Cimic (ASX:CIM) share price climbs higher on significant contract news

The global engineering company’s shares are bouncing higher this week…

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The Cimic Group Ltd (ASX: CIM) share price ended the day higher following a media release by its 50% owned investment partnership, Ventia.

At the closing bell, the engineering group’s shares finished 1.02% higher to $19.79.

What did Ventia announce?

Cimic shares advanced throughout the day after investors appeared pleased with the company’s latest news.

In today’s update, Cimic advised that Ventia’s telecommunications business, Visionstream Australia, has been awarded a significant new contract with NBN Co.

The deal is estimated to generate roughly $400 million in revenue to Ventia over a 2.5-year term. This is subject to work order and volumes, however.

The N2P Evolution contract will support NBN Co’s plans to extend its fibre technology into communities around Australia. It hopes that up to 75% of homes and businesses will be on the fixed line network by 2023.

NBN Co is continuing its rollout of fibre, in which eligible premises currently connected via Fibre-to-the-Node technology will progressively gain access to Fibre-to-the-Premises (FTTP) technology.

Works under the new contract are scheduled to commence immediately.

Ventia Group CEO, Dean Banks commented:

We are proud to be extending our long-term relationship with NBN Co. We will be using our knowledge of the nbn network – combined with our extensive experience managing other large-scale telecommunication network build and maintenance programs – to continue supporting the delivery of improved digital connectivity for our communities.

Ventia group executive of telecommunications, Tim Harwood went on to add:

We will deliver these works across Queensland, New South Wales and Victoria utilising our client-focused, innovative and sustainable approach.

We were instrumental in the delivery of the initial nbn build program and the subsequent maintenance of the nbn network over the past decade, and we are looking forward to delivering this new program of work.

About the Cimic share price

Since hitting a 52-week low of $16.86 in April, the Cimic share price has rebounded by more than 15%. 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 $6.1 billion, with approximately 311 million shares outstanding. The company ranks 85th on the ASX in terms of market value.

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