Cimic (ASX:CIM) share price dips despite contract award

Shares in the engineering company are edging lower today as a positive announcement fails to capture the imagination of investors.

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Construction workers on site

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The Cimic Group Ltd (ASX: CIM) share price is in the red today despite the engineering company announcing another contract award for one of its subsidiaries.

At the time of writing, Cimic shares are down 0.56% to $21.34.

The Cimic share price rose yesterday after the company announced another of its subsidiaries, UGL, had secured a contract to connect the first pumped hydro storage project in Queensland.

CPB Contractors get green light

The company’s release today has not had quite the same impact on investors as yesterday’s, with the Cimic share price trending lower.

In its announcement, Cimic said its subsidiary CPB Contractors had been confirmed as the builder of a new Sydney residential tower.

The 39-storey tower, to be built over Sydney Metro’s Pitt Street Station in the central business district, will house 234 build-to-rent apartments. It will be retained by Oxford and Investa, which will offer the apartments to the rental market. The building will also include facilities such as a wellness floor and rooftop terrace, and will be connected to retail stores.

The contract for the design and construction of the tower is expected to generate about $150 million in revenue for CPB Contractors. The project was awarded by Pitt Street Developer South Pty Ltd.

In 2019, CPB Contractors was awarded the $463 million contract to build the new Pitt Street Station. That project is already underway.

Cimic group executive chair and CEO Juan Santamaria commented:

As well as building Sydney Metro’s Pitt Street Station, CPB Contractors is delivering the design and construction of this high-rise tower above the station, working collaboratively with our clients at every stage. This project brings together the global and in-market development experience of Oxford and Investa with CPB’s 50 years of building experience to provide a residential project that is seamlessly integrated with the metro.

CPB Contractors managing director Jason Spears added:

CPB Contractors is proud to be working closely with Oxford and Investa to deliver this major project in Sydney’s CBD. This is a high-profile addition to the building projects that CPB Contractors is already delivering across Australia in the defence, health and social infrastructure sectors.

Cimic share price summary

Since hitting a 52-week low of $16.86 in April, the Cimic share price has rebounded by more than 25%. However, Cimic shares are still trading at similar levels to those seen in mid-February, when their value nosedived 16% on the group’s full-year results.

Cimic has a market capitalisation of around $6.64 billion, with approximately 311 million shares outstanding. The company ranks 78th on the ASX in terms of market value.

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