On Track. Half Year Results Nick Bowen Chief Executive Officer Ross Carroll Chief Financial Officer 1

Transcription

1 On Track Half Year Results 2008 Nick Bowen Chief Executive Officer Ross Carroll Chief Financial Officer 1

2 Disclaimer and important notice 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 affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to differ materially, including but not limited to: actual demand, currency fluctuations, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates. All references to dollars, cents or $ in this presentation are to Australian currency, unless otherwise stated. References to Macmahon, the Company, or the Group may be references to Macmahon Holdings Ltd or its subsidiaries. 2 2

3 2008 Half Year Highlights $ millions $ millions HY08 Dec 07 Change Change % Profit % Revenue % EPS (cents per share) % Dividend (cents per share) % Order Book % 3 3

4 On Track To Meet Growth Targets Construction Business EXCEPTIONAL PERFORMANCE Memorandum of Understanding with Leighton ACCELERATES GROWTH opportunities Group Refinancing and Low Gearing IDEALLY POSITIONED to pursue growth opportunities Insulated from market uncertainty and interest rate hikes Mining Business awarded single largest contract ever $1.1 billion Spinifex Ridge contract for Moly Mines 4 4

5 Record Order Book Order Book ($ million) HY08 Feb 08 Order Book Moly Mines 5 5

6 Security of Revenue 1190 Order Book Run Off ($ million) Work Completed Order Book Run Off Moly Mines 95% of 2008 revenue target now secured Strong position for 2009 with $1 billion locked away, including Moly Mines 6 6

7 Order Book Diversity Duration of Contract (years) %* Style of Contract %* Fixed 3% > 5 22% % < 2 21% % Alliance 36% Schedule of Rates 61% Commodity %* Customer %* Diamonds 11% Coal 11% Nickel 6% Other 17% Iron Ore 18% Government 37% Government 36% * Excluding Spinfex Ridge contract for Moly Mines Other 25% Rio Tinto 9% BHP Billiton 26% Lafarge 4% 7 7

8 People and Safety People and Safety Group Employee Numbers Group Safety Performance (Total Recordable Injury Frequency Rate) HY HY08 8 8

9 Record Profits Income Statement $ millions HY08 HY07 Change % Revenue % $ millions HY08 HY07 EBIT % EBIT margin % 6.1% 6.0% 0.1% Interest Profit before tax Tax Net Profit after Tax (3.9) 33.2 (9.5) 23.7 (6.3) 22.2 (7.3) 14.9 (38.1%) 49.5% 30.1% 59.1% NPAT margin % 3.9% 3.1% 0.8% EPS (cents per share) % DPS (cents per share) % Interest Cover % ROE %* % * Note December 2007 ROE has been annualised 9 9

10 Construction Financial Performance $ millions Dec 07 Dec 06 Change % Revenue % EBIT % EBIT margin % 6.9% 2.8% 4.1% Capex (58.1%) Order Book % Employees % 10 10

11 Mining Financial Performance $ millions Dec 07 Dec 06 Change % Revenue % EBIT (15.0%) EBIT margin % 7.5% 9.1% (1.6%) Capex (65.7%) Order Book % Employees % 11 11

12 Profit Waterfall Profit Variance Analysis 5.2 (4.7) (5.4) (2.2) HY07 Profit Margin Construction Volume Construction Margin Mining Volume Mining Sale of Allplant Corporate Costs Interest Tax HY08 Profit 12 12

13 Superior Growth & Sustainable Margins Revenue ($ million) and EBIT margin (%) 5.4% 6.2% 6.1% 4.4% 4.3% HY08 H1 H

14 Strong Shareholder Returns NPAT NPAT Margin (%) Return on Equity (%) 2.8% 2.5% 3.2% % % 18.7% 17.4% 21.4% % 14.4% HY08 H1 H HY08 Note HY08 returns have been annualised 14 14

15 Cash Flow Positive Cash Flow $ millions millions Dec 07 Dec Dec Change Change % Operating cash flow % Investments (29.3) (100.0%) Disposals (93.7%) Other (4.9) 100.0% Capital expenditure* (24.1) (76.6) (68.5%) Net borrowings* (6.1) 20.9 (129.4%) Op. cash flow per share cents % EBITDA per share cents % * Includes equipment purchases under finance lease 15 15

