Cimic Maintains Fiscal Year Guidance Despite Financial Hit From Troubled Tunnel

   By Stuart Condie 
 

SYDNEY--Cimic Ltd. maintained its full-year guidance despite forgoing profit margin on a troubled multi billion-dollar tunnel project in Australia's Victoria state.

The engineering and construction group on Friday said it had reached a settlement following a dispute over a cost blowout at the West Gate Tunnel project. Cimic said the total contract value of the project to its 50-50 joint-venture with China Communications Construction Co.-owned John Holland had increased to 8.57 billion Australian dollars (US$6.15 billion) from an original contract value of A$4.99 billion.

Cimic said its JV has agreed to reduce its revenue from the project by A$600 million and to forgo profit margin. It expects the financial impact of the settlement and other project risks to be offset by existing provisions and other non-recurring gains.

Cimic maintained its net profit guidance of A$400 million-A$430 million for 12 months through December.

Write to Stuart Condie at [e-mail]

(END) Dow Jones Newswires

December 16, 2021 17:11 ET (22:11 GMT)

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