Macmahon announces multi-million dollar writedown

Mining service contractor Macmahon Holdings has announced a $125 million writedown due to challenging conditions in the resources sector.

The company said it expects to impair the carrying value of equipment and inventory assets.

The decision comes amidst low demand and market prices for used mining equipment and inventory.

Macmahon said an additional pre-tax charge in the range of $95-$125 million is likely to be recorded.

It said as the charge is a non-cash item, it will not have any impact on cash-flow or the company’s existing operations.

Earlier this year Macmahon posted a $112.5 million loss for the half year which included a $135 million writedown.

Underlying net profits for the half year to December 2014 came in at $11.3 million, after revenue of $384.3 million, which was down on the previous period’s revenue of $550.1 million.

In April the contractor cut 40 jobs and altered work rosters in response to changing market conditions.