Cimic (ASX:CIM) share price falls despite positive update

The Cimic (ASX: CIM) share price is in the red today despite announcing a new contract award. Here are the details of the new deal.

asx share price fall represented by lady in striped tshirt making sad face against orange background

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

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.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.
Opinions

2 of my top ASX 200 shares to consider buying before April

I would happily exchange dollars for these two shares right now.

Read more »

Father in the ocean with his daughters, symbolising passive income.
Dividend Investing

I'd spend $8k on these ASX 200 shares today to target a $6,102 annual passive income

I believe these ASX 200 shares will continue rewarding passive income investors for years to come.

Read more »

Three businesspeople leap high with the CBD in the background.
Share Market News

Boom! ASX 200 blasts to new record highs

ASX 200 investors just sent the benchmark index into uncharted territory.

Read more »