CIMIC Group’s strong performance continued in the 12 months to 31
December 2017, with the achievement of substantial profit growth and
cash flow generation and increased work in hand.
Highlights of the 2017 result compared with 2016 were:
- NPAT of $702 million, up 21%, at the top end of guidance of $640 million to $700 million
- Revenue of $13.4 billion, up 24%, with solid contributions from all core businesses
- Strong EBIT, PBT and NPAT margins5 of 7.5%, 7.1% and 5.2% respectively
- Strong cash flows from operating activities of $1.5 billion, up 27%; EBITDA cash conversion rate of 101%
- Free operating cash flow6 of over $1.0 billion, up 12%
- Net cash of $910 million at December 2017, up by more than $500 million
- New work of $18.4 billion; work in hand of $36 billion, equivalent to more than two years’ revenue, up 15% in core businesses
- Guidance for 2018 NPAT in the range of $720 million to $780 million (up 3% to 11%), subject to market conditions.
CIMIC
Group Executive Chairman Marcelino Fernández Verdes said: “CIMIC Group
finished 2017 in a strong position. We again reached the top of our
profit guidance range and further strengthened our balance sheet,
positioning us well for strategic growth opportunities, including public
private partnerships, and sustained shareholder returns.
“This
performance was reflected in a 47.3% increase in CIMIC Group’s share
price during the year. Combining the share price appreciation and
dividends paid in 2017, we achieved a total shareholder return of 51%.
“Innovation
continued to be a priority area, with the development of technologies
that improve productivity and results for our clients. Reflecting this,
we were the first Australasian company to achieve Kitemark certification7 for excellence in building information modelling (BIM).”
The
Board has declared a 100% franked final dividend of 75 cents per share
to be paid on 4 July 2018. Total dividends declared for 2017 were 135
cents per share, a 22.7% increase compared with 2016.
CIMIC
Group Chief Executive Officer Michael Wright said: “In 2017 we leveraged
our competitive position and favourable market conditions to produce an
outstanding operating performance and further diversify our order book
across construction, mining, services and public private partnerships.
“We
increased our focus on the development of our people during the year,
and will further this in 2018 to ensure our performance based culture
provides long-term, rewarding careers for our people.
“All of our
core businesses contributed to the diversification and growth of work in
hand, with new work of $18.4 billion in 2017.”
The Group:
- Expanded its leading position in construction, winning several large scale infrastructure projects, including works on the second stage of Sydney Metro, Australia’s biggest public transport project; construction of Victoria’s multi-billion dollar West Gate Tunnel; and major airport upgrades in Hong Kong and Queensland.
- Achieved growth in mining and mineral processing, securing new contracts and extensions in Australia and Indonesia, including an extension at the Solomon Hub mine in Western Australia and a contract at Gunung Bara Utama mine in East Kalimantan.
- Advanced its position as a leading services provider, including achieving a long-term extension to the contract to operate and maintain the Melbourne suburban train network, as well as securing several solar projects across Australia and a utilities upgrade contract in Singapore.
- Contributed its financial strength and
diverse capabilities to the third New Zealand Schools public private
partnership initiative, building on its existing portfolio.
Looking
forward, there is at least $110 billion of tenders relevant to CIMIC
Group to be bid and/or awarded in 2018, and around $285 billion of
projects coming to the market in 2019 and beyond, including about $65
billion worth of public private partnership projects.
Mr Fernández
Verdes said: “Our focus is to continue to develop our safety and
performance culture, further develop our presence in the public private
partnership market and deliver additional client value through
collaboration opportunities amongst our companies.”
- Cash flows from operating activities before interest, finance costs, taxes and dividends received.
- Revenue excludes revenue from joint ventures and associates.
- Work in hand includes CIMIC’s share of work in hand from joint ventures and associates.
- New work includes new contracts, contract extensions and variations including the impact of foreign exchange rate movements.
- Margins are calculated on revenue which excludes revenue from joint ventures and associates.
- Free operating cash flow is defined as net cash from operating activities less net capital expenditure for property, plant and equipment.
- For excellence in building information modelling in design and construction, from the BritishStandards Institution, the international benchmark for excellence in digital engineering and project delivery.