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CIMIC Group Limited Annual Report 2016 |
Operating and Financial Review
FINANCIAL POSITION
(CONTINUED)
NET CASH / (DEBT) AND GEARING
Net cash was $409.3 million at 31 December 2016, a decrease of 63.2%, or $702.2 million, compared to 31 December 2015. Net cash at
31 December 2016 would have been approximately $1.4 billion if adjusted for the share buy-back, the net impact of the investments in
UGL, Sedgman and Devine, and the Nextgen divestment.
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At 31 December 2016, the Group’s gearing was 1.7% compared to below zero at 31 December 2015.
Interest bearing liabilities
Current and non-current interest bearing liabilities were $1,167.2 million at 31 December 2016, an increase of 10.5%, or $110.9 million,
compared to 31 December 2015. The increase is a result of consolidating UGL’s interest bearing liabilities, as well as foreign exchange
impacts on interest bearing liabilities. This has been offset by the repayment of $276.9 million of finance leases during the course of the
year.
Bonding
CIMIC had significant bonding and guarantee facilities available which are integral to the successful delivery of existing and future work in
hand. Bonds and guarantees outstanding at 31 December 2016 were $3,967.6 million. An additional $1,544.8 million was undrawn of
which $575.4 million was committed and $969.4 million was uncommitted.
Credit ratings
On 14 December 2016, Standard & Poor’s confirmed its current investment grade rating for CIMIC of ‘BBB-/A-3’ with a stable outlook. On
10 October 2016, Moody’s Investors Service maintained an investment grade rating for CIMIC of ‘Baa3’ with a stable outlook.
CURRENT ASSETS
Trade and other receivables
Trade and other receivables were $3,209.6 million at 31 December 2016, an increase of 20.7%, or $550.0 million, compared to
31 December 2015. The figure includes $2,607.9 million (31 December 2015: $2,145.0 million) of amounts due from customers (refer to
net contract debtors below). The remaining balance relates to sundry debtors, joint venture working capital and other receivables.
The Group’s net contract debtors was $1,384.6 million at 31 December 2016, a decrease of 7.6%, or $114.6 million, compared to
31 December 2015. CIMIC continued to deliver an improvement in the level of net contract debtors and to de-risk the balance sheet
during the period. The Group has achieved a decline since 31 December 2015 due to its focus on debtor reduction and cash collection
initiatives.
The Group’s $675.0 million contract debtors portfolio provision remains unchanged at 31 December 2016.
Current tax assets
Current tax assets were $28.0 million at 31 December 2016, an increase of 5.3%, or $1.4 million, compared to 31 December 2015.
Inventories: consumables and development properties
Inventories: consumables and development properties were $213.0 million at 31 December 2016, a decrease of 19.3%, or $51.0 million,
compared to 31 December 2015. The reduction is due to the sale of development property assets over the course of the year.
Assets held for sale
Assets held for sale were $47.7 million at 31 December 2016, a decrease of 79.8%, or $188.1 million, compared to 31 December 2015.
Assets held for sale at 31 December 2016 of $37.2 million relate to the Group’s marine fleet. The 31 December 2015 balance included
Arutmin Indonesia mining assets, which have been sold in FY16.
NON-CURRENT ASSETS
Trade and other receivables
Trade and other receivables were $1,235.8 million at 31 December 2016, an increase of 39.0%, or $346.6 million, compared to
31 December 2015. This figure includes $1,043.2 million (31 December 2015: $842.7 million) of non-current loan receivables and interest
receivable owed by HLG Contracting, (refer to the Financial Report, ‘Note 8: Trade and other receivables’).
Inventories: development properties
Inventories: development properties were $166.9 million at 31 December 2016, a decrease of 39.4%, or $108.4 million, compared to
31 December 2015.
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Share buy-back program ($425.9 million); the net impact of the purchase of UGL of $701.4 million; the net impact of the purchase of
shares in Sedgman and Devine, less the cash acquired from the consolidation of Sedgman, of $76.9 million; and Nextgen proceeds of
$180.8 million.
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