Cimic (ASX:CIM) share price edges lower following 25% drop in statutory NPAT

The CIMIC Group Ltd (ASX: CIM) share price is in negative territory during late morning trade. This comes after the engineering company dropped its full-year results for the 2021 financial year.

At the time of writing, Cimic shares are travelling 1.93% lower to $16.78 apiece.

Let’s take a look at how the company performed for the period.

Cimic share price backtracks following mixed results

The Cimic share price is travelling lower following the release of the company’s results. Here are some of the key operational highlights:

• Group total revenue of $14.7 billion, up 8.3% on the prior corresponding period (FY20 $13.57 billion)
• Earnings before interest, tax, depreciation and amortisation (EBITDA) of $913.9 million, up 11.5% (FY20: $820 million)
• Operating profit of $630.2 million, up 8.7% (FY20: $579.5 million)
• Statutory net profit after tax (NPAT) of $402.1 million, down 35.2% (FY20: $620.1 million)
• Final unfranked dividend of 36 cents per share declared, down 40% from 60 cents in FY20

What happened in FY21 for Cimic?

The company reported $20.4 billion of major contracts that were won during the period, however this wasn’t enough to keep its share price afloat.

Cimic revealed that its statutory NPAT fell by 35.2% on the back of discontinuing its use of factoring arrangements. The completion of the strategic initiative led to a reduced balance from roughly $2 billion at December 2019 to $434 million at December 2021.

In addition, the company progressed the withdrawal from the Middle East, with the transfer to the acquirer of the Qatar business completed.

Management is hoping to resolve legacy items, including completing the exit from the Middle East and progressing CCPP and NRAH arbitration hearings.

What did management say?

Cimic group executive chair and CEO, Juan Santamaria touched on the result, saying:

Cimic achieved solid 2021 financial results, with NPAT within our guidance range, total dividends of 78c per share, increased work in hand, and significantly improved EBITDA cash conversion.

We diversified our funding sources, completed our strategic unwind of factoring, and repaid and discontinued the supply chain finance program.

Other significant achievements included the IPO of Ventia, commercial settlement on the West Gate Tunnel project, and financial close for North East Link.

FY22 outlook for Cimic

Looking ahead, Cimic is forecasting FY22 NPAT to be in the range of $425 million to $460 million. This represents a potential increase of 4.8% to 13.5% on FY21 underlying NPAT of $405.4 million.

The FY22 guidance is being supported by the group’s numerous projects along with a positive outlook across core markets.

Cimic has an extensive pipeline with over $480 billion of tenders to be bid and/or awarded in 2022 and beyond.

The post Cimic (ASX:CIM) share price edges lower following 25% drop in statutory NPAT appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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