16 Geared for Growth Net Debt ($ M) Gearing % 51.8% 50.7% 43.6% % % HY08 New financing package complete Protected from uncertainty in credit markets Conservative gearing Ideally positioned to take advantage of market opportunities 16 16

17 Record Returns Earnings Per Share (cps) Dividend Per Share (cps) HY HY08 H1 H2 Interim Final 17 17

18 Top Quartile Performer Total Shareholder Returns % TSR % % CLO TSE DOW BKN UGL ASL LEI MAH MND * Based on 3 year dividend data to 30 June 2007 and 3.5 year share price data to 31 December 2007 Top quartile performance We aim to be the long term investment of choice 18 18

19 Construction revenue and EBIT now over 50% of Macmahon business Margin growth reflects market conditions and better project management Increasing Infrastructure Investment Australian Engineering Construction Total = $259 billion Engineering Construction spend continues to grow work prospects on the East Coast remain outstanding Other Heavy Industy WA mining boom and SA Olympic Dam Expansion activities major opportunities Governments now focussed on redressing inadequacies in significant infrastructure through establishment of new statutory body Pipelines Water Harbours Railways Roads Bridges 19 19

20 Expanding Markets Bulk Commodities Australia Base Metals Production Australia Mt 1,200 1, e 2009e Iron Ore Black Coal 2010e 2011e 2012e 2,000 1,800 1,600 1,400 1,200 1, e 2009e Nickel (kt) Gold (t) Copper (kt) 2010e 2011e 2012e Emerging countries will drive world growth and demand for commodities Customer investment in iron ore, copper and uranium at unprecedented highs Coal infrastructure constraints presents a significant opportunity for the Construction Business 20 20

21 Market Focus QLD and NSW 5 year projected infrastructure investment: $129 billion WA and NT 5 year projected infrastructure investment: $78 billion Key opportunities: BHPB and Rio Tinto s expansion projects Roads South Australia 5 year projected infrastructure investment: $16 billion Key opportunities Coal infrastructure & mining Roads Water Infrastructure Rail Key opportunities Olympic Dam Expansion Road works 21 21

22 Logan River Catchment Project, Queensland 22 22

23 Eyre Highway, Western Australia 23 23

24 Newman Hub, Western Australia 24 24

25 Jilalan Rail Yard Upgrade, Queensland 25 25

26 Queensland Coal Projects 26 26

27 Ore Body 18 / Wheelarra, Western Australia 27 27

28 Olympic Dam, South Australia 28 28

29 Moly Mines, Western Australia 29 29

30 Strategy Focus on core activities mining, infrastructure and key bluechip customers Diversify and strengthen revenue base Australia and overseas opportunities Leighton MOU Pursue opportunistic acquisitions Company ideally positioned long term funding in place and low gearing = 20 to 30% annual growth for next 5 years 30 30

31 2008 Business Outlook Macmahon is On Track to meet full year revenue and profit targets of 30 per cent growth on 2007 With almost $1.2 billion locked away, the 2008 revenue target of $1.25 billion is 95 per cent secured EBIT margin sustainable at 6 per cent Order Book now at a RECORD $3.0 billion: Moly Mines single largest contract ever won $1.1 billion 31 31

32 Business Outlook Heavy focus on new project start ups Jilalan, Moly, Sinclair Ongoing focus on business development and tendering activities Opportunities to joint venture with Leighton Group being pursued Refinancing and Low Gearing well positioned for growth 20 30% profit growth for 2009 expected on the back of the strong order book 32 32

33 On Track 33

34 Appendix 1 Balance Sheet Balance Sheet $ millions Dec 07 Jun 07 Change % Current assets % Non current assets % Total assets % Net assets % Net Debt (21.1%) Gearing (Net Debt/Equity) % (7.3%) Current Ratio

