Huge writedown for Macmahon in full year results

Outgoing Macmahon CEO Sybrandt van Dyk

Macmahon Holdings has undergone restructuring in order to cover for nearly $220 million worth of loss-making impairments in FY15.

The Perth-based mining contractor has billed itself as a “smarter, leaner, more streamlined operation” in its 2015 Full Year report.

Company chairman Jim Walker said deteriorating market conditions, with revenue and contract losses from Christmas Creek, Eaglefield, Tavan Tolgoi and Waihi, had led to a push to restructure the business.

“The past 12 months have been exceptionally challenging for our people as we have resized and restructured the business,” Walker said.

“Over the past six months I have taken the opportunity to implement a new organisation structure in order to drive accountability across our senior project and operational personnel.”

Walker said that part of the restructuring included reducing layers of management, and consolidating their head office with maintenance facilities at the Perth Airport.

With net losses of $217.9 million for the 2015 financial year, Macmahon’s underlying profit after tax was $10 million.

The impairment included $27.3 million on inventory write-downs, and an impairment charge of $202 million.

Total revenue for FY15 was $660.2 million, however this year Macmahon expects revenue of $280 million to $350 million.

Among changes to the company was the hiring of new chief executive Sy Van Dyk, who has accepted a salary of $585,000 per annum, representing a 10 per cent reduction in line with a corporate nine day fortnight cost reduction of 10 per cent, as well as a 40 per cent reduction on the previous CEO salary.

Bonuses for the new CEO will be up to 75 per cent of fixed remuneration for achievement of 125 per cent of the board approved budget.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.