CIMIC (ASX:CIM) exits the Middle East, takes $1.8B write-off
  • ASX 200-lister CIMIC Group will exit the Middle East region as it looks to sell its 45 per cent interest in BIC Contracting
  • Reportedly, local market conditions are fast declining and CIMIC will redirect its focus to the Australian, New Zealand and Asia Pacific markets
  • As a result, the industry giant will take a $1.8 billion write-off and scrap its final dividends for 2019
  • Still, it expects to report net profits after tax of roughly $800 million
  • CIMIC's shares have dropped significantly by 19.9 per cent and is trading for $28.03 each

CIMIC Group (CIM) has completed its strategic review of its 45 per cent invested interest in BIC Contracting (BICC), a Middle Eastern-based company.

Part of this review included CIMIC initiating a confidential merger and acquisitions process regarding its financial investment in BICC.

The engineering construction giant also reported on the fast deterioration of local market conditions in the Middle East. This has forced BICC to engage with lenders, creditors, clients and other stakeholders.

Through extensive evaluation, CIMIC has chosen to exit this region and redirect its focus on growth opportunities in its core markets which are Australia, New Zealand and the Asia Pacific.

Financial Impact

CIMIC will take a $1.8 billion write-down in its 2019 financial statements. This represents all of CIMIC's exposure in relation to BICC.

This impact includes an expected cash outlay net of tax of approximately $700 million during 2020 and the company has committed facilities and cash available to meet its obligations.

As a result, CIMIC will not be declaring a final dividend for 2019.


Despite this outcome, CIMIC still expects to report net profits after tax of roughly $800 million. The company will announce its 2019 financial results on February 4.

CIMIC's shares have dropped significantly by 19.9 per cent and is trading for $28.03 each at 12:40 AEDT.


CIM by the numbers
More From The Market Herald
Wesfarmers (ASX:WES) - CEO, Rob Scott - The Market Herald

" Wesfarmers (ASX:WES) to sell stake in Coles (ASX:COL)

Australian conglomerate Wesfarmers (WES) has agreed to sell 5.2 per cent of the issued capital of Coles Group Limited (COL).
Afterpay (ASX:APT) - CEO, Anthony Eisen - The Market Herald

" ASX News: What’s the deal with the Afterpay (ASX:APT) share price?

Shareholders in buy now, pay later darling Afterpay (APT) have been taken on a nauseating rollercoaster ride over the past month.
Bank of Queensland (ASX:BOQ) - CEO, George Frazis - The Market Herald

" Bank of Queensland (ASX:BOQ) withdraws FY20 earnings guidance

Bank of Queensland (BOQ) is the latest publicly-listed company to withdraw its earnings guidance as its financials are hit by the global COVID-19...
Perseus Mining (ASX:PRU) - CEO, Jeff Quartermaine - The Market Herald

" Perseus Mining (ASX:PRU) prepares for West African outbreak

Perseus Mining (PRU) is yet to be materially affected by COVID-19, but is still preparing its West African mining operations as case number