Aug 17, 2010
Macmahon announces 120% increase in full year profit
Macmahon Holdings Limited (ASX: MAH) today announced a full year profit after tax of $37.9 million, an increase of 120 per cent on the prior comparative period of $17.2 million.
Macmahon Chief Executive Officer Nick Bowen said that during 2010 the Company achieved its objective of rebuilding the order book and consolidating its financial position.
“During the period, Macmahon successfully secured more than $2.1 billion of new contracts and extensions, leading to a significant increase in the order book,” he said.
“All mining contracts which were due for renewal were rolled over, including the $500 million
Orebody 18 / Wheelarra open cut contract in the Pilbara region of Western Australia and the $110 million Olympic Dam underground expansion in South Australia.
“The Construction Business continued to win work on the east coast of Australia, with a number of rail and road projects awarded by government clients.
“Further, our strategic push into the international market proved successful, with the award of a new quarrying contract in Nigeria for the French cement producer Lafarge. This is the first contract we have won in Africa, and coupled with several other project wins and extensions in Asia, our international portfolio of work is expanding.”
Earnings per share were 5.2 cents per share, an increase of 68 per cent. The Directors have declared a final unfranked dividend of 1.5 cents per share. Combined with the interim dividend of 1.5 cents per share, total dividends have increased by 100 per cent to 3 cents per share.
Revenue was marginally lower at $1.25 billion, impacted by client imposed cancellations and scale backs during the second half of 2009, as a result of the global financial crisis.
Mr Bowen said that the medium to long term pipeline of work for the Mining and Construction Businesses remained strong.
“We are seeing high tendering levels and substantial project opportunities in the resources and infrastructure sectors," he said.
“Our new funding facility, solid cash flow, robust balance sheet and excellent safety performance has us placed us in a strong position to take advantage of these future growth opportunities as they emerge.
“However, the proposed Minerals Resource Rent Tax (MRRT) is causing uncertainty for domestic projects that will be affected if the tax is implemented. Coupled with diminishing government spend towards infrastructure projects, the short term outlook remains unclear.”
At 30 June 2010, Macmahon had secured $1.0 billion of work for 2011.
Revenue for 2011 is expected to exceed $1.25 billion, with growth above this level dependent on the amount of new work secured in the coming months.
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