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CIMIC Group Limited Annual Report 2016 |
Operating and Financial Review
FINANCIAL PERFORMANCE
(CONTINUED)
MINING & MINERAL PROCESSING REVENUE
Mining & mineral processing revenue was $2.8 billion for FY16, a decrease of 3.4%, or $96.6 million, compared to FY15. During the second
half of the year, mining & mineral processing showed an improving trend in revenue. CIMIC maintains its strong position in the resources
sector, and further diversified into new commodity and geographic markets during the period.
The major mining & mineral processing projects by revenue included:
•
Lake Vermont, Mount Owen and Curragh North coal mines in Australia;
•
Solomon iron ore mine in Australia;
•
Prominent Hill copper and gold mine in Australia; and
•
Kaltim Prima coal mine in Indonesia.
SERVICES REVENUE
Services revenue from UGL, consolidated from 24 November 2016 (the period that CIMIC held an interest greater than 50%), was
$204.2 million.
COMMERCIAL & RESIDENTIAL REVENUE
Commercial & residential revenue was $439.8 million for FY16, a decrease of 55.5%, or $547.7 million, compared to FY15. The decline in
revenue is a result of the significant sales in FY15. This reflects CIMIC’s strategy to reduce the size and scope of its non-core business,
while continuing to maximise the value of its property investments.
CORPORATE REVENUE
Corporate revenue was $106.6 million for FY16, an increase of 17.7%, or $16.0 million, compared to FY15.
REVENUE – JOINT VENTURES AND ASSOCIATES
Revenue from joint ventures and associates was $2.7 billion for FY16, a decrease of 5.9%, or $167.1 million, compared to FY15.
Included in FY16 joint ventures and associates revenue is contributions from HLG Contracting and Ventia. Sedgman was an equity
accounted associate until CIMIC gained control on 23 February 2016.
EXPENSES
Expenses were $10.1 billion for FY16, a decrease of 19.1%, or $2.4 billion, compared to FY15. The decrease was in excess of the reduction
in revenue, and reflects the Group’s disciplined approach to cost management.
Depreciation and amortisation
Depreciation and amortisation was $337.4 million for FY16, a decrease of 38.0%, or $206.4 million, compared to FY15. FY15 included a
one-off impairment of $50.0 million due to the decline in the recoverable amount of the marine fleet that was idle, in the construction
segment.
EBIT
EBIT was $758.4 million for FY16, a decrease of 9.6%, or $80.5 million, compared to FY15. The EBIT margin was 7.0%, a 70 basis point
increase on FY15.
NET FINANCE COSTS
Net finance costs were $18.0 million for FY16, a decrease of 82.7%, or $85.9 million, compared to FY15. The decrease was due to the
Group’s improved financial structure, the buy-back of US$298.7 million of 10-Year Fixed-Rate Guaranteed Senior Notes in June 2015 that
resulted in a one-off expense in FY15, and significantly reduced interest costs over the remaining term of the Notes.
Finance cost detail
$m
2016
2015
chg. $
chg. %
Debt interest expenses
(67.1)
(152.7)
85.6
(56.1)%
Facility fees, bonding and other costs
(24.4)
(41.1)
16.7
(40.6)%
Total finance costs
(91.5)
(193.8)
102.3
(52.8)%
Interest income
73.5
89.9
(16.4)
(18.2)%
Net finance costs
(18.0)
(103.9)
85.9
(82.7)%
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