Macmahon has lost the Mount Morgans contract yet Macquarie considers this fairly immaterial as it coincides with the contract expiring. The loss of the contract will not affect guidance, set for $1.6-1.7bn in revenue and EBIT of $95-105m.
Open pit operations at Mount Morgans will be suspended by the end of June owing to inflation pressures, the owner Dacian Gold ((DCN)) has announced. The underground will continue until developed stopes have been mined in the first quarter of FY23.
Macquarie believes there are positives in this announcement as it could free up personnel and equipment to be directed to the remainder of the portfolio. Outperform rating and $0.30 target maintained.
Sector: Capital Goods.
Target price is $0.30.Current Price is $0.14. Difference: $0.16 – (brackets indicate current price is over target). If MAH meets the Macquarie target it will return approximately 53% (excluding dividends, fees and charges – negative figures indicate an expected loss).
