4 for the year ended 30 June 2025 The Directors present their report on the company consisting of McConnell Dowell Corporation Limited (the Company) and its controlled entities for the year ended 30 June 2025. DIRECTORS AND COMPANY SECRETARY The following persons were Directors of McConnell Dowell Corporation Limited during the financial year and up to the date of this report: Directors S.V. Cummins; A.H. Macartney; D. Morrison (resigned 10 February 2025); S.P. Collett (appointed 7 March 2025) Company Secretary D. Morrison (resigned 10 February 2025). PRINCIPAL ACTIVITIES The principal activity of the company is construction. There were no significant changes in the principal activities of the company during the year. CONSOLIDATED RESULT McConnell Dowell’s revenue contracted 14.6%, in line with previous expectations, to A$2.4 billion (2024: A$2.8 billion), following an expected softening of infrastructure markets in Australia and New Zealand. The Group’s gross earnings were negatively impacted by significant losses from the Jurong Region Line (J108) project in the Infrastructure Southeast Asia business unit, and the Kidston Pumped Storage Hydro (Kidston) project in the Infrastructure Australia business unit. Cost increases on these two key projects resulted in the recognition of a combined loss of A$98.4 million for the year ended 30 June 2025. While additional costs in the forecast cost to complete have been recognised in the year, the cash flow impact will largely materialise over the course of the next 12 months as the projects move to be completed. The healthy cash balance, supported by ongoing profitability and continued strong cash generation will fund the outflow expected from these projects. The J108 and Kidston projects were tendered and awarded prior to March 2020. Following the interventions and improvements to the risk management processes introduced in 2023, projects with this risk profile would no longer be tendered in the lump-sum contract form. The business continues to focus on specialised projects in Australia, New Zealand & Pacific Islands and Southeast Asia, offering engineering and infrastructure solutions in the transport, ports & coastal, water & wastewater, energy, resources and commercial building sectors. The Group enters FY26 with combined work in hand of A$2.1 billion, down from A$2.6 billion in June 2024. As previously guided, work in hand in the Infrastructure business units has reduced to A$1.2 billion (June 2024: A $2.2 billion), reflecting the overall reduction in state government spending (particularly in Victoria and New South Wales). The Infrastructure business units remain aligned to the market shift to defence, energy, water, marine and resources. Work in hand in the Building business unit has increased to A$864 million (June 2024: A$443 million) following successful award of projects in healthcare, recreation and education sectors. The Group’s Horizon 2030 Strategy is aligned with these trends, and the business is well placed to participate in these next waves of growth. KEY HIGHLIGHTS IN FY25 • Revenue contracted by 14.6% to A$2.4 billion (2023: A$2.8 billion), in line with previous expectations • Operating loss of A$54.1 million (2024: A$50 million operating profit), • Operating profit (excluding J108 and Kidston) of A$44.3million (2024: A$50 million operating profit), • Work in hand comparatively lower at A$2.1 billion with A$1.8 billion new work secured during the period. • Improved cash position with A$267.4 million in the bank. • Bonding & bank facilities available of A$580.3 million ($429.9 million utilised) with dedicated support from our financial partners. • Operating earnings improved in the Building business unit through continued solid project execution. OPERATIONAL PERFORMANCE Our commitment to ensuring the success of our operating brands, McConnell Dowell and Built Environs remains unwavering and in line with the objective of ensuring a sustainable future for both brands. McConnell Dowell delivers its infrastructure projects in three geographical regions – Australia, New Zealand & Pacific Islands and Southeast Asia. Built Environs delivers its building projects in New Zealand and the states of Victoria and South Australia. Infrastructure The Australia and Southeast Asia business unit have previously reported on under-performance associated with certain projects awarded in the preCOVID period. The majority of these projects have been managed to a satisfactory outcome and, while not contributing profit to the Group, they represent a reducing proportion of revenue as these projects are steadily worked out of the portfolio. The remainder of the project portfolio continues to perform well at higher average operating margins. The New Zealand & Pacific Islands business unit continues to deliver strong performance with revenue of A$317.3 million (2024: A$304.9 million) and has reported an operating margin of A$24.8 million (2024: A $21.7 million). As expected, work in hand is down in the period to A$168.8 million (June 2024: A$339 million), reflecting the timing of larger infrastructure project awards, particularly for government funded projects. An improvement is expected to emerge in the New Zealand & Pacific Islands markets in the coming year. The Australia business unit revenue decreased by 24.2% in the period to A$1.5 billion (2024: A$2.0 billion). Improving margins across its portfolio of projects have contributed to a strong performance for the business unit, however, this performance is overshadowed by the Kidston project in Queensland. The project has not achieved expected productivities, resulting in increased forecast cost to complete and a reported loss in the period. Cost escalation on certain alliance contracts translated into additional revenue at zero margin. Consequently, the Australia business unit will report a loss of A$8.5 million. As expected, work in hand has reduced to A$780 million (June 2024: A$1.6 billion), with new projects to the value of A$679.6 million awarded in the period. In the Southeast Asia business unit, newly awarded marine projects are profitable. However, the J108 project for the Land Transport Authority in Singapore has experienced delays and disruptions. These delays have resulted in commercial claims and increased forecast cost to complete. The commercial negotiations continue with the client and the project will report a significant loss in the year of A$57.3 million (2024: A$6.3 million loss). The business unit’s strategy focuses on self-performing projects in specialised sectors in Indonesia and Singapore. Building Built Environs has reported higher comparable revenue of A$491.1 million (2024: A$419.1 million), with improved operating earnings of A$17 million as compared to the prior period (2024: A$8.6 million). Work in Hand has increased to A$864 million (June 2024: A$443 million) and remains at comfortable levels to deliver similar revenue levels going forward. The improved operating performance and growth in order book reflects a disciplined approach to operation delivery and a focus on its targeted
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