CIMIC Group (ASX:CIM) in $1.8b write-down on Middle East venture

Company News

by Rachael Jones

CIMIC Group (ASX:CIM) today announced that it has decided to exit the Middle East and focus its resources and capital allocation on growth opportunities in its main core markets, Australia, New Zealand and Asia Pacific.

They will sale its stake in BIC Contracting (BICC) and expects to take a one-off charge of $1.8 billion.

This impact includes an expected cash outlay net of tax of around $700 million during 2020, as CIMIC’s financial guarantees of certain BICC liabilities materialise.

CIMIC has committed facilities and cash available to meet all obligations as required. Consequently, CIMIC will not declare a final dividend for 2019.

2019 guidance Excluding the BICC impact, CIMIC expects to report NPAT for 2019 of around $800 million, in line with its 2019 guidance.

Shares in CIMIC Group (ASX:CIM) are trading 19.2 per cent lower at $28.26.