The Cimic Group Ltd (ASX: CIM) share price has been stuck in the red today, despite the company announcing another contract award.
The global engineering company’s shares are fetching $21.10 at the time of writing, down 1.8%.
Below, we take a closer look at what’s driving the Cimic share price today.
M6 Motorway project
In its announcement, Cimic advised that its subsidiaries CPB Contractors and UGL have been selected to build the M6 Motorway in Sydney. The design and construct contract will see both companies, along with joint venture partner Ghella, deliver the first stage of the multi-billion-dollar motorway.
The New South Wales government awarded the deal, which is expected to generate roughly $1.95 billion in revenue for Cimic. The total value of the M6 stage 1 project is around $2.5 billion.
Once completed, the M6 will connect the roads in Sydney’s south to the city’s wider motorway network. It’s envisaged this will improve journey times for motorists, as well as reduce congestion, and remove trucks from local streets.
The joint venture will include building an underground motorway connection, mainline tunnels, exit/entry ramps, shared cycle and pedestrian pathways and tunnel stubs.
The project will start in 2022 and is scheduled for completion in 2025.
What did management say?
Cimic group executive chair and CEO Juan Santamaria touted the company’s achievements, saying:
Cimic Group companies are delivering major transport projects across Australia. Having successfully completed several WestConnex projects, our companies have specific expertise in delivering motorways in urban areas.
This experience will be applied to safely and successfully deliver the M6 Stage 1 for the NSW Government.
CPB Contractors managing director Jason Spears added:
This is an important addition to the portfolio of road, rail and airport projects that CPB Contractors’ experienced teams are delivering across NSW. We are very pleased to have been selected to work closely with Transport for NSW to safely deliver this key piece of transport infrastructure for the people of Sydney.
UGL managing director Doug Moss said UGL also looked forward to bringing its expertise to the M6 project, adding that the company was helping to “improve transport infrastructure right across Australia”.
Cimic share price review
The Cimic share price had been relatively stable prior to its results for the full-year results released in February when its shares plummeted more than 20% as investors ran for the hills. Since the beginning of May, the company’s shares have started to rebound.
Based on today’s price, Cimic commands a market capitalisation of $6.5 billion, with approximately 311 million shares on issue.