The Cimic Group Ltd (ASX: CIM) share price has jumped 2% in early trade after a new contract announcement from the engineering and construction group.
What’s moving the CIMIC share price today?
The key announcement has sent the CIMIC share price climbing higher this morning.
CIMIC’s subsidiary, UGL, has secured contracts to provide maintenance, turnarounds and project services in the oil and gas sector.
UGL is expecting these contracts to generate a combined revenue of approximately $450 million. They will be executed over a multiple-year period from December 2019.
The contracts will extend UGL’s maintenance and turnaround services at the Chevron-operated Gorgon and Wheatstone facilities in Western Australia.
There’s also an extension of integrated services for structural, mechanical, piping, electrical and instrumentation for existing oil and gas sector clients in Western Australia and Victoria.
Investors have been bullish on the news as the CIMIC share price has jumped in early trade.
How have the group’s shares performed recently?
It’s been a disappointing 12 months for shareholders of the engineering and construction group.
The CIMIC share price has slumped 40.21% lower over that period and is down 14.02% since the start of the year.
That valuation decline has pushed CIMIC’s dividend yield to 5.50% per annum. The group boasts a market capitalisation of $9.25 billion and has climbed off a 52-week low this morning.
It’s been a similar story for fellow engineering and construction group, Downer EDI Limited (ASX: DOW). The Downer share price is down 6.40% since the start of the year which included a 20% drop in just one day.
Despite recent declines in the CIMIC share price, there have been consistent contract announcements from the group.
It was a disappointing full-year result from CIMIC so I don’t think I’d be buying just yet.
Personally, I want to see a turnaround in earnings and steady operations from the ASX companies I invest in.
The post Why the CIMIC share price is surging higher today appeared first on Motley Fool Australia.
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