Aveng expects to rebound from disappointing 2023 results, as operating conditions improve for the group’s infrastructure and building segments.
The JSE-listed contractor said in a statement on Monday that it expected to report profits in both earnings per share (EPS) and headline earnings per share (HEPS) for the year to end-June compared with losses of 82.4 Australian cents and 61.6c, respectively, in the previous period.
It expects an improved cash balance and a net cash position of A$173m, excluding liabilities.
The group operates across three divisions: infrastructure; building; and mining. McConnell Dowell, the group’s infrastructure segment, operates in Australia, New Zealand, the Pacific Islands and Southeast Asia. Built Environs, the building segment, covers New Zealand and parts of Australia, while the mining segment, Moolmans, operates in SA.
McConnell Dowell is expected to report improved operating earnings as the unit recoups losses associated with its underperforming BLNG project in 2023. According to Aveng, the division continues to display strong liquidity and cash flows, reflecting a strong performance of the underlying business.
Built Environs is expected to report increased revenue and improved operating earnings. This is in line with the business unit’s growth agenda and will allow it to better operate at scale and serve its three regions.
Moolmans represents a significant portion of the overall group’s current debt, and is expected to report marginal operating earnings for the period. In early 2023, Moolmans secured a R7bn, five-year contract with SA manganese miner, Tshipi e Ntle. While the contract allowed for expansion, it has also kept operating margins under pressure for the subsidiary.
Additionally, the group reported that infrastructure constraints had had a negative effect on other Moolmans clients, leading to less work in hand. To resolve this, the mining subsidiary plans to engage with existing clients on opportunities to redeploy equipment and increase volume.
All three business divisions reported reduced work in hand for the period. For McConnell Dowell, work in hand fell due to the long-term nature of larger infrastructure awards – particularly government-funded projects. For Built Environs, work in hand also fell from peak levels, though remained high enough to maintain similar revenue.
Aveng will release its annual financial results on August 20.
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