Shares of Vietnam-based infrastructure development company Cavico Corp. (Nasdaq: CAVO) skyrocketed more than 100 percent from Monday’s closing price in morning trading on Tuesday after the company announced that its subsidiary Cavico Hydropower Construction signed a tunnel construction contract for a hydropower plant in Vietnam valued at roughly $7.75 million.
Shares of Cavico reached an intraday high of $3.48 on Tuesday, up from Monday’s closing price of $1.70 per share.
“This is the largest hydropower project in Khanh Hoa Province,” said Cavico’s vice president Hai Thanh Tran in a statement. “In 2011 Cavico expects to be awarded many more tunnel construction projects as well as other civil and infrastructure construction projects throughout Vietnam. We are very confident that we will maintain our strong position in this sector due to our modern fleet of equipment and our skilled, experienced labor force.”
The announcement came on the heels of a $2 million tunnel excavation contract Cavico announced earlier this month, and a $6 million construction contract for another hydropower plant that was announced in late December 2010.
For the third quarter, Cavico reported a net loss of $1.9 million, or 62 cents per share, compared to a net loss of $2.6 million, or 85 cents per share in the third quarter of 2009. Revenue for the three months ended September 30, 2010 fell to $14.6 million, from $17 million a year earlier.
The company has given full-year revenue guidance in the range of $59 million to $62 million, and anticipates a net loss of between $6 million and $7 million for fiscal 2010.
Cavico’s CEO, Ha Quang Bui was bullish on the company’s future, however, largely because of Vietnam’s ambitious plans to build 48 hydropower stations exceeding 50 MW by 2025.
“We expect to benefit significantly from the Vietnamese government’s focus on the electricity shortage and development of the related projects, as well as the overall growth of Vietnamese economy,” Bui said in a statement.
Shares of Cavico are down about 5 percent over the past three months.