Mining contractors report declining profits

Mining services firms GR Engineering Services and MACA have both recorded weaker profits for the full year, with GR’s bottom line slumping 45.7 per cent and MACA’s by 12.7 per cent.

GR’s revenue fell by 35.8 per cent to $182.3 million, while net profit decreased to $6.5 million.

The company increased its cash balance by $9.6 million to $31.4 million at June 30.

GR managing director Geoff Jones said project execution activity was lower in the 2019 financial year, against levels experienced throughout in the period prior.

“In FY19, GR Engineering transitioned from a period of strong design and construction activity and into a phase of consolidating new project opportunities,” Mr Jones said.

GR said it would provide guidance in November, when it is likely to have more certainty regarding the timing of key projects.

In contrast, MACA’s revenue rose 18 per cent to $665.7 million, however its net profit fell to $20.6 million.

Its debt rose from around $45 million to $82.8 million.

MACA has been impacted Blackham Resources’ financial woes, and as of May 31, Blackham owed MACA $11.3 million.

MACA is the contractor at Blackham’s Matilda-Wiluna operation.

In June, MACA provided Blackham a $12 million working capital facility and today the contractor said its relationship with gold miner remains to be a key one.

MACA said it anticipates revenue of $720 million for the 2020 financial year.   

Shares in GR were down 14.1 per cent to trade at 85 cents each at 3pm AEST.

Shares in MACA were flat at the close of trade at 90 cents each.