The Cimic Group Ltd (ASX: CIM) share price is in the red today despite a new contract with Rail Projects Victoria.
At the time of writing, the engineering company's shares are down 1.42%, trading at $18.79.
Let's take a closer look at the deal announced by Cimic during midday trade.
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What did Cimic announce?
The Cimic share price is failing to fire today as investors appear to be unmoved by the company's latest contract win.
According to its release, Cimic advised that its subsidiary, UGL, has been awarded a contract by Rail Projects Victoria to upgrade the Gippsland line.
UGL is considered Australia's leading rail and infrastructure service provider with operations across the country.
Under the agreement, the company will provide several works to improve rail services for Victoria's Gippsland line. These include adding second platforms, making station improvements, enhancing tracks, and upgrading level crossings and signalling.
The upgrade falls under the Victorian Government's $4 billion Regional Railway Revival program. The aim is to improve every regional passenger rail line within Victoria while creating jobs in a COVID-19 environment. This includes the Ballarat line, Shepparton corridor, Warrnambool line, Geelong line, Bendigo and Echuca line, and the North-East line.
The project is expected to generate around $124 million for UGL, with works starting in the coming weeks. The Gippsland line upgrade is projected for completion some time at the end of next year.
Management commentary
Cimic group executive chair and CEO Juan Santamaria welcomed the deal, saying:
UGL has a long history of providing rail services in Victoria. We are pleased to be working closely with Rail Projects Victoria to deliver the upgrade safely and efficiently, benefitting the growing communities of Gippsland.
UGL managing director Doug Moss went on to add that the company was looking forward to improving railway services.
About the Cimic share price
While the Cimic share price has lost 7% of its value over the last 12 months, it is down 23% year-to-date. Investors have not been kind to the industrials sector recently, which has fallen more than 32% from March 2020.
Cimic commands a market capitalisation of just above $5.8 billion with roughly 311 million shares outstanding.
