Macmahon Powers Ahead with 11% Revenue Growth and 73% Dividend Boost

Strong Financial Momentum

Macmahon Holdings Limited (ASX, MAH) has delivered a compelling first half performance for the six months ending December 2025, underscoring the success of its diversification strategy. The company posted an 11% increase in revenue to $1.3 billion, driven by growth in both its underground mining and civil infrastructure segments. Underlying earnings before interest and tax (EBIT(A)) rose 17% to $91 million, reflecting improved operational efficiency and margin expansion.

Reported net profit after tax (NPAT) surged 61% to $48.2 million, boosted by strong underlying earnings and effective cost management. This robust profit growth signals Macmahon’s ability to convert revenue gains into bottom-line results, a positive indicator for investors.

Operational Highlights and Segment Growth

The mining division, which generated approximately $1 billion in revenue, maintained a healthy EBIT(A) margin of 7.5%. Notably, the underground mining business experienced a 22% revenue uplift, supported by new contract awards in Australia and Indonesia. The civil infrastructure arm also expanded, contributing over $300 million in revenue with an improved EBIT(A) margin of 6.2%. New contracts worth $350 million were secured during the half, with an additional $150 million awarded in January 2026, reflecting strong market demand across resources, renewables, and infrastructure projects.

Financial Discipline and Balance Sheet Strength

Macmahon’s disciplined capital management is evident in its improved cash flow and reduced leverage. Underlying operating cash flow increased 17% to $190.5 million, with a cash conversion rate exceeding 95%. The company lowered net debt by 11% to $144.1 million, reducing gearing to 16.8% and net debt to EBITDA ratio to a conservative 0.36 times. Return on average capital employed (ROACE) improved to 21.2%, edging closer to the company’s ambitious 25% target.

Capital expenditure remained steady at $97 million, primarily focused on sustaining assets. Free cash flow was $39.3 million, slightly impacted by a one-off $20 million tax payment as Macmahon transitioned to taxpayer status. The company’s strong balance sheet, supported by $538.8 million in cash and undrawn facilities, positions it well for future growth and acquisition opportunities.

Dividend and Outlook

Reflecting confidence in ongoing performance, Macmahon increased its fully franked interim dividend by 73% to 0.95 cents per share. This payout aligns with the company’s policy of distributing 30% to 45% of underlying earnings. Looking ahead, Macmahon reaffirmed its FY26 guidance, targeting revenue between $2.6 billion and $2.8 billion and underlying EBIT(A) of $180 million to $195 million. With an order book of $5.1 billion and a robust $25.6 billion tender pipeline, the company anticipates stronger second-half results.

Managing Director Michael Finnegan highlighted the successful implementation of the Operating Company model across Australia, Indonesia, and Malaysia, which has laid the foundation for sustained growth. The focus remains on organic expansion and strategic acquisitions to broaden service offerings within the resources sector.