One of the largest engineering companies which operates in Australia has recorded an increase in profit as the nation’s boom in civil infrastructure rolls on.

Releasing its latest results, engineering, mining services and construction company CIMIC Group says its earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 5.1 percent from $442.0 million in the (COVID impacted) six-months to June 2020 to $464.5 million in the half-year to June 2021.

Over the same period, net profit after tax (NPAT) edged up from $205.3 million to $208.0 million.

Largely speaking, the result was driven by higher revenue in the group’s Construction and Services divisions (see chart).

The improvement in construction was driven a recovery in the group’s Australian operations following last year’s COVID disruptions along with a ramp up in activity on major civil developments.

This includes projects such as the Rozelle Interchange which will link the M4-M5 tunnels and the City West Link as part of the WestConnex project in Sydney and Cross River Rail in Brisbane which will provide a second rail crossing under the Brisbane River and the Brisbane CBD.

Meanwhile, growth in the company’s services business has been driven by an upturn in operations and maintenance work.

Majority owned (78.58 percent) by Frankfurt listed HOCHTIEF (itself owned by Spanish construction giant ACS), CIMIC is listed on the Australian Stock Exchange.

The company operates across the areas of construction contracting; engineering construction and maintenance  services for critical infrastructure (industrial, rail, power, water etc.); mining operations and services and solutions for public private partnerships.

Its subsidiaries and brands include CPB Contractors, Broad Construction, Devine, Leighton Asia, UGL, Venita (47 percent owed), Theiss (50 percent owned), Sedgman, EIC and Pacific Partnership (see chart).

Whilst most of its operations centre on Australia and New Zealand along with Asia, it also has operations in Africa and the Americas.

In addition to its revenue result, the company also secured $10.4 billion in new work, bringing its total work on hand to $33.3 billion.

Its subsidiaries CPB Construction Contractors and Pacific Partnerships are part of the Spark Consortium which last month was named as the preferred bidder for the tunnelling package as part of Melbourne’s North-East Link which will connect the Metropolitan Ring Road in Melbourne’s north-eastern suburbs with the Eastern Freeway and will complete a ring road around Melbourne.

Meanwhile, its subsidiaries CPB Contractors and UGL together in a joint venture with Ghella have were selected by the NSW Government to deliver the first stage of Sydney’s M6 Motorway which will connect Sydney’s South to its wider motorway network.

In terms of strategic investments, meanwhile, the company earlier this month completed its acquisition of remaining shares in residential property developer Devine Group and has appointed advisers to review strategic options for its 47 percent stake in essential service provider Ventia.

Going forward, CIMIC says its overall NPAT guidance for FY21 is in the range of $400-$430 million, subject to market conditions.

It says the outlook is promising amid numerous government stimulus packages along with strong service markets and additional opportunities through a robust PPP pipeline.

As at June 30, it put the forward pipeline of work on which it could bid at $470 billion including $115 billion worth of PPP opportunities.

CIMIC Group Executive Chairman and Chief Executive Officer Juan Santamaria welcomed the result.

“Growth in revenue and profit during the first half of the year, along with a significant increase to our orderbook, provides CIMIC with a confident outlook for 2021 and beyond,” Santamaria said.

“The strong performance of our Australian Construction and Services segments supported the increase in revenue and resulted in an improvement in operating cash generation in the second quarter …

“… We’re seeing an increased volume of work coming to the market as a result of the various economic stimulus packages.

“The $10.4 billion in new work we secured in the past six months exceeds the $6.8 billion won in the 12 months to the end of 2020 and there is a substantial pipeline of work yet to be awarded.”