CIMIC Group has reported a $580.3 million net profit after tax for the 12 months to 31 December, up 11.5 per cent on the previous year.

The Sydney-based construction company (ASX:CIM) had a busy year that included buying up shares in UGL, Sedgman and Devine, the implementation of a share buyback program and securing several new major international projects.

Those projects included construction of the Canberra Light Rail Stage One in the Australian Capital Territory (a public-private partnership), the removal of level crossings in Victoria, and the construction of the Tseung Kwan O Lam Tin Tunnel in Hong Kong.

In mining and mineral processing, CIMIC diversified by geography and commodity, winning new work in North and South America, specifically Canada and Chile.

In services, major contracts acquired with UGL included metro rail network operations and maintenance in New South Wales and Victoria, freight rail and naval ship maintenance, water, and asset management services across LNG, oil and gas, and power.

CIMIC CEO Adolfo Valderas says the company entrenched is position as a leader in the delivery of complex infrastructure, mining and minerals, services and public-private partnership (PPP) projects.

"The transformation of our operations, culture and structure during the past two years has improved our competitive position and, due to our enhanced cash position, we have been able to pursue growth opportunities including the net investment of $1 billion," he says.

"Our balance sheet remains strong, with a good level of net cash providing continued flexibility for the next phase of growth."

CIMIC's acquisitions continue with the takeover of Macmahon. CIMIC has been a major shareholder in the company since 2007 and currently owns 22.98 per cent. During the year CIMIC also bought UGL mineral processing company Sedgman.

"The integration of UGL is underways and there are significant opportunities to extend the provision of services across CIMIC Group's operations. We anticipate strong growth in services, particularly in road and rail infrastructure, oil and gas, water, defence, and renewable energy," says Valderas.

"We have a solid basis for growth and our strategic acquisitions provide a platform for further expansion. We will continue to further diversify by commodity and geography, and maintain our focus on risk management and achieving sustainable cash backed profits."

Around $100 billion of tenders, relevant to CIMIC, have been identified for 2017 and there are around $250 billion of projects coming to the market in 2018 and beyond.

For the coming year, the company has $34 billion of work in hand, and it expects 2017 NPAT in the range of $640-$700 million, up 10-21 per cent.

The Board has declared a 100% franked final dividend of 62 cents per share to be paid on 4 July 2017. Total 2016 dividends were 110 cents per share ($357 million in total), a 14.6% increase compared to 2015. 

CIMIC shares have enjoyed a 43.8 per cent rise in value during the calendar year, and this morning the company is trading up an additional 5.18 per cent at $37.98 per share.

Business News Australia

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