CIMIC sees more mining growth ahead
CIMIC Group (ASX: CIM) CEO Michael Wright has told the company's annual general meeting today growing Australian mining exports supported its robust outlook for the resources sector.
Staff reporter
13 APRIL 201813/04/2018commentsshareAs well as infrastructure spending in Australia and Asia, CIMIC is being buoyed by a strong outlook for resources.
"Australian export volumes in major commodities are expected to continue to grow and there are mining and processing opportunities in several states," Wright said.
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Earlier this week, the Department of Industry, Innovation and Science said Australia's resource and energy export earnings were forecast to reach a record A$230 billion in 2017-18, driven by rising LNG and iron ore exports, a strong coal price, and the "mini-rally" in base metals.
Wright said the prospects of winning offshore work were also strong.
"We are experiencing substantial growth in Indonesia and are tendering for mining projects in Canada and Chile, as well as the Jwaneng expansion project in Botswana, where we are the incumbent services provider," he said.
"These tenders involve minerals such as oil sands, copper, gold and diamonds.
"There is also an increasing trend towards the outsourcing of operations and maintenance services, by both public and private clients. This is a core competency for UGL and we are tendering several of these opportunities.
"Based on our past success, and the extensive pipeline ahead of us, we expect to continue to generate sustained returns for our shareholders."
CIMIC subsidiary Thiess won $845 million worth of coal contracts in Australia and Indonesia in just one week last month.
CIMIC posted a net profit after tax of A$702 million for 2017 on a 24% jump in revenue to $13.4 billion.
"For 2018 we have provided guidance that we will achieve net profit after tax in the range of $720 million to $780 million, subject to market conditions," Wright said.
Across the group, the company has identified more than $110 billion of tenders for this year, with a further $285 billion of projects coming to the market next year.
Shares in CIMIC were up by 0.7% to $43.52, valuing the company at around $14 billion.