MADRID, Jan 23 (Reuters) - Shares of Spanish construction company ACS plummeted on Thursday after its Australian unit CIMIC Group announced its exit from the Middle East.
ACS, which controls CIMIC through a majority stake in Germany’s Hochtief, said it will book a 400 million euro ($443.76 million) one-off charge related to CIMIC’s decision.
CIMIC said earlier 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 an “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 liabilities associated to BICC.
Even though ACS said capital gains and operating efficiencies will offset the charge, its shares were down 11% in early trading. Shares of CIMIC were 20% lower.
ACS said it would report a net profit above 950 million euros for 2019 and maintain its dividend pay-out ratio at 65%.
($1 = 0.9014 euros)
$1 = 1.4622 Australian dollars Reporting by Inti Landauro; Editing by Jesus Aguado and Jan Harvey
Our Standards: The Thomson Reuters Trust Principles.