Infrastructure, resources and mining group Aveng says its Australasia-based subsidiary, McConnell Dowell, has successfully secured A$1.4bn (R16bn) of new work which it says will secure 98% of revenue for the 2023 financial year.
McConnell Dowell, which specialises in rail, marine and other infrastructure construction in Australia, New Zealand, South East Asia and the Middle East and brings in two-thirds of Aveng’s revenue, increased its work in hand by 39% to A$3.5bn by the end of September.
“The Australian business unit accounted for the majority of the tender wins,” Aveng said in a statement.
“The new work spans the company’s diverse specialist capabilities and disciplines with 52% being in design and construct, 34% alliance and 14% construct only,” the group said, adding that “the new work brings the secured revenue for FY23 to 98%”.
Aveng said global inflationary pressures continued to be a factor in developing new tender submissions and in managing new and existing contracts. However, its management teams were applying a series of mitigating strategies to manage the effect, including escalation clauses.
CEO Sean Flanagan has previously highlighted that though the pipeline of work in SA, which contributes about 13% to revenue, was smaller than that in Australasia, it was still quite “substantial”, with the company’s sights set on a total value of R55bn in projects.
Aveng, which has since 2018 been on a bid to restructure and dispose of its noncore assets including Aveng Manufacturing and Trident Steel, finally entered into a sale agreement to dispose of the latter for R700m in early October.
Aveng said this would allow it to focus on core businesses including Moolmans, its mining arm which provides services from open-cut mining to shaft sinking and underground mining.
The Johannesburg-based group recently reported that it is making headway with its debt reduction and balance sheet derisking strategy, announcing that it had reduced its debt by a further R75m in three months to the end of September 2022 from R481m to R406m.
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