Civmec (ASX:CVL) Surges 9% on $400M Contract Haul: Time to Buy the Infrastructure Boom?

Civmec lands A$400m+ in BHP and Fortescue contracts

Civmec (ASX: CVL) jumped 9% to A$1.60 on Monday after announcing over A$400 million in new contracts from mining giants BHP (ASX: BHP) and Fortescue (ASX: FMG). For investors watching Australia’s infrastructure boom, this is a big deal. Both companies are among the country’s most reliable spenders on major projects. With work locked in through FY27 and the stock trading at attractive forward multiples compared to its peers, the question is whether this marks a turning point after a tough FY25.
The contracts push Civmec’s order book past A$1.15 billion. More importantly, they signal that big miners are spending again, which could set up an earnings recovery in the second half of FY26.

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Civmec Deepens Tier-1 Relationships With BHP and Fortescue

What makes these contracts special is how long Civmec has worked with these clients. BHP was one of the company’s first major customers, and this new award shows that trust remains strong.

The main BHP project is the Port Debottlenecking Project 2 at Nelson Point in Port Hedland. Civmec will handle concrete and earthworks for installing a sixth car dumper. The company is also building the dumper itself at its Henderson factory. This kind of end-to-end delivery is exactly what major miners want from their contractors.

CEO Patrick Tallon summed it up: “BHP was among our earliest clients, and sustaining this healthy relationship makes this award especially meaningful.”

Energy Transition Work Opens New Growth Avenue

The Fortescue contracts add something different to the mix. Civmec will build EV charger facilities and pit power infrastructure at the Eliwana and Flying Fish mine sites. This work supports Fortescue’s push to electrify its mining fleet with electric excavators and drills.

This is the kind of decarbonisation work that should grow across the mining sector over the next decade. Getting in early with a major player like Fortescue positions Civmec to win more of this business as other miners follow suit.

The company is also growing its maintenance contracts in Port Hedland and Gladstone. Unlike one-off project work, maintenance revenue tends to be more stable and predictable, which helps smooth out earnings over time.

The Investor’s Takeaway for Civmec

On valuation, Civmec looks cheap. The stock trades on a forward PE ratio of roughly 9x and offers a dividend yield of around 4-5%, based on FY25’s total payout of 6 cents per share. For a company with over A$1 billion in contracted work and net cash on the balance sheet, that’s attractive compared to most ASX industrial stocks.

But there’s a catch. FY25 was a down year. Revenue fell 22% to A$811 million as major contracts like Covalent and Western Ranges wrapped up without immediate replacements. Net profit dropped to A$42.5 million from A$64.4 million. This is the cyclical nature of project-based businesses.

The A$400 million in new awards helps address this concern by locking in work through FY27. Management expects the second half of FY26 to be stronger, and tendering activity remains solid across energy, resources, and infrastructure.

For income-focused investors comfortable with some ups and downs, Civmec looks attractive here. The mix of Tier-1 clients, energy transition exposure, growing maintenance revenue, and a clean balance sheet creates a reasonable risk-reward setup. Growth investors may prefer to wait for the February 2026 earnings update to confirm that the recovery is tracking. The main risk is whether the contract pipeline keeps building.