ASX 200 rises, Cimic (ASX:CIM) share price climbs

The Cimic Group Ltd (ASX:CIM) share price went up 9%, helping the S&P/ASX 200 Index (ASX:XJO) climb slightly today.

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The S&P/ASX 200 Index (ASX: XJO) went up slightly today to 6102 points.

Here are some of the highlights from the ASX 200 today:

Cimic Group Ltd (ASX: CIM)

Cimic gave a profit update for the nine months to 30 September 2020.

The ASX 200 company said that it generated net profit after tax (NPAT) of $474 million in the first nine months of its FY20.

Revenue for the nine months was $9.3 billion, down from $10.7 billion in the prior corresponding period.

Cimic said that it returned to growth in the third quarter of FY20. Revenue in the third quarter of FY20 was up 8% compared to the second quarter. COVID-19 led to a slowdown of revenue across its activities both domestically and overseas. It also caused a temporary delay in the award of some new projects.

Management were pleased to report that its margins remained resilient with operating profit, profit before tax (PBT) and NPAT margins at 8.6%, 6.9% and 5.1% respectively. The ASX 200 company’s leadership said the business mix and cost efficiency measures were helpful for the margins.

Cimic said that its factoring balance was reduced by $134 million year to date, and reduced by $142 million year on year, to $1.83 billion. Its supply chain finance balance was reduced by $705 million year to date, and reduced by $561 million year on year, to $146 million.

It finished the period with net debt of $1.67 billion, with gross cash of $3.6 billion.

During the quarter, the ASX 200 share won approximately $1.4 billion of new work. It finished with $35.5 billion of work in hand, which is equivalent to more than two years of revenue.

CIMIC executive Chair Marcelino Fernandez Verdes said: “We are seeing improved operating conditions, which is providing momentum as we enter the last quarter of the year.

“Governments have announced numerous stimulus packages in our core construction and service markets, with additional opportunities through the strong PPP pipeline, and the mining market is proving resilient.

“The transaction with a new equity investor for Thiess is well progressed, with due diligence completed and negotiations expected to be finalised in the coming days.

“The introduction of an equity partner into Thiess capitalises on the outlook for mining, provides capital for Thiess’ continued growth and enables CIMIC to strengthen its balance sheet.”

The Cimic share price climbed by 9.2% today. 

Newcrest Mining Limited (ASX: NCM)

Newcrest’s board announced the approval of two projects moving to the execution phase.

The stage 2 of the Cadia expansion project has been approved. This is estimated to increase plant capacity from 33mtpa to 35mpta, life of mine (LOM) gold recoveries are projected to increase by 3.5%, LOM copper recoveries are estimated to increase by 2.7% and the all-in sustaining cost (AISC) is estimated to reduce by an estimated $22 per ounce.

The estimated capital cost for stage 2 is $175 million, which is $5 million lower than the estimate from October 2019. The timing for the project remains in schedule, with completion expected in late FY22.

The ASX 200 company’s board also approved the Lihir front end recovery project. This primarily comprises the installation of flash flotation and additional cyclone capacity, as well as cyclone efficiency upgrades, to improve grinding classification and reduce gold losses through the flotation circuits. This should result in LOM gold recoveries increasing by 1.2% and incremental LOM gold production increasing by 244,000 ounces.

Newcrest managing director and CEO Sandeep Biswas said: “It is an exciting time at Newcrest as we advance our growth pipeline with both of these projects adding value to our existing large scale, long life operations while we pursue the development of Red Chris and Havieron and exploration opportunities globally.”

The Newcrest share price went up 3.2% today in response.

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