which includes cash, cash equivalents and short-term financial assets and investments)
4 New work includes new contracts and contract extensions and variations, including the impact of foreign exchange rate movements and other WIH adjustments, and includes an estimate of CIMIC’s share of the new work won by Ventia in the period
5 WIH includes CIMIC’s share of work in hand from joint ventures and associates
6 Relates to new work awarded to Thiess (at 100% Thiess value)