Macmahon maintains positive post-COVID outlook

Image: Macmahon

Macmahon Holdings has maintained a $7 billion tender pipeline despite a slower first half of the 2021 fiscal year.

The period saw the effects of COVID-19 and a change in accounting treatments at the Batu Hijau copper-gold project in Indonesia.

This restricted Macmahon’s revenue raising prospects, but company chief executive Michael Finnegan was confident of the position it left them in.

Of the $7 billion tender pipeline, $3 billion relates to new clients, while $1.2 billion is in underground work.

Macmahon was appointed as preferred contractor for the Foxleigh coal project in Queensland, the Bellevue gold operation in Western Australia and the Warrawoona gold project, also in Western Australia.

Additionally, Macmahon was also awarded the contract for the Deflector extension in Western Australia.

The results come amid the height of COVID-19, which pleased Finnegan.

“Macmahon has produced a solid first half result and I am pleased the business has continued to deliver growth in earnings and margins, despite COVID-19 disruptions and currency headwinds,” he said.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) was up 6 per cent to $121.2 million during the second half of last year, compared with the prior corresponding period.

“The first half was a consolidation period, but an important one for the business with continued growth of the underground division,” Finnegan said.

“The resource sector outlook is robust driven by high commodity prices and supportive capital markets. As a result, we have seen many clients advance their projects into the tender stage.”

Finnegan attributes his company’s growth to its breadth of services.

“We will leverage off our competitive advantage of being able to service both surface and underground mining concurrently. This will be supported by our continued investment in people, mining technology and ongoing digital transformation,” he said.

“Our focus will be on converting more opportunities to drive growth into (the 2022 fiscal year) and beyond.”

Macmahon shares are at $0.245, up 65 per cent since its COVID-19 lows in March 2020.

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