Earnings drop for MACA

Mining and civil contractor MACA has announced a hit to earnings due to underperforming contracts in its Interquip and Victorian infrastructure divisions.

The company released a market update this morning outlining the impact, with Maca’s share price falling more than 20 per cent on the news.

“Earnings have been adversely affected by underperforming contracts in the Maca Interquip and Victorian civil and infrastructure divisions, with all costs on these projects now recognised,” the company said.

“In consequence, and based on information currently available, the board anticipates Maca's EBITDA for the half year to December 31 2017 will be in the range of $39-41 million and net profit after tax $10-12 million.”

Maca reported a full-year profit of $32.1 million in 2016-17 while EBITDA was $99.2 million.

The update also said there could be further costs associated with the projects.

“These estimates exclude any potential impairment which may arise when the carrying value of goodwill associated with these divisions is reviewed in the course of preparing the half-year accounts,” the company said.

Maca, which took a 60 per cent stake in mining equipment firm Interquip in December last year, said it was buoyant about future contracts.

“Maca remains very positive on its future pipeline of work and the company's strong financial position makes it ideally positioned to win new work from this pipeline,” the company said.

“The group continues to win moderately sized, shorter term civil jobs in both Western Australia and Victoria, and is currently still in contention for a number of significant mining and crushing projects.”