The Cimic Group Ltd (ASX: CIM) share price was trading 20.38% lower today after the company released a business update to the market. Here’s what you need to know.
About Cimic Group Ltd
Formerly Leighton Holdings Limited, CIMIC Group is the parent company of Australia’s largest project development and contracting group.
The company is an international contractor with operations in telecommunications, engineering, property, mining and environmental services industries.
CIMIC operates multiple brands such as UGL, CBP Contractors, Thiess and Sedgman.
This morning, CIMIC announced its intention to divest its 45% interest in BIC Contracting (BICC), a company operating in the Middle East region.
As a result, the company will recognise a one-off, post-tax impact of around $1.8 billion in its 2019 financial statements, representing all of CIMIC’s exposure in relation to BICC. This impact includes expected cash outlay net of tax of around $700 million during 2020.
CIMIC will exit the Middle East region and now focus its resources and capital allocation on growth opportunities in its main core markets and geographies — Australia, New Zealand and Asia Pacific.
Due to the financial impact of CIMIC’s exposure to BICC, the company has decided it will not declare a final dividend for 2019.
Excluding the BICC impact, CIMIC expects to report NPAT for 2019 of around $800 million, in-line with its previous 2019 guidance.
The company expects to announce its 2019 financial results on 4 February 2020.
The CIMIC share price was last trading at $28.04, down 19.84%.
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