Macmahon Holdings says it has bounced back from a disappointing first-half result to lodge a full year profit of $1 million.
The latest profit result compared with a $37.9 million profit booked the previous year.
Macmahon posted a $13.2 million loss in the first half of financial year 2010-11, before a $14.2 million profit over the second half.
The construction and mining services contractor took a $45.9 million hit in the first half because of poor performance on BHP Billiton’s $500 million RGP5 Rail North project, and weak job attraction by its construction division.
Macmahon also booked a $9 million write-down due to extreme wet weather events during the course of the year.
Chief executive Nick Bowen said Macmahon had worked hard in the second half of the year to address its challenges and re-position the company towards profitability, after a “disappointing” and “unacceptable” first half.
Mr Bowen said the company finished the year with an order book at a record $2.8 billion and surplus cash over debt of $30 million.
“The outlook for the future is very positive,” Mr Bowen said.
“The company was able to finish the financial year with a solid order book and has since been awarded substantial contracts including the Tropicana Gold Project and a variety of other mining contracts.”
Also today, Macmahon announced it had been selected as preferred contractor to build a $300 million rail spur for Fortescue Metals Group at the Solomon Hub in the Pilbara.
The final contract is expected to be awarded by the end of September.
It will involve the construction of an 81 kilometre rail link from FMG’s main rail line to the Solomon deposit.
The contract follows the recent announcement that Macmahon’s surface mining division had won a 10-year deal at the $900 million Tropicana Gold project, jointly owned by Anglogold and Independence Group.
Mr Bowen said MacMahon’s international mining business was also providing good opportunities in Africa, Asia and Mongolia.
“The company’s balance sheet and current funding, combined with the positive market outlook across the construction and resources sectors, mean Macmahon is well positioned to capitalise on future growth opportunities,” he said.
“Given the number of mining and infrastructure projects recently won, plus the prospective opportunities, the company has strong momentum and will deliver improved profits and returns for shareholders in 2012.”
At 10:00AM (WST) Macmahon shares had gained 3.5 per cent, to trade at 58.5 cents.