35 Appendix 2 Key Mining Contracts Underground Mining / Services Argyle Diamond Mine development of the new block cave mine, Rio Tinto, WA, $215 million Olympic Dam Underground Extension development, cabolting and shotcreting, BHP Billiton, SA, $235million Cannington Underground Mine underground mining services, BHP Billiton, QLD, $20 million Rasp Underground Development initial development, CBH Resources, NSW, $16 million Jubilee Mines shaft sink, drill and egress system, Sir Samuel Nickel, WA, $14 million Open Cut Mining Moly Mines Spinifex Ridge Open Cut Mine all mining activities, including drill and blast, mining and crusher feed, Moly Mines, WA, $1.1 billion Orebody 18/Wheelarra Open Cut Iron Ore Mine drilling, blasting, loading, hauling and crushing and train loading of iron ore, BHP Billiton, WA, $465 million Waihi Open Cut Gold Mine drilling, blasting, mine ore and waste removal, Newmont Mining, NZ, $245 million Ellendale Open Cut Diamond Mine mining operations, Kimberley Diamonds WA, $153 million Argyle Diamond Mine (Tailings Disposal) tailing haulage and tails dam construction, Rio Tinto, WA, $115 million Sinclair Nickel project development and mining, Jubilee Mines, WA, $98 million Open Cut Mining (continued) Dampier / Cape Lambert stock pile management and iron ore hauling, Pilbara Iron, WA, $77 million Saraji Open Cut Coal Mine waste removal and coal mining, BHP Billiton Mitsubishi Alliance, QLD, $75 million Bootu Creek Open Cut Mine site works and mining services, Bootu Creek Resources, NT, $72 million Phosphate Hill includes mining ore and waste, Incitec Piviot, QLD, $81 million Lhoknga development and quarrying of limestone, A.P.M.C Lafarge, Malaysia, $64 million Kanthan includes drilling, blasting, loading and hauling to the crushing plant for the Kanthan Cement operation, A.P.M.C Lafarge, Malaysia, $29 million 35 35

36 Appendix 3 Construction Projects Rail Southern Improvement Alliance upgrade on the main rail line from Sydney to Melbourne, Australian Rail Track Consortium, NSW, Joint Venture total $580 million, Macmahon share $74 million Jilalan Rail Yard Upgrade An Alliance with Queensland Rail, to increase the capacity of the Goonyella coal rail network in QLD, Alliance total $250 million, Macmahon share $230 million Kingsgrove to Revesby Quadruplication expansion of the rail line within the Sydney rail network, NSW Transport Infrastructure Development Corporation, Alliance total $350 million, Macmahon share $52 million Eyre Peninsula Rail Upgrade upgrade of rail from Port Lincoln to Kimba, SA, Joint Venture total $18 million, Macmahon share $9 million Bridges Hale Street Link Alliance based contract, to design and construct a bridge across the Brisbane River, Brisbane City Council, Joint Venture total $240 million, Macmahon share $72 million Mamre Road Bridge, (Sydney, New South Wales), bridge construction, Road Transport Authority, $8 million Water Infrastructure Logan River Catchment Project Alliance based contract in partnership with Queensland Water Infrastructure, Alliance total $98 million, Macmahon share $88 million Stirling Dam Upgrade upgrade and strengthening work on the wall of the Stirling Dam, WA Water Corporation, $26 million Kingston Foreshore marine and foreshore development on Lake Burley Griffin in Canberra, Land Development Agency, $19 million Roads Goldfields / Esperance TNC provision of asset management, long term maintenance and rehabilitation services of road assets, Main Roads WA, $116 million (10 years) Mitchell Freeway Extension a design and construct contract for a 4km extension to the Mitchell Freeway, for Main Roads WA, $113 million Millstream Link a design and construct and maintenance contract for 90km of road between Karratha and Tom Price, Main Roads WA, total $143 million, Macmahon share $135 million Resource Infrastructure Newman Hub construction of structural foundations for new crushing and screening plant, BHP Billiton, WA, $84 million Blacktip civil works construction of an access road and general site civil work, ENI Australia, NT, $23 million Western Creek earthworks and drainage, Rio Tinto, WA, $8 million Cape Lambert Concrete Works civil infrastructure work, Rio Tinto, WA, $40 million Other Uluru Sunrise Viewing Area Parks Australia, $10 million 36 36