Macmahon may exit Nigeria

Image: http://www.macmahon.com.au/

Macmahon is conducting a review over whether to continue its operations in Nigeria following the abduction of several workers earlier this year.

 Three Australians were among seven workers kidnapped by a group of up to 30 militants which attacked a convoy of vehicles near Calabar, killing one of the drivers.

The men were released around three days later; it is believed no ransom was paid for their return.

 The company could potentially lose $6.4 million in revenues if they exit from the country.  

“Due to heightened security concerns, Macmahon is now reviewing whether it should continue its business in Nigeria,” the company said in its recent annual report.

Macmahon is also suffering other losses from increasing maintenance costs, low volumes, project closures, and industrial action.

Their annual report recorded $347 million in revenue, a 47 per cent drop from last year’s $660 million.

Macmahon chairman Jim Walker said the issues in both Nigeria and at Newcrest Mining’s Telfer copper-gold mine in the Pilbara – which was impacted by complicated site conditions, start-up costs, and added maintenance costs for equipment – would affect profits in the near future.

 Walker did note some positive movement ahead, as volumes at the Tropicana gold mine are set to increase.

 The company’s revenue forecast for 2017 is between $350 million and $370 million.