Macmahon Holdings Limited (ASX: MAH) is an ASX listed company that offers mining and construction services to the client.
Yesterday, on 22nd May 2019, the company released its Singapore and Hong Kong 22-23 May 2019 Presentation, where it has highlighted the company’s services, equipment, operations, financial performance, key contracts, work in hand along with the outlook and strategy.
The presentation begins with the services provided by the company, such as underground mining, civil/mining services, surface mining along with plant and maintenance. On the underground mining front, MAH provides services such as mine development, mine production, raise drilling, cable bolting, shotcreting, remote shaft lining and shaft sinking. Civil/Mining services include mining infrastructure and rehabilitation. The surface mining includes mine planning and analysis, mine management, drill and blast, bulk and selective mining, crushing and screening, fixed plant maintenance, water management as well as equipment operation and maintenance. The plant maintenance services include service and maintenance of equipment. It also consists of rebuilding components as well as complete in-house repairs.
The company has 268 dump trucks, 112 excavators and loaders and 72 drill rigs. MAH’s operations are spread throughout Australia and Southeast Asia. It also has an expanding international footprint.
The presentation also showcased various projects. The company was awarded a 10-year mining contract for Tropicana Gold Mine Project situated in Western Australia, and the mining had begun in July 2012. This project is a JV between AngloGold Ashanti Australia Pty Ltd (with 70% stake) and Independence Group NL (the remaining 30% of stake). In this project, the company was able to achieve a reduction in the unit cost by ~37% from 2015, and in May 2019, the Boston Shaker Underground five year contract has commenced. Telfer gold-copper mine is another project in the Pilbara region of Western Australia. The company was awarded a rolling contract until 2022 for this project, which started in February 2016. The other projects of the company are summarised in the below table.
At present, the company has an order book of approximately ~$4.8 billion, with excellent visibility and a solid platform and the three years’ work in hand.
MAH’s key achievements in the first half of FY2019 includes:
- The successful ramp-up of Batu Hijau capacity. The company was able to achieve performance (gain-share) payment of $780,000 in the first half of FY2019.
- Ongoing improvement in safety performance, including the rollout of the mental health program.
- Securing new work at Nifty, Fosterville and a new quarry project.
- Entering in a Boston Shaker Underground agreement over a period of five years.
In H1 FY2019, MAH reported an increase in the revenue of 101% to $542.2 million as compared to the previous corresponding period (pcp). The underlying EBITDA was up by 94% to $89.1 million on pcp. The underlying net profit after tax went up by 304% to $32.3 million on pcp.
The balance sheet of the company witnessed a nosedive in the net asset base. The total shareholders’ equity for the period stood at $409.8 million. The company reaffirmed it FY19 guidance.
In the last five years, the shares of MAH has generated a return of 85.71%. On 23rd May 2019, the shares of MAH were trading flat at a price of $0.195 (as at AEST: 12:37 PM). MAH holds a market cap of $420.22 million, with approximately 2.15 billion outstanding shares and PE ratio of 8.440x.
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