The Cimic Group share price has slipped in early trade after the construction, infrastructure and mining company announced a new contract.
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The Cimic Group Ltd (ASX: CIM) share price has slipped today following a new contract announcement for its joint venture Ventia. At the time of writing, the Ventia share price is trading down 1.47% at $25.45.
Ventia is an independent partnership between funds managed by affiliates of Apollo Global Management (NYSE: APO) and Cimic. The company provides a broad range of infrastructure services across Australia and New Zealand.
What’s moving the Cimic share price?
In this morning’s announcement to the ASX, Cimic Group revealed that Anglo American’s Metallurgical Coal business operations in the Bowen Basin, Central Queensland will employ Ventia for its facility and asset management services.
Cimic expects the 4-year contract to generate total revenues of approximately $216 million, and that Ventia will employ more than 250 people as part of the deal. Anglo American has the option to extend the contract for an additional year.
Commenting on the new contract, Ventia Group defence and social infrastructure executive Derek Osborn said:
We are proud to have been awarded this facility and asset management services contract with Anglo American. We aim to help support the safety, health and wellbeing of everyone on site through our services.
This will be enabled by our ability to harness technology and provide a tailor-made solution to support Anglo American’s facilities and assets. We will provide a strong focus on asset lifecycle management and our technology platform will help us achieve this.
The company reports the services it will provide include town and site maintenance, property management, grounds and gardens, pest control, aerodrome management, security and safety, industrial cleaning, village catering and accommodation, housekeeping, janitorial and town services.
Cimic Group share price and company snapshot
Cimic Group (formerly Leighton Holdings) is a construction, mining, and services company that operates across the lifecycle of assets, infrastructure and resources projects. Cimic has a number of different brands under its banner, including CPB Contractors, UGL, Thiess, Sedgman, and its jointly owned Ventia.
The Cimic Group share price was hit particularly hard during the wider COVID-19 market selloff earlier this year. Shares plunged 63% from 22 January through to 19 March. Since that low, the share price has rebounded 99%.
That leaves Cimic’s shares down 22% since the closing bell on 31 December last year. By comparison, the broader S&P/ASX 200 Index (ASX: XJO) is flat year-to-date.
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Motley Fool contributor Bernd Struben 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.