Buoyant Cimic lifts profit

AUSTRALIA’S largest construction company has reported a lift in first quarter revenue and net profit just days after settling a $492m legal dispute, and on the eve of its expected takeover.

Cimic announced Thursday it had generated a $108m net profit on the back of growth in its building and services businesses in the three months to March 31.

The result was up from a $100m profit in the same period last year. Revenues climbed 7 per cent to $2.3bn. The company also restated its guidance for the full-year, tipping a net profit of between $425m and $460m based on a “strong level of work in hand and positive outlook across the group’s core markets’’.

“We are looking at a strong pipeline of opportunities ahead driven by government investment in infrastructure,’’ chief executive Juan Santamaria said.

Earlier this week, Cimic agreed to pay $492m to resolve an LNG deal that had gone bad due to work on a power plant which suffered from cost blowouts, delays and construction problems. Meanwhile, a $1.5bn takeover bid from Cimic’s major shareholder, German construction group Hochtief AG, is set to close on April 26.

Hochtief, which is owned by Spanish firm ACS, already controls nearly 95 per cent of the stock. Cimic shares closed on Thursday at Hochtief’s $22 offer price.