Construction and contract mining group CIMIC is set for a solid 2016 after lifting its underlying annual profit by 20 per cent.
CIMIC, formerly known as Leighton Holdings, won new work worth $14.1 billion in 2015, and enters 2016 with work in hand worth $29 billion.
“We have made significant improvements to CIMIC’s competitive position and entered 2016 with a stronger base, ready to keep pursuing our pipeline of work and continuing to win and deliver profitable projects,” CIMIC chief executive Marcelino Fernandez Verdes said on Wednesday.
He said there was $60 billion worth of new project opportunities relevant to CIMIC in infrastructure and mining expected to be awarded in 2016.
Sixty per cent of the opportunities were in Australia and New Zealand.
There was more than $170 billion worth of potential projects in 2017 and 2018.
The pipeline of urban infrastructure projects in Australia remained high.
CIMIC would also look to expand into other countries, for example by exporting its contract mining skills into North and South America.
CIMIC said it may also consider investing in local companies to support its expansion.
CIMIC on Wednesday reported a 23 per cent fall in statutory annual profit for 2015 to $520.4 million.
But excluding profit from discontinued operations – the sale of the John Holland business was completed in April 2015 – and a provision for contract debtors, net profit was up 20 per cent.
CIMIC expects a net profit for fiscal 2016 in the range of $520 million to $580 million, subject to market conditions.
Mr Fernandez Verdes said CIMIC performed strongly during 2015, either meeting or exceeding key financial targets.
“2015 NPAT (net profit after tax) is at the top end of our profit guidance range, and we have improved margins by reducing overheads and effectively managing financial and other costs,” he said.
Construction revenue fell to $9.5 billion from $12.4 billion as CIMIC focused on more profitable work and stricter bidding discipline.
Contract mining revenue fell to $3.06 billion, from $3.97 billion, reflecting the weaker environment in the resources sector.
But both construction and contract mining delivered strong increases in pre-tax profit.
CIMIC SAYS STRONG BASE FOR 2016
- Statutory net profit down 23pct to $520.4m, but underlying profit up 20pct
- Group revenue down 12pct to $16.2b
- Final dividend of 50 cents, fully franked, down from 53 cents