21/02/2014 - 12:58

MACA boosted by 44% profit lift

21/02/2014 - 12:58

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Welshpool-based contractor MACA has broken a run of losses in the mining services sector, posting a 44 per cent gain in half-year profit.

MACA boosted by 44% profit lift

Welshpool-based contractor MACA has broken a run of losses in the mining services sector, posting a 44 per cent gain in half-year profit.

MACA reported a net profit of $32.6 million in the six months to December 2013, driven by a 47 per cent increase in contract revenue to $304.6 million.

Earnings before interest, tax, depreciation and amortisation increased by 35 per cent to $74.3 million.

MACA said a significant investment in capital during the previous financial year had translated to stronger earnings from its core mining and crushing division and a greater level of equiipment utilisation.

"The strong half-year result continues to demonstrate the consistency and the growth in MACA's earnings, which are underpinned by a long-term contract profile with growing mining companies across a diversified range of commodities," the company said.

"MACA's earnings are closely aligned with quality mid-tier miners who have successfully transitioned from the construction phase to production and have further plans to grow, which MACA has the capability and funding to support."

While the contractor's total work in hand currently sits at more than $1.5 billion, a suspension of operations at one of its major earthmoving contracts is expected to result in lower margins in the second half of the 2014 financial year.

Regis Resources announced yesterday it had issued MACA with a force majeure after torrential rain caused extensive flooding of open pit gold mines at its Duketon project in the Goldfields. 

MACA has stood down the majority of its workforce at the project and will retain only the crews required to undertake remedial works.

Video exclusively obtained by Business News shows the extent of flooding at the project. 

Despite this setback, MACA has reaffirmed its full-year revenue guidance of about $550 million and expects net profit to exceed that achieved in the 2013 financial year.

The company has announced an interim fully-franked dividend of 6.5 cents per share, up 44 per cent on the previous corresponding period.

MACA shares were trading 5.7 per cent higher at $2.59 at 12:54pm WST.

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