Aveng, which is gearing up to split into two separate entities, is upbeat about its prospects for its infrastructure and building divisions which hold a substantial amount of work in hand, citing opportunities for contract and volume extensions with existing clients in the mining division.
After suffering a severe loss owing to delays at the Batangas liquefied natural gas (BLNG) terminal project in Southeast Asia, Aveng has recovered and embarked on several internal structural changes such as changing its reporting currency from the rand to the Australian dollar to ensure the sustainable longevity of the group.
In the year to end-June, Aveng reported a return to profitability and positive cash flow creation as operating earnings rose to A$34.5m (R399m) from an A$86.8m loss. Headline earnings per share came in at A$29.6c from the previous year’s headline loss per share of A$61.6c
The JSE-listed engineering-led contractor has since outlined plans to split its business segments into two distinct and independent entities, McConnell Dowell and Aveng, which it said would make it easier for the companies to access suitable funding to meet their unique investment needs.
In the company’s latest annual report, CEO Scott Cummins said with Aveng’s leadership transition and organisational change complete — this includes shifting the management epicentre to Australia while the governance and control remain in SA — coupled with a new strategic direction that will ensure the value of its assets is fully recognised, the company was well positioned to grow in the 2025 financial year.
He highlighted that Aveng had continued to win work in its specialist disciplines, with a focus on quality infrastructure, building and mining projects which were expected to contribute positively to operating margins.
This comes as the company has also enhanced the processes for project evaluations, tender preparation and review with the introduction of a project management office.
As a result, the group entered the 2025 financial year in a strong position, with combined work in hand amounting to A$3.1bn, which is lower than the record high work in hand of A$4.2bn in June 2023. However, the CEO said the group had “strong visible opportunity pipelines” that it would pursue.
McConnell Dowell already had more than 80% of planned revenue for 2025 secured, with work in hand comprising 77% in the government sector and 23% in the private sector.
Though work in hand in the infrastructure segment reduced, reflecting the timing of larger infrastructure project awards particularly for government-funded projects, tendering activity in the second half returned to required levels in support of future revenue projections at expected margins.
Cummins said the business was well positioned to continue its growth trajectory through a strong secured revenue position with a focus on managing risks, converting opportunities, disciplined