Macmahon to post $20m loss in construction
MINING services company Macmahon Holdings will post a loss of up to $20 million this financial year because of its troubled construction business.
But the sale of the construction operations, approved by shareholders on Tuesday, will enable the company to focus on its better performing mining operations, it said on Wednesday.
Macmahon made a net loss of $37.6 million in the six months to December 31, due to almost $61 million in write-downs on its construction projects.
Leighton Holdings has bought all of the construction business' projects, and costs associated with the sale, plus ongoing losses, are expected to lead to a loss of between $10 million and $20 million for Macmahon in the full 2013 financial year, Macmahon chief executive Ross Carroll said.
Macmahon'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.