Carroll, an eight-year MacMahon veteran, walked out the door yesterday afternoon after just two years in the top job.
His severance will probably be a golden handshake, with his contract stipulating six months’ notice or payment in lieu.
Chairman Jim Walker will keep the seat warm, taking on an executive role until a replacement CEO is appointed.
There will be no changes to Walker’s remuneration during this period.
Carroll’s departure coincides with deputy chairman Barry Cusack’s resignation after more than a decade as a director, although that move was flagged last November.
Macmahon had intended to replace him, but now says it will reduce the size of its board to reduce costs.
“The board is committed to implementing cost saving measures across the business as the company navigates the current suppressed market for mining services,” Walker said
Macmahon’s shares have halved since August as the mining boom has rolled off.
Carroll had overseen a “back to basics” approach to cut costs and improve productivity that Macmahon had hoped would allow it to win more tenders, however work has been hard to secure and the company reduced its forecast revenue for 2014-15 to between $750 million and $850 million, down from between $750 million and $1 billion to recognise the challenging and competitive market.
It posted an after-tax profit of $30.4 million last year.
It has been a hard road for Macmahon since 2010. The company sold its construction business to Leighton Holdings in 2012 and completed its remaining construction contracts last year in order to focus entirely to the mining sector – just in time for the boom to end.
In November Carroll bemoaned the slowdown in the mining sector and the lack of new projects globally, moves to owner-operator mining and increased competition for new contracts.
Macmahon’s work contracts include Fortescue Metals Groups’ Christmas Creek iron ore operation and AngloGold’s Tropicana gold mine in Western Australia, a four-year raise drilling contract at BHP Billiton’s Olympic Dam mine in South Australia and OceanaGold’s Waihi gold mine in New Zealand.
This month it was expected to use its Big Rig, the world’s most powerful raise drill, to put in a new shaft at Olympic Dam.
The company has also suffered a challenging coal contract in Mongolia, where the operations were suspended by Erdenes Tavan Tolgoi, which had not been paying its bills.
Around $US30 million is owed to Macmahon by the state-owned miner.
The Tavan Tolgoi project was budgeted to deliver $A100 million in revenue during the 2014-15 financial year, but that now seems impossible, with Macmahon seeking to recover its investment.
Macmahon also has exposure to the Ranger uranium mine in the Northern Territory and operations in Malaysia, Indonesia and Nigeria, with Africa expected to be a land of opportunity this year.
Macmahon expects to be well positioned to see through the downturn in the cycle overall, with cash in the bank and a new three-year $317.5 million financing facility, and an order book in excess of $2 billion.
Carroll replaced Nick Bowen as Macmahon's CEO in September 2012 after the company’s profitability suddenly crumbled, leading to a $30 million loss in 2013.
Bowen departed after it emerged that there were major problems with the Hope Downs 4 Rail Earthworks contract in WA that would see 2013 earnings fall by up to 70%, a stark contrast to Bowen’s optimistic prediction of a $67 million profit made just weeks earlier.
That followed a major writedown of $48 million incurred in 2010 on a rail construction project for BHP Billiton’s Rapid Growth Project 5, also under Bowen’s watch.
Macmahon’s market capitalisation is now below $80 million.
