Macmahon Delivers Record $2.6bn Revenue and 37% Profit Rise in FY26

Record Revenue and Earnings Mark Tenth Consecutive Year of Growth

Macmahon Holdings Limited (ASX:MAH) closed FY26 with a record $2.6 billion in revenue, marking an 8% increase on the previous year, while underlying earnings before interest, tax, depreciation and amortisation (EBITDA) edged up 2% to $393.8 million. More impressively, underlying EBIT(A) climbed 11% to $190.1 million, reflecting operational improvements and a favourable contract mix.

The company’s statutory net profit after tax surged 36.8% to $101.1 million, boosted by disciplined cost management and reduced depreciation following the completion of capital-intensive surface mining projects. This performance extends Macmahon’s decade-long streak of meeting or exceeding market guidance, a feat underscored by its recent inclusion in the S&P/ASX 300 Index.

Strong Contract Wins and Diversification Drive Growth

Macmahon’s growth was fuelled by robust contract wins across surface mining, underground mining, and civil infrastructure divisions. Highlights include a $792 million three-year extension at the Byerwen Coal Mine, with a two-year option that could push the contract value to $1.32 billion. In underground mining, the company secured over $1 billion in new contracts, including a $355 million deal at Mt Marion and a $406 million contract at Snowy River in New Zealand.

The civil infrastructure arm, bolstered by the full integration of Decmil, contributed substantially with over $500 million in new work awards including projects in renewables, government infrastructure, and resources. Notable contracts include a $120 million earthworks framework agreement with Rio Tinto in the Pilbara and a $51 million balance of plant contract at the Waddi Wind Farm.

Internationally, Macmahon expanded its footprint with contracts at the Toka Tindung and Kucing Liar gold mines in Indonesia, reflecting its strategic diversification into Southeast Asia, which now accounts for about 10% of group revenue.

Financial Discipline Lowers Debt and Boosts Returns

The company’s strong free cash flow generation of $103.1 million enabled a 32% reduction in net debt to $111.1 million, improving gearing to 13.1% and net debt to EBITDA to a conservative 0.28 times. This financial discipline supports Macmahon’s target return on average capital employed (ROACE), which rose to 22%, edging closer to the 25% long-term goal.

Capital expenditure was managed prudently at $204.3 million, down from $221.2 million the prior year, reflecting the completion of legacy surface mining projects and a focus on sustaining and growth capital aligned with contract requirements.

Safety and Sustainability Remain Central

Macmahon’s Total Recordable Injury Frequency Rate (TRIFR) improved to 1.98, down from 2.99 in FY25, while the Lost Time Injury Frequency Rate (LTIFR) halved to 0.23. Despite this progress, the company mourned the tragic loss of a worker at the Fosterville Gold Mine in December 2025, reaffirming its commitment to safety and mental health through initiatives like the award-winning Strong Minds, Strong Mines program.

On the sustainability front, Macmahon completed its first mandatory climate-related financial disclosures under AASB S2, established a Scope 3 emissions baseline, and conducted climate scenario analyses to assess resilience under different warming pathways. The company’s approach integrates climate risk management into its enterprise risk framework and strategic planning, although formal emissions reduction targets are yet to be set.

Dividend Boost and Positive FY27 Outlook

Reflecting its strong earnings and cash flow, Macmahon’s Board declared a fully franked final dividend of 1.25 cents per share, lifting the total FY26 dividend to 2.20 cents per share; a 47% increase on FY25. The dividend payout ratio aligns with the company’s updated policy of 35% to 45% of underlying earnings per share for FY27.

Looking ahead, Macmahon has secured $2.2 billion of revenue for FY27 within a $5.9 billion order book and a $25 billion tender pipeline, with $13.8 billion expected to be awarded in the next 12 months. Guidance for FY27 anticipates revenue between $2.85 billion and $3.05 billion and underlying EBIT(A) of $205 million to $225 million, driven by continued growth in underground mining and civil infrastructure.

Macmahon’s CEO Michael Finnegan emphasised the company’s strategic focus on diversification, operational excellence, and client partnerships to sustain growth and returns amid ongoing commodity price volatility and global uncertainties.

Board Renewal and Governance Enhancements

The year saw significant Board renewal with three new Non-Executive Directors appointed, bringing expertise in mining, capital markets, governance, and international operations. The Board continues to strengthen governance frameworks, including enhanced oversight of climate-related risks and sustainability disclosures.

Macmahon’s governance and risk management practices underpin its stable leadership and disciplined capital management, positioning the company to navigate evolving market and regulatory landscapes.

What to Watch Next

Investors will be watching how Macmahon executes on its substantial tender pipeline, particularly the conversion of Letters of Intent into firm contracts, and the integration of new contract wins into operational performance. The company’s ability to maintain safety momentum and advance sustainability initiatives, including potential emissions targets, will also be key to its long-term value proposition.

Macmahon’s partial sale of a stake in its Homeground accommodation village to Allcap Securities, announced shortly before year-end, signals strategic moves to leverage infrastructure assets for growth in civil contracting, especially in the burgeoning Gladstone region linked to Project Velocity. The unfolding of this partnership will be a notable development to follow.

Finally, the company’s capital allocation balance between growth investment and shareholder returns will remain a focal point, especially as it pursues expansion in Indonesia and adjacent service offerings across the mining value chain.