Macmahon’s profits fell to $14.1 million in the first half of the 2009 financial year, down from the $23.7 million recorded for the first half of the 2008 financial year. The contractor said the reduced profits were primarily due to the timing of settlement of claims and variations on two construction contracts, which are expected to be resolved in the second half of fiscal 2009. Contributing to the lower result was $1.4 million in costs associated with the failed takeover attempt of the drilling contractor Ausdrill last September. Tempering the profit reduction was an increase in total revenue for the group to $734.8 million, up $124.4 million or 20.4% on the previous corresponding period, with Macmahon’s construction and mining divisions both posting strong gains. Despite the result and current economic conditions, Macmahon had a positive outlook for the remainder of the financial year. Macmahon chief executive Nick Bowen said that while the profit figure was disappointing, the fundamentals of the business remain intact. “Although we have seen volume reductions on a number of mining contracts since December 31, we operate predominantly within the bulk commodities market, which is proving to be less volatile than other commodity markets.” “The outlook for the construction sector remains positive,” Bowen said. “The underinvestment in public infrastructure of rail, road and water during the past two decades will see a pipeline of work not only maintained but increased and we are confident that Macmahon can capture additional work in this market.” Macmahon was awarded more than $350 million of new construction projects in the half, which will help sustain the business going into 2010, Bowen said. The contractor’s order book at the end of December 2008 stood at $1.9 billion.
