Macmahon boosts order book by $120M

After working on several major water infrastructure projects in Queensland, Machmahon has secured a contract with the state government as part of the Queensland Dam Consortium team to deliver a new dam and associated works about 50 kilometres southwest of Brisbane.Construction of the new Wyaralong Dam and associated infrastructure is expected to create more than 200 jobs. Meanwhile, the Sydney Catchment Authority has contracted Macmahon to construct new fish passages and create environmental infrastructure as part of the Nepean Weir upgrade.Macmahon will upgrade 10 weirs in the Hawkesbury-Nepean system to improve the health of the river.The NSW state water corporation has contracted Macmahon to work on the Blowering Dam as part of the state’s safety upgrade program. Once modified, the dam is expected to be able to withstand extreme flood conditions.“Our construction business is benefiting from the increased government spend on infrastructure projects, with these contract awards adding to our portfolio of government work,” Macmahon chief executive officer Nick Bowen said.“The total estimated value of these three contracts for Macmahon is approximately $120 million, providing a solid platform for our construction business leading into the 2010 financial year.” These latest contract awards come a few weeks after Macmahon slashed its 2009 profit guidance by around 60% from the $48 million predicted in December to $15-20 million.Revenue is forecast at $1.4 billion for the 2008-09 financial year, with the company saying its bottom line had been impacted by contract cancellations, alterations, severe weather in Western Australia and Queensland, and associated restructuring and redundancy costs.Macmahon said its mining services division had been the most heavily impacted, with monthly revenues 30-40% lower, on average, than six months ago, equating to more than $250 million of annualised revenue.Despite the slumping resources service side of the business, the company claims the federal government’s infrastructure stimulus will alleviate some of the pain inflicted by the struggling resources sector.At the end of April, the company’s order book sat at $1.6 billion. With the inclusion of Macmahon’s latest water infrastructure contracts, the order book would now sit at around $1.72 billion.Shares in Macmahon were up 0.5c to 40c in early morning trade.

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