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Huge write-down derails Macmahon's performance, but worst is over

MACMAHON HOLDINGS has posted an "unacceptable" profit of $1 million, due to a write-down on a rail contract. Net profit dropped 97 per cent for the year to June 30 from $37.9 million a year earlier, the Perth-based mining services and construction company said yesterday.

MACMAHON HOLDINGS has posted an "unacceptable" profit of $1 million, due to a write-down on a rail contract. Net profit dropped 97 per cent for the year to June 30 from $37.9 million a year earlier, the Perth-based mining services and construction company said yesterday.

The company blamed the weak result on a disappointing first half, compounded by severe wet weather and the write-down of the $500 million RGP5 Rail North contract for BHP Billiton in the Pilbara region of Western Australia.

The chief executive, Nick Bowen, said the company had worked hard to try to overcome its disappointing first-half results.

He said Macmahon's outlook was positive and it had secured $1.25 billion of revenue for 2012 in mining and construction.

"Macmahon's order book is now at a record level of $2.8 billion and there is a very strong pipeline of work.".

In a separate statement, the company said it had won preferred contractor status to construct the first stage of the $300 million Solomon Rail project for Fortescue Metals, which would add $200 million to secured revenue for 2012.

Mr Bowen said the company won the 10-year, $900 million Tropicana Gold Project, one of the largest awarded to Macmahon's mining arm.

The Tropicana Gold Project, 330 kilometres east-northeast of Kalgoorlie, is part of the Tropicana Joint Venture, owned by AngloGold Ashanti Australia and Independence Group NL.

Mr Bowen said the company would deliver improved profits and returns this financial year.

Macmahon's revenue rose 22 per cent to $1.09 billion. It declared no final dividend for 2010-11, as opposed to 3? in 2009-10.


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