The Cimic Group Ltd (ASX: CIM) share price has lost ground after positive morning trading, dipping 0.96% at the time of writing. This comes after the company announced that its subsidiary, UGL, has won a country regional network contract.
The Cimic share price is currently trading lower at $20.65.
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Major contract award
In today's release, Cimic advised that the Transport for New South Wales (TfNSW) selected UGL for its Country Regional Network contract.
UGL will provide an array of operation and maintenance works to tfNSW's rail infrastructure under the agreement.
This includes building network operations such as establishing a new network control centre in regional NSW. In addition, UGL will deliver rail maintenance services, asset and property management, and implement its new signalling system, Sigview.
The 10-year agreement is expected to generate more than $1.5 billion to UGL, depending on works completed.
Cimic noted that it would begin mobilising its workforce and equipment early this year. Commencement of operations is anticipated to occur in January 2022.
With the latest signing under wraps, investors have been mixed on the Cimic share price.
Words from management
Cimic group executive chair and CEO Juan Santamaria, welcomed the new deal, saying:
The Country Regional Network provides a reliable and sustainable rail network to safely transport passengers and goods across regional NSW. CIMIC and UGL are proud to support TfNSW to keep this essential service running across more than 2,300 kilometres of rail and we're pleased to do so with a strong commitment to indigenous and regional employment.
UGL managing director Doug Moss added:
This contract win solidifies UGL as the leading rail services company in Australia, by building on our extensive work across the NSW rail network and complementing the rail projects we manage in all other states and territories. We look forward to working with TfNSW on the safe and successful transition of the Country Regional Network contract over the coming months.
Cimic share price review
The Cimic share price has been on a wild rollercoaster ride in the past 12 months, down 25%. The company's shares took a sharp downturn in March last year due to COVID-19 impacts, and again more recently this week. This latest downturn followed a disappointing FY20 earnings result.
Based on the current share price, Cimic commands a market capitalisation of close to $6.43 billion.
