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Cimic (ASX:CIM) share price struggles despite $1.8b contract win

It’s been a mixed week for the ASX industrials company so far.
The post Cimic (ASX:CIM) share price struggles despite $1.8b contract win appeared first on The Motley Fool Australia. –

The Cimic Group Ltd (ASX: CIM) share price fell slightly today despite a major government contract victory.

At market close, the Cimic share price was $16.46, down 0.3%.

Let’s take a look at what might have impacted investor sentiment for Cimic today.

Major project win

The mining, construction and engineering services company informed investors of a major $1.8 billion New South Wales government contract win for its subsidiary CPB Contractors.

The company has been selected for boxes and tunnelling works on the Sydney Metro railway line. It’s expected to deliver roughly $1.35 billion in revenue.

The train line will run between the suburb of St Mary’s and the new Western Sydney Airport station, due for completion in 2026. CPB Contractors is already working on the project.

The construction involves the design and construction of 9.8km of twin tunnels and works on several train stations.

Speaking on the contract win today, Cimic executive chairman and CEO Juan Santamaria said:

This is a strategic transport investment that will generate long lasting benefits for the people of Western Sydney and provide a significant boost to jobs during construction.

Today’s news comes amid some negative publicity for the company in recent days. Shares in Cimic tumbled more than 13% on Monday amid claims the company underpaid workers after it sold its Middle Eastern company BIC Contracting.

The plunge sparked a trading halt and a price query from the ASX, prompting the company to issue a statement assuring the market it was working to ensure the employees received their entitlements.

That took the shine off the company’s shares finishing in the green on Friday last week. That coincided with news of a commercial settlement on the West Gate Tunnel project in Melbourne.

Cimic share price snapshot

The Cimic share price has plunged the past 12 months, falling almost 34%. Year to date, the company’s shares are down 32%.

In contrast, the S&P/ASX 200 Index (ASX: XJO) has returned more than 11% to investors in the past year.

The company commands a market capitalisation of roughly $5.1 billion based on the current share price.

The post Cimic (ASX:CIM) share price struggles despite $1.8b contract win appeared first on The Motley Fool Australia.

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More reading

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Here’s why the Cimic (ASX:CIM) share price popped today

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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