Macmahon Holdings Limited · ASX:MAH
Macmahon — H1 FY2011 Earnings Presentation
32 slides from Macmahon's earnings presentation, Feb 23, 2011
Slide 1: Macmahon 2011 Half Year Results
For personal use only Macmahon 2011 Half Year Results Nick Bowen – Chief Executive Officer Ross Carroll – Chief Financial Officer 23 February 2011
Slide 2: Overview
Overview For personal use only Half year loss after tax of $13.2 million Result significantly impacted by RGP5 Rail North contract write-down Underlying profit after tax (excluding RGP5 Rail North contract) of $18 $18.2 2 million Surplus cash over debt of $21.2 million Won $492 million in
Slide 3: RGP5 Rail North contract
RGP5 Rail North contract For personal use only Contract experienced a number of issues Delays and cost increases Total write-down of $49 million in contract value for the half year $20 million announced in October 2010 A further provision of $29 million at 31 December 2010 Significant Va
Slide 4: Construction Business review
Construction Business review For personal use only External review completed The Construction Business remains viable Examining risks and reviewing processes to minimise impact Actions being undertaken: Strategy review – focus on core strengths in each state Restructuring to improve effi
Slide 5: Our people
Our people For personal use only Strong commitment to further developing the Company’s successful Indigenous training apprenticeships and training, graduate programs Significant focus on retention of key talent Initiatives driven towards reduction in turnover and g strategies to attract key y
Slide 6: Safety performance
Safety performance For personal use only per million n 14 12.7 12.9 12 10 of injuries p s worked 7.4 8 6 46 4.6 hours ency rate o 41 4.1 4 1.9 2.0 2 0.8 04 0.4 Freque 02 0.2 0 June 2007 June 2008 June 2009 June 2010 December 2010 LTIFR (Lost Time Injury Frequency Rate) TRIFR (Total Recordable Injury
Slide 7: Contract wins
Contract wins For personal use only $492 million of new contracts awarded: Karara rail contract, Karara Mining Limited, Western Australia, $86 million GEH/Roe interchange project project, Main Roads WA WA, Western Australia Australia, $74 million South Road Superway project, Department of Tran
Slide 8: Order book
Order book For personal use only 2 500 2,500 2,000 1,500 $m m ` 1,000 500 0 Order book Jun 09 Order book Jun 10 Order book Dec 10 Run off FY11 Run off FY12 Run off FY13+ Preferred tenderer status on $1.3 $1 3 billion of contracts 8
Slide 9: Financials
For personal use only Financials 9
Slide 10: Income statement
Income statement For personal use only $ millions Dec 10 Dec 09 Change % Revenue 601 0 601.0 656 3 656.3 (8%) EBIT – before significant item 31.4 33.4 (6%) Interest (5.8) (3.1) (87%) Profit before tax – before significant item 25.6 30.3 (16%) Significant item – write down of RGP5 Rail North contract
Slide 11: Mining performance
Mining performance For personal use only $ millions Dec 10 Dec 09 Change % Revenue 313.2 237.2 32% PBT 22 4 22.4 19 7 19.7 14% PBT margin % 7.2 8.3 Order book 1,273 567 125% Revenue increase underpinned by growth in the underground division Profit margin in line with targets Cameby Downs impac
Slide 12: Construction performance
Construction performance For personal use only $ millions Dec 10 Dec 09 Change % Revenue 287.8 419.1 (31%) PBT – before significant item 10.2 18.7 (45%) Significant item – RGP5 Rail North contract (48.9) - PBT (38.7) 18.7 (307%) PBT margin – before significant item % 35 3.5 45 4.5 Order book 804 716
Slide 13: Profit after tax
Profit after tax For personal use only 30 20 10 0 $m -10 -20 -30 -40 13
Slide 14: Cash flow
Cash flow For personal use only $ millions Dec 10 Dec 09 Change % Operating cash flow 37 2 37.2 60 6 60.6 (39%) Disposals 0.7 2.4 (71%) Capital expenditure 45.3 32.4 40% Cash at hand 96.5 100.7 (4%) O cash flow Op. f per share - cents 5.1 8.3 14
Slide 15: Cash flow analysis
Cash flow analysis For personal use only 150 $ millions 100 $m 50 0 15
Slide 16: Balance sheet
Balance sheet For personal use only D 10 Dec D 09 Dec Ch Change % Current assets 264.4 236.1 12% Non current assets 349.0 333.9 5% Total assets 613.4 570.0 8% Net assets 308.9 332.3 (7%) Net debt (21.2) (27.5) (23%) C Current t ratio* ti * 09 0.9 14 1.4 * Note – Non-current loans have been reclassif
Slide 17: Business overview
For personal use only Business overview 17
Slide 18: Mining Business – project updates
Mining Business – project updates For personal use only Argyle diamond mine, Western Australia Eaglefield coal mine, Queensland 18
Slide 19: Construction Business – project update
Construction Business – project update For personal use only Tiger Brennan Drive extension, Northern Territory
Slide 20: International
For personal use only International 20
Slide 21: Outlook
For personal use only Outlook 21
Slide 22: Growth opportunities
Growth opportunities For personal use only Tendering work across Australia and overseas Ensuring work undertaken is appropriate to risk appetite Focused on winning longer term contracts – provide steady revenue streams 22
Slide 23: Mining outlook
Mining outlook For personal use only Market conditions Outlook for the business • Demand from Asia strong – prices for key commodities remain elevated • Strong current order book • Substantial opportunities in iron ore, • Anticipate ongoing growth in coal and metals Australia and overseas • Signific
Slide 24: Construction outlook
Construction outlook For personal use only Outlook Market conditions • Focus on improving profit • Resources expansion plans driving and consistent returns pipeline of construction work • Implementing findings of • Continued government th business the b i review i infrastructure spending forecast on
Slide 25: Our strategy
For personal use only Our strategy 25
Slide 26: Strategic initiatives
Strategic initiatives For personal use only Area Initiatives Progress Continued commitment to safety Our People Focus on retention and recruitment Strengthening management team Delivering safe, efficient and reliable services Customers Flexibility and collaborative approach Developing co
Slide 27: Company Outlook
Company Outlook For personal use only Medium term outlook improving - preferred tenderer on $1 $1.3 3 billion of new work and strong tendering activity across both businesses Actions A ti ffrom construction t ti review i are b being i iimplemented l t d – positive iti changes h occurring Combi
Slide 28: Macmahon 2011 Half Year Results
For personal use only Macmahon 2011 Half Year Results Nick Bowen – Chief Executive Officer Ross Carroll – Chief Financial Officer 23 February 2011
Slide 29: Appendix - current customers
Appendix - current customers For personal use only 29
Slide 30: Appendix - balance sheet strength
Appendix - balance sheet strength For personal use only Gearing (%) 30.0% 26.0% 25.0% 20.0% 15.0% 11 6% 11.6% 10.0% 5.0% 0.6% 0.0% June 2007 June 2008 June 2009 June 2010 December 2010 -5.0% -10.0% 10 0% -6.9% -15.0% -12.9% 30
Slide 31: Appendix - order book
Appendix - order book For personal use only Commodity % Client % Style of contract % Limestone Rio Tinto 9% Iron Ore 8% Fixed 22% 26% Govt BHP Billiton 35% 22% Schedule of Govt Diamonds rates 35% 8% 50% Peabody P b d Coal 6% Alliance 14% Lafarge 24% Other 9% Other 12% 20% Od b Order book k comprised
Slide 32: Disclaimer and important notice
Disclaimer and important notice For personal use only This presentation contains forward looking statements that are subject to risk factors associated with the mining and construction businesses. It is believed that the expectations reflected in these statements are reasonable but they may be affec