Multiplex posts $122m loss, hit by Queen’s Wharf project costs

Multiplex executives Daniel Murphy and Michael Guilday with Sydney Fish Market boss Greg Dyer during a tour of the new Sydney Fish Markets in Glebe. Pictures: Justin Lloyd, Joe Castro/ AAP

Multiplex has posted a $122.4m loss for 2024, as cost blowouts on a major project, believed to be Star’s Queen’s Wharf entertainment precinct in Brisbane, took its toll.

However, despite plunging deeply into the red, compared to the $38.8m of total comprehensive income booked in the prior year, auditors have signed off the accounts for the Australian construction heavyweight to be fit to operate as a going concern, saying it has “adequate resources to continue in operational existence for the foreseeable future”.

This is despite industry fears that the exposure Multiplex has had to the building of the $3.6bn Queen’s Wharf entertainment complex in Brisbane for cash-strapped Star Entertainment and its foreign backers would severely impact the company.

The project suffered from cost blowouts on Queen’s Wharf, and the Sydney Fish Markets project for which Multiplex is involved has faced headwinds.

The accounts for Multiplex Pty Ltd lodged with the financial regulator ASIC said the loss was primarily due to a single-large project that was completed during the year.

“The project was completed during a period of significant industry-wide challenges, including the impact of Covid-19, high inflation and unprecedented wet weather.”

Multiplex generated $4m of revenue last year, but the cost of operations was also $4m, and that compared to $2.9m in 2023, which was also the same amount as revenue.

For 2024, the $7.3m of gross profit was offset by $64.5m in other expenses and $190.8m of changes in fair value.

It had $241.2m of cash, $355m of trade and other receivables, $1.4m in related party receivables and its net assets were almost $1.7m.

It had almost $149m in provisions, and $829.1m of bank guarantees and insurance bonds classified as total contingent liabilities, while its wok in progress is $10.3m about quarter of the level it was in 2023 at $38.1m.

However, Multiplex, which employs close to 3000 workers, is still faring better than most in what has been a tough market, with peers such as Roberts and Co placing its Victoria operation into administration through McGrath Nicol after inheriting the unit from the failed Probuild.

Andrew Roberts, whose father John founded Multiplex, has now sold the business to Arada for a nominal sum, as The Australian reported.

In recent years, Daniel Grollo’s Victorian construction empire Grocon folded and Chinese-owned Australian construction firm John Holland reported a $60m loss last year in tough contracting markets in which groups have been caught out from fixed-price projects.

The subcontracting industry is also feeling the impacts of a tough market.

Brookfield is understood to hold Multiplex in its listed vehicle Brookfield Business Partners and does not have debt.

But while suitors had earlier circled the company, when it was up for sale through Morgan Stanley, industry sources say long-dated liabilities are now believed to be a deterrent for buyers.

The situation is unfolding as Brookfield is also wrestling with its cash-strapped hospital operator Healthscope, which it has placed up for sale after sources said the firm’s North American top brass had accepted there was no equity left in the business.

Brookfield is also selling retirement village operator and financial group La Trobe with the hope of reaping a combined $6bn at least.

The North American private equity firm bought best-in-class builder Multiplex at the peak of the market in 2007 for $4.2bn, and its desire was always to extract the property component from the business, with the construction arm non-core.

A name change from Brookfield Multiplex back to Multiplex was read as a signal that the private equity firm had been keen to distance itself from the business, as was its move to shift it into an entity that holds its private equity assets.

Multiplex was founded in Perth in 1962 and was listed as a public company in 2003, raising $1.2bn.

It specialises in high-rise buildings, stadiums, high-end residential projects and mixed-use, education, health and civil infrastructure developments.