Macmahon maintains positive outlook

Staff reporter

Australian mining contractor Macmahon Holdings says its outlook remains positive, in the face of commodity price volatility and some negative industry headlines, after it reported half-year financial results that were in line with expectations.

The ASX-listed company reported first-half EBITA of A$68.1 million, up 26.9% year-on-year, on revenue of $966.3 million, which compared with $987.2m in FY23 H1 when Macmahon got a one-off $150m revenue kick from the Batu Hijau copper-gold mine in Indonesia.

Management expects a stronger second-half performance and is guiding for full-year EBITA of $130-140m on $1.8-1.9 billion of revenue, having already secured about $1.8 billion of full-year income.

Its FY24 capital expenditure forecast of circa-$203m hasn’t changed after H1 capex of $128.5m, including $17m for tyres. The full-year forecast excludes tyres.

“The industry demand outlook remains positive despite recent volatility in some metal prices, with significant ongoing activity across the mining and resources sector reflected in our highly filtered tender pipeline of $11.6 billion and solid order book of $4.4 billion,” management said.

Macmahon said its operations at the Greenbushes lithium mine in Western Australia were nearing steady-state. Greenbushes adds lithium exposure into a portfolio dominated by gold and metallurgical coal.

The company says free cashflow generation is expected to improve in the current half after it eked out $800,000 of FCF in H1 after capex, financing costs and investing activities.

Its net debt was $212.4 million at the end of December 2023.


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