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Cimic share price points higher on $1.7 billion diamond contract win

The Cimic Group Ltd (ASX: CIM) share price is likely to lift in Monday trade after the construction and mining services group announced it has won a $1.7 billion contract to provide comprehensive mining services at the Debswana Diamond Company’s Jwaneng Mine Cut 9 project in Botswana.

The contract has been awarded under the terms of the Majwe joint venture between Cimic’s subsidiary Thiess (70%) and local partner Bothakga Burrow Botswana (30%).

The Cimic share price is up around 133% over the past 5 years as the group formerly known as Leighton Holdings progresses an acquisitive and organic growth strategy that included the $524 million purchase of UGL Limited in 2016.

Cimic is still majority owned by Germany’s largest construction company Hochtief, with institutional and retail shareholders only making up a small part of the share register.

In calendar year 2018 it made a net profit after tax of $781 million, with a $1.6 billion net cash position. It’s guiding for net profit between $790 million to $840 million in 2o19, with today’s contract news likely to support future results.

Other listed mining services businesses include Worleyparsons Ltd (ASX: WOR) and Monadelphous Group Limited (ASX: MND).

Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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