The Cimic Group Ltd (ASX: CIM) share price is down slightly, despite a positive announcement today about its subsidiary Ventia winning a Telstra contact.
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The Cimic Group Ltd (ASX: CIM) share price is down today, despite a positive announcement today that its subsidiary Ventia has won a Telstra contact. This most recent news comes hot on the heels of Ventia announcing a contract award with Anglo American, pre-market today.
At the time of writing, the Cimic share price is down 1.2% to $25.49.
A closer look at Cimic
The Cimic Group provides a range of services to the infrastructure, resources and property markets. These include construction, mining, mineral processing, engineering, concessions, and operation and maintenance services.
The company operates in more than 20 countries throughout Asia Pacific, the Middle East, North and South America, and Sub-Saharan Africa.
Telstra contract win
According to its release, Ventia, which is 50% owned by Cimic Group, was awarded a field optimisation contract with Telstra Corporation Ltd (ASX: TLS).
Under the agreement, Ventia will carry out a number of works, which will include:
- network services, including mobile and wideband
- national optic fibre and data and IP services
- maintenance and building services to more than 40,000 exchange and network assets
- network integrity and facilities management of exchanges and other network sites.
Based on forecasted work volumes, the 3-year contract value is estimated to generate $570 million in revenue for Ventia.
Ventia, formerly known as Visionstream, has developed a mutually beneficial relationship with Telstra over a 25-year period. This latest contract award is another testament to the strength of the partnership between the two companies.
What did management say?
Mr Tim Harwood, Ventia’s group executive of telecommunications, commented on the strategic win, saying:
The Telstra Field Optimisation contract provides us with an opportunity to strategically partner with Telstra as it simplifies its business.
This will be achieved by delivering the highest-quality field operations for Telstra at a lower cost that is based on economies of scale, effective optimisation programs and improved ways of working supported by digital enhancements.
Cimic share price summary
The Cimic share price has climbed strongly since the start of October, gaining over 38% for shareholders, although the company’s shares are still down from their pre-COVID highs.
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Motley Fool contributor Aaron Teboneras owns shares of Telstra Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.