Infrastructure, building and mining group Aveng signalled a full-year loss for the year to end-June, primarily driven by setbacks in key infrastructure projects and ongoing operational pressures.
In a trading statement released on Monday, the group said it expected to swing into a headline loss per share after the previous year’s headline earnings per share of 29.6 Australian cents. The company said the downturn could largely be attributed to cost overruns and delays on the Kidston Pumped Hydro project in Queensland, Australia, and the Jurong Regional Line project in Singapore.
The Kidston project, a major part of Aveng’s Australian operations, continued to face challenges in the second half of the year. Severe flooding caused by a persistent tropical low-pressure system extended the project timeline by several months and increased the estimated cost to complete, resulting in further losses for the Australia business unit, the company said.
Other Queensland projects were also affected by the adverse weather, leading to commercial claims, hitting overall profitability.
Despite these challenges, Aveng’s New Zealand and Pacific Islands business unit continued to perform strongly, with profitability expected to continue. The company’s building segment, branded Built Environs, is also expected to continue its profitable performance and report growth in operating earnings.
In the mining segment, the company said its Moolmans business secured a new five-year contract at the Gamsberg zinc mine in SA. However, the group is closely managing contract performance at the Tshipi project.
The company said negotiations for the sale of the Moolmans mining business were ongoing, with a focus on buyers with strong BEE credentials. The group is also exploring options for the separation of its infrastructure arm, McConnell Dowell, including a merger, sale or independent listing.
Looking ahead, the company said it expects improving trading conditions across its infrastructure and building segments, though it cautioned that global geopolitical tension and protectionist trade policies continued to create uncertainty.
By market close the company’s share price was 2.31% at R6.35. Earlier, it was down as much as 6.8%.
Aveng is expected to release its reviewed results for the year on or about August 19.
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