FY20 STATUTORY1 NPAT $620M; REVENUE2 $11.4BN
DIVIDEND 60C PER SHARE, 62% PAYOUT RATIO ON 2H20
STRONG LIQUIDITY OF $4.2BN; NET CASH OF $190M
WIH3 $30.1BN, EQUIVALENT TO ~2 YEARS REVENUE
FY21 NPAT GUIDANCE $400M TO $430M, UP 8-16% YOY ON FY20 PROFORMA UNDERLYING4 NPAT OF $372M
CIMIC Group today announced its financial result for the 12 months to 31 December 2020:
- Statutory NPAT of $620m
- Revenue of $11.4bn, with COVID-19 leading to a temporary delay in the award of new projects and slowdown of revenues across our activities, both domestic and overseas
- EBIT, PBT and NPAT margins6 of 10.3%, 8.7% and 5.4% respectively
- Successful completion of 50% sale of Thiess on 31 December 2020; retention of the remaining 50% reflects the ongoing strategic importance of Thiess to our business
- One-off post tax impacts in FY20 in relation to 50% sale of Thiess (+$1.4bn)7, Gorgon Jetty resolution ($805m) and other items8 ($613m) associated with COVID-19, project settlements and provisions, and property business and oil & gas vessel impairments
- Operating cash flow9 pre factoring of $579m, rebound in 4Q20
- Strong liquidity of $4.2bn; includes $2.1bn of net proceeds from 50% sale of Thiess
- Net cash of $190m
- Returned to dividend payout ratio of 60-65%; final dividend declared of 60c per share, 62% on 2H20 result (franked at 20% and CFI10 at 80%)
- Returned $281m of cash to shareholders through share buy-back in FY20
- Supply chain finance balance reduced by $707m YOY, from $851m to $144m
- Moody’s (Baa2/Stable) strong credit rating confirmed in January 2021. S&P (BBB/Stable/A-2) assessing impact of Thiess transaction
- Work in hand of $30.1bn adjusted for Thiess at 50%, equivalent to approx. two years’ worth of revenue; awarded new work11 of $7.4bn in FY20
- FY21 NPAT guidance in the range of $400m to $430m, subject to market conditions
CIMIC Group Executive Chairman and Chief Executive Officer Juan Santamaria said: “Throughout 2020 we worked closely with public and private clients to safely deliver projects in line with health protocols and to ensure our activities continued to underpin the economic recovery from COVID-19.
“While the pandemic had a bearing on revenues and the award of new projects during 2020, we have a strong level of work in hand of $30.1 billion, providing approximately two years’ worth of work and a positive outlook for the future.
“The Thiess transaction has delivered additional capital to pursue future growth opportunities and enables us to retain a strategic 50% interest in the mining business, whilst also strengthening our balance sheet and reducing debt.
“Our net cash position and strong liquidity together with improved cash flow in 4Q20 – as well as the Thiess transaction and our commitment to reward shareholders – have supported the declaration of a final dividend of 60 cents per share, at a payout ratio of 62% of 2H20 NPAT.”
CIMIC has work in hand of $30.1 billion, with project wins during FY20 including:
- A contract extension for Thiess to continue to provide mining services at the Lake Vermont Mine in Queensland. The five-year extension will generate revenue of $2.5 billion for Thiess and covers full-service mining operations.
- CPB Contractors’ selection by the Department of Defence to deliver the development phase of the Australia-Singapore Military Training Initiative facilities in Queensland. CPB Contractors was also named as preferred contractor to manage the project’s second phase.
- UGL’s appointment, as part of an alliance, as preferred tenderer by Rail Projects Victoria to improve rail services for the Gippsland Line. The scope of works includes second platforms and station amenity works at three stations.
More than $500 billion of tenders relevant to CIMIC are expected to be bid and/or awarded in 2021 and beyond, including around $130 billion worth of PPP opportunities.
Mr Santamaria said: “In 2021, our objectives are to deliver sustainable growth and returns, closely manage capital expenditure and working capital, and to generate cash-backed profits through our core operations of construction, mining and mineral processing, services and PPPs.
“The significant role of infrastructure in the economic recovery from the pandemic supports a positive outlook for our activities. Governments are pursuing stimulus packages in construction and services, including PPP projects, while the mining market is proving resilient.”
Refer to the ASX announcements for more information:
- Corporate Governance Statement and Appendix 4G
- Analyst and Investor Presentation
- Results for announcement to the market (Appendix 4E)
- Notification of dividend/distribution
- Annual report to shareholders
- Media release.
1 Statutory includes both continuing operations and discontinued operations
2 Revenue excludes revenue from joint ventures and associates of $2,803.6m (FY19: $2,506.0m)
3 WIH includes CIMIC’s share of work in hand from joint ventures and associates
4 Proforma underlying financial performance represents CIMIC Group’s underlying result (i.e. statutory excluding one-off items) adjusted for Thiess as a 50% JV
5 Excludes the FY20 one-off items (post-tax) in respect of the 50% sale of Thiess (+$1.4bn), Gorgon Jetty resolution ($805m) and other FY20 one-offs ($613m) associated with COVID-19, project settlements and provisions, and property business and oil & gas vessel impairments. Refer to the ‘Performance reconciliation’ in the Appendices of the Analyst and Investor Presentation for further information
6 Margins are calculated on revenue which excludes revenue from joint ventures and associates
7 The total NPAT impact of the 50% sale of Thiess includes the statutory gain of $1,488.2m offset by $(50)m in relation to tax losses previously recognised within continuing operations, which following the completion of the sale are no longer expected to be utilised
8 Refer to the ‘Performance reconciliation’ in the Appendices of the Analyst and Investor Presentation for further information on the FY20 one-offs
9 Operating cash flow includes cash flow from operating activities and changes in short term financial assets and investments before interest, finance costs and taxes. Operating cash flow includes the cash generated by Thiess during FY20 which was sold on 31 December 2020 (refer to the Financial report, ‘Note 32: Acquisitions, disposals and discontinued operations’)
10 Conduit foreign income
11 New work includes new contracts and contract extensions and variations, including the impact of foreign exchange rate movements and other WIH adjustments