Macmahon up despite big loss
Shares in Macmahon jumped today on hopes the troubled contractor has put the worst behind it with a first half loss of $112.5 million.
The bottom line loss included a previously-flagged, one-off charge of $123.8 million attributable to writedowns.
Excluding that, the company said it had made an underlying net profit after tax of $11.3 million.
The result was achieved on revenue of $384.3 million, down 30 per cent on the previous corresponding period.
Macmahon said the result reflected challenging market conditions in the resources sector.
Macmahon executive chairman Jim Walker said the company was focused on improving performance across its existing contracts and identifying new opportunities to further enhance the company's profitability.
"We are looking at every opportunity to improve our productivity and reduce costs," he said.
"We are currently in the process of streamlining our business in line with the changing conditions to ensure that we are operating as efficiently as possible."
Mr Walker said the company had already begun consolidating its Perth offices, as previously announced, and would be looking to further reduce our overheads over the coming months.
"Mining is cyclical and it is important to remember that over the company's long history, Macmahon has successfully adapted to changing market conditions through many cycles," he said.
"We have a healthy balance sheet that is underpinned by world class assets and a low gearing ratio of 11.3 per cent.
"This gives us a strong foundation to work from."
Mr Walker said the company aimed to target a broader range of contracting opportunities where it had a competitive advantage.
Late last week, Macmahon announced it had lost its biggest $780 million contract with Fortescue Metals Group at Christmas Creek.
Macmahon also announced today that discussions with a client concerning stalled operations in Mongolia were continuing.
"The agreement we have in place with our client in Mongolia protects the positions of both parties while we undertake negotiations," Mr Walker said.
"We are diligently working through this issue and are pursuing all options available to us to resolve this issue as quickly as possible.
Shares in Macmahon were up 1.1 cents, or 32.35 per cent, to 4.5 cents at the close after touching an all-time low of 3.1 cents on Monday.
