Macmahon (ASX:MAH) reported a “strong first half” of FY2026, driven by revenue growth across its mining and civil infrastructure operations, improved cash generation, and continued progress on its diversification strategy, executives said during the company’s half-year results presentation.
First-half financial performance and cash flow
Managing Director and CEO Mick Finnegan said group revenue rose 11% to AUD 1.3 billion, while underlying EBITDA increased 10% to AUD 200 million. Underlying EBITA climbed 17% to AUD 91 million, which management attributed to growth in projects requiring less capital employed, resulting in lower depreciation and a higher return on average capital employed (ROACE).
Macmahon generated AUD 190.5 million in underlying operating cash flow, up 17%, with a first-half cash conversion of 95.2%. Free cash flow after tax, interest, and capital expenditure was AUD 39.3 million. Management noted the period included an estimated circa AUD 20 million final tax payment for FY2025, alongside FY2026 provisional tax, reflecting the company’s transition to being a full taxpayer in Australia.
Balance sheet, dividends, and capital management
Net debt fell from AUD 162.5 million at June 2025 to AUD 144.1 million at December 2025, supported by EBITDA performance and capital expenditure discipline. Gearing reduced to 17% and net debt to EBITDA declined to 0.36x. Lummis said cash and available banking facilities totaled AUD 539 million, providing “substantial operational flexibility and headroom” for growth and capital deployment.
Macmahon increased its interim dividend to a fully franked AUD 0.0095 per share, a 73% rise, equating to a 37% payout ratio. Management said this aligned with the company’s updated payout ratio range of 30%–45% of underlying earnings per share.
ROACE improved to 21.2%, up from 17.5% in the prior corresponding half and higher than the June 2025 result. Management reiterated its longer-term objective to lift ROACE above 25%, citing business mix changes and reduced capital intensity.
Operational performance: mining and civil infrastructure
Finnegan said mining remains the largest segment by revenue and employee numbers, delivering revenue and underlying earnings growth at improved margin. In surface mining, Macmahon secured a three-year extension at Byerwen valued at AUD 792 million, with a two-year option that could increase the value to AUD 1.32 billion. The company also received a seven-year extension at Langkawi in Malaysia.
Underground mining recorded new awards in Australia and Indonesia. Management said the underground pipeline supported its strategic objective of reaching AUD 750 million in underground revenue by the end of FY2028.
Civil infrastructure—re-entered through the 2024 acquisition of Decmil—represented 23% of group first-half revenue, with revenue of AUD 307 million and underlying EBITDA of AUD 19 million. Finnegan said those figures were up 61% and 67%, respectively, and accounted for around 21% of total group EBITDA. The underlying EBITDA margin improved to 6.2% from 6.0% in the prior corresponding half. Management highlighted AUD 500 million in new civil awards and said Decmil had begun moving to larger project packages after December 2025, citing the award of West Angelas bulk earthworks as an example.
Order book, pipeline, and FY2026 guidance
Macmahon entered the second half with an order book of AUD 5.1 billion, including contracts awarded by Rio Tinto in January 2026. Finnegan said the order book excludes certain extensions and short-term civil and underground “churn work,” typically around AUD 100 million–AUD 150 million annually. The company said contracted FY2026 revenue stood at AUD 2.5 billion, with work in hand of AUD 1.7 billion for FY2027 and AUD 1.1 billion for FY2028 (excluding potential scope growth, extensions, variations, and churn).
The tender pipeline was reported at AUD 25.6 billion, with management stating around AUD 14 billion was expected to be awarded within the next 12 months. During Q&A, Finnegan provided indicative win-rate expectations by segment for work expected to be awarded in the next 12 months, characterizing the approach as selective:
- Surface mining: “1-in-3 on balance,” with two opportunities described as already preferred or in negotiation.
- Underground: “1-in-2, 1-in-3,” with two opportunities described as imminent and in preferred or sole-source negotiation.
- Civil: “1-in-3 and 1-in-4,” which management said was more competitive.
Macmahon reaffirmed FY2026 guidance of revenue of AUD 2.6 billion–AUD 2.8 billion and underlying EBITDA of AUD 180 million–AUD 195 million, with management expecting a stronger second half.
Margins, capital expenditure, and working capital commentary
Asked about margin improvement, Finnegan said mining margins benefited from better underlying project performance and execution, supported by the rollout of a new operating company (OpCo) model that has driven efficiencies and tighter operational focus. He also cited seasonality and the absence of startups in the period as additional factors. Finnegan added the company was “not at the 8%” yet for mining margins and expected further benefits from underground scale and continued execution improvements.
On civil margins, Finnegan reiterated Macmahon’s expectation that civil infrastructure margins would typically fall in a 5%–7% range, “probably on balance, around six,” noting resource-related civil work tends to be higher than government and renewables work. He said management would “hold six as an expectation” while striving to improve through execution and efficiency.
Regarding capital expenditure, management maintained its full-year forecast of AUD 245 million, with a heavier weighting to the second half. Lummis said net capital expenditure in the first half was AUD 96.6 million. In response to an analyst question, Finnegan said the second-half spend implied about AUD 145 million, including roughly AUD 20 million of remaining growth capital primarily for underground projects, with the remainder considered sustaining capital.
On working capital, Lummis said first-half working capital and cash conversion typically run lower, but she expects cash conversion to return to around 100% for the full year. Management said divisional leaders are being held accountable for working capital performance under the OpCo model, while acknowledging startups can temporarily increase working capital needs.
Separately, management noted Macmahon now employs more than 10,000 people and said the group’s total recordable injury rate has continued to reduce since FY2021 as the workforce has grown. Finnegan also disclosed a fatality at the Fosterville Gold Mine in December 2025, saying it remains under investigation.
About Macmahon (ASX:MAH)
Macmahon Holdings Limited provides surface mining, underground mining and mining support, and civil infrastructure services to mining companies in Australia and Southeast Asia. The company operates in three segments: Surface Mining, Underground Mining, and International Mining. Its surface mining services include bulk and selective mining, mine planning and analysis, drill and blast, crushing and screening, fixed plant maintenance, water management, and equipment operation and maintenance. The company also provides underground mining services, including mine development and production, raise and production drilling, cable bolting, shotcreting, remote shaft lining, paste fill, and shaft sinking.
