UPDATE 1.50pm: Mining services company MacMahon has tried to rule a line under its recent underperformance but admits it will still post a full-year loss of as much as $20 million.
The company this morning announced a first-half loss of $37.6 million, a day after shareholders agreed to jettison its troubled construction division as part of a deal with major shareholder Leighton.
Macmahon wants to instead focus exclusively on its more profitable mining division.
However costs associated with the sale to Leighton, plus ongoing losses, are expected to lead to a full-year loss of between $10 million and $20 million for Macmahon, chief executive Ross Carroll said in a statement.
The $37.6 million loss for the six months to the end of December 31 was attributed mainly to $61 million in writedowns on construction projects.
Macmahon shares closed down one cent, or 2.94 per cent, at 33 cents in a firmer market.
The company's mining business made a profit before tax of $38.4 million in the six months to December, up 20 per cent on the previous corresponding period.
The business provides drilling, blasting and other services for clients including BHP Billiton and Fortescue Metals Group.
Macmahon expects it to make a pre-tax profit of more than $85 million in the year to June 30.
"The recent growth of our mining business in a time of challenging market conditions highlights its sustainability and holds the company in good stead for its mining focused future," Mr Carroll said.
Leighton chief executive Hamish Tyrwhitt said Macmahon's construction contracts would now begin transferring to the John Holland business, expanding that company's presence in the Northern Territory.
"We are planning a seamless transition of the projects," Mr Tyrwhitt said.Indian-owned firm Sembawang Australia had also been trying to buy MacMahon's construction business, and has vowed to maintain its interest despite shareholders approving Leighton's purchase.
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