Cimic (ASX:CIM) share price edges higher on contract extension news

Could the company’s shares be staging a comeback?

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The Cimic Group Ltd (ASX: CIM) share price is pushing into positive territory this morning. This comes after the global engineering company announced a renewed contract to the ASX.

At the time of writing, Cimic shares are up 1.57% to $20.11. A strong rebound of more than 6% since closing at $18.98 apiece on 21 September.

Details of the latest award

In today’s statement, Cimic advised that major oil and gas company BP has awarded its UGL subsidiary a contract extension.

UGL is a diversified engineering company in end-to-end asset solutions. The business delivers critical assets and essential services in power, water, resources, transport, defence and security, and social infrastructure.

As a result of the multiyear deal, UGL will provide asset management and project-related services at BP fuel terminals across Australia. This includes engineering and maintenance services.

Furthermore, the contract extension is effective from this month and will generate expected revenues of around $150 million for UGL. Shareholders would hope this has a positive influence on the Cimic share price.

Australian Terminal Operations Management (ATOM), a joint venture between UGL and BP, awarded the contract.

Cimic group executive chair and CEO Juan Santamaria said:

UGL and CIMIC have a longstanding relationship with BP, and we’re pleased to continue that with the delivery of safe, reliable and effective terminal operations, maintenance and engineering services.

In addition, UGL managing director Doug Moss said:

UGL is pleased to extend our partnership with BP through this ATOM contract extension. UGL is proud of its reputation for providing safe and innovative project and maintenance services across Australia and we look forward to continuing that to enhance our client’s capabilities through this contract.

Cimic share price snapshot

Over the past 12 months, Cimic shares have travelled in circles to register relatively little gains, up 3%. However, the year-to-date figure paints a different picture, with the company’s share price deep in the red, down close to 20%.

Based on today’s price, Cimic commands a market capitalisation of roughly $6.16 billion, and has 311.3 million shares on issue.

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