Cconstruction firm Macmahon Holdings has warned its profit may fall as much as 64 per cent this year as its chief executive quit, slammed by cutbacks in the mining sector just a month after reporting a record profit.
Shares in Macmahon, 19 per cent owned by rival Leighton Holdings, have been on a trading halt since Monday ahead of the forecast revision and the resignation of chief executive Nick Bowen.
The company, which is also a mining contractor, said it now expects its full-year profit after tax will be between $20 million and $40 million, down from its forecast last month that profit would grow by 20 per cent to around $67 million.
It blamed "increased uncertainty about the outlook for new construction work given recent market volatility" and a sharp increase in costs to complete work it is doing on Rio Tinto's Hope Downs iron ore rail project in Western Australia.
"This is extremely disappointing, especially in light of similar problems in recent years," Macmahon chairman Ken Scott-Mackenzie said, referring to problems on the Hope Downs project.
Mr Bowen is being replaced by Ross Carroll, the company's former chief financial officer who has been promoted from the role of chief operating officer of the group's mining division.
Reuters