Downer EDI Limited (ASX: DOW) shares are inching higher today after the company released details of a new contract win. At the time of writing, the Downer share price is trading 0.98% higher at $5.17.
Let's take a look at what the engineering and construction giant reported.
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New contract for the Eyre Peninsula
The Downer share price is on the rise today after the company announced it has been awarded a $245 million contract by ElectraNet Pty Ltd to upgrade the existing electricity network that serves the Eyre Peninsula in South Australia. The network upgrade will also include substations as part of the contract.
According to the announcement, Downer is slated to begin work at the end of March. The upgrade project will then continue for an estimated 20 months. As such, completion is scheduled to occur towards the end of 2022.
The contract stipulates that Downer's contribution will involve the construction of 262 kilometres of transmission line, spanning Cultana to Port Lincoln. Additionally, the substations of Yadnarie, Cultana, Middleback, Wudinna, and Port Lincoln must be upgraded.
CEO commentary
Downer chief executive officer Grant Fenn commented on the win, stating:
Downer is pleased to be involved in such a critical infrastructure project which will improve power security and reliability to Eyre Peninsula households and more broadly across South Australia.
The win comes only a few weeks after the company provided its first-half results, which also prompted a rise in the Downer share price. This came despite Downer's revenue during the period experiencing a 10.6% decline, coming to a total of $6.1 billion. Earnings also took a 10% hit, slumping to $180.4 million.
Downer share price snapshot
Over the past year, the Downer share price has fallen by nearly 7%. Looking at the company's one-year share price chart, the devastating impacts of COVID-19 can be clearly seen. The Downer share price peaked above $8.60 just prior to the pandemic. That means Downer shares will need to climb another 66% in order to reach their pre-COVID highs again.
