Maca profit rises, shifts focus to gold

Mining and civil engineering contractor Maca has posted a 6.4 per cent increase in profit to $34.7 million for the six months to December, despite revenue taking a hit from recent mine closures, as the company shifted its focus onto gold projects in South America.

Revenue for the half year was up 4.4 per cent to $319.7 million, with a 1.8 per cent increase in underlying net profit after tax to $33.2 million.

Maca said the half-year result reflected the strength of its earnings “despite what has been a very challenging operating environment for mining companies, and mining services and civil construction companies, due to weak commodity prices and poor market sentiment”.

Last month, Sydney-based miner Arrium said it was closing its Southern Iron project, where Maca had been providing its services.

Maca was forced to downgrade its full-revenue guidance by $30 million as Arrium said it would axe nearly 600 jobs.

“With the recent announcement of the closure of two projects, management continues to focus on ensuring the overall cost base of the business reflects the contracts in hand while providing flexibility to reallocate resources across projects,” Maca said.

“Operational activities have rebalanced towards gold with the contract win in Brazil.”

The company recorded cash on hand at $93.6 million and declared an interim dividend of 7 cents per share, up 7.7 per cent on the previous corresponding period.

Maca maintained its full-year revenue guidance of $620 million and said it anticipates net profit to exceed last year’s achievement of $55.4 million.

It said its decision to diversify its geographical exposure through its entry into South America allowed it to offset contractual changes as a result of a softer domestic market and provided commodity exposure towards gold.

Maca shares were 7.7 per cent higher at $1.04 per share at 11:30am.