Macmahon divests portion of equipment fleet

ASX-listed contractor Macmahon Holdings has offloaded a substantial portion of its mobile equipment fleet for about $44 million from a project in Queensland.

Macmahon executed a sale agreement for part of its mobile equipment fleet located at the Dawson South project, where it is the mining contractor.

The equipment was sold at market rate and is expected to generate net cash inflows of about $44 million, to be collected in FY24 and FY25.

Macmahon has been the mining contractor at the open cut steel making coal mine in Queensland, with the term due to end in June.

The contractor told the market the parties were in negotiations on the terms on a new contract, and that is expects to retail is incumbent workforce of about 210 staff.

It said the move was part of its strategy of improving the cash-backed return on average capital employed in the business.

“I’m pleased we have been able to sell a substantial portion of the Dawson South fleet and progress Macmahon’s capital light strategy to improve ROACE performance- where our target was recently increased from 15 to 20 per cent,” Managing director Michael Finnegan said.

Macmahon’s shares last traded hands at 25 cents apiece, up 6.4 per cent at 2PM AWST.