Insights

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

A major project in Victoria is back on track.
The post Here’s why the Cimic (ASX:CIM) share price popped today appeared first on The Motley Fool Australia. –

The Cimic Group Ltd (ASX: CIM) share price finished in the green today after the company announced it had settled a dispute.

At the close of trade, Cimic shares were swapping hands for $18.33, up 2.23%.

Cimic is a major construction, mining and services company with subsidiaries including CPB Contractors.

What was the update?

In today’s release, Cimic advised it has reached a commercial settlement on the West Gate Tunnel project in Melbourne. The tunnel is being constructed by CPB Contractors in a joint venture with John Holland.

Under the terms of the settlement, the Victorian state government will provide $1.9 billion while Transurban will contribute $2 billion to ensure the tunnel is built by late 2025.

However, the profit margin from the project will now be forgone and Cimic will see a reduction in revenue of $300 million. John Holland will also let go of $300 million of revenue.

Despite the revised revenue outlook, investors appeared to react positively to the news.

The settlement means tunnelling on the project will now be able to start early next year. Also, it resolves what the company described as a long-standing legacy issue that has taken up a lot of management’s time.

Furthermore, Cimic noted it would be able to offset the financial hit with existing provisions and additional non-recurring gains. The company expects to report a net profit after tax (NPAT) of $400-$430 million for the 2021 financial year.

In a statement signed by the Cimic board, the company said:

Cimic is pleased to have achieved this settlement, avoiding further potential legal and other costs, while being able to maintain guidance.

Settlement of West Gate also allows tunnelling to commence to the benefit of the project parties and, ultimately, the people of Victoria who will gain from this infrastructure.

Cimic share price snap shot

Cimic shares have been in the red in the past 12 months, plummeting almost 29%. Year to date, the company’s shares are down 26%.

In contrast, the S&P/ASX 200 Index (ASX: XJO) has returned more than 8% to investors in the past year.

The company commands a market capitalisation of roughly $5.7 billion based on the current share price.

The post Here’s why the Cimic (ASX:CIM) share price popped today appeared first on The Motley Fool Australia.

Should you invest $1,000 in Cimic share price right now?

Before you consider Cimic share price, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Cimic share price wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

2 quick-growing small cap ASX shares to watch

And just like that, Oil Search (ASX:OSH) shares are no more

How might the Polynovo (ASX:PNV) share price perform in 2022?

3 ASX 200 shares with major upside potential in 2022

Here are the top 10 ASX shares 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.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!