January 22, 2020 / 10:04 PM / 25 days ago

Australia's CIMIC to exit Mideast, expects $1.23 billion hit

(Reuters) - Australia’s CIMIC Group (CIM.AX) said on Thursday it was planning to exit the Middle East with the sale of its stake in BIC Contracting (BICC) and expects to take a one-off charge of A$1.8 billion ($1.23 billion).

The company said it has begun confidential talks with buyers to sell its 45% stake in BICC due to “accelerated deterioration” of market conditions in the region.

As a result, the engineering contractor said it would not declare a final dividend and expects to spend about A$700 million in 2020 on financial guarantees of certain BICC liabilities.

CIMIC said it would focus on its core markets in Australia, New Zealand and Asia Pacific. Excluding the impact from BICC, it expects net profit after tax to be around A$800 million for 2019, within its forecast range of A$790 million to A$840 million.

($1 = 1.4611 Australian dollars)

Reporting by Shreya Mariam Job in Bengaluru; Editing by Amy Caren Daniel

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