Mining contractor Macmahon Holdings posted a net loss of $29.5 million for the year ending June 30, a loss that is bigger than what it forecast.
It had a net profit of $56.1 million this time last year, the SMH reported.
The sale of its construction business to majority holder Leighton Holdings had an effect on the net loss, which is about $10-$20 million higher than earlier predictions by Macmahon.
Leighton purchased 10 Macmahon construction projects earlier this year, after Macmahon recommended shareholders vote in favour of the proposed purchase.
Macmahon rejected Sembawang’s bid to buy its construction business, saying it does not beat Leighton’s deal.
Macmahon said Sembawang’s $35 million bid was not practical.
The company said work will run scarce for the mining service industry, with increased contract suspensions and competition moving forward.
“Downward pressure on commodity prices will continue to present challenges for our industry,” Macmahon said.
“We expect to see an increase in the number of contractors competing for work.”
Macmahon said the shaft singing project at the CSA copper mine in NSW was abandoned.
Underlying net profit increased to $43.6 million and this did not include one-off items. But according to Thomson Reuters Starmine data, this did not meet analyst predictions of $47.4 million.
“The result was lower than expected due to the take-up of non-cash provisions for disputed claims, doubtful debts and asset impairment recognised in 2013,” the company said.
Macmahon said last year it would transition to being a mining services company and entered an Asset Purchase Agreement for their construction business with Leighton, which is its biggest shareholder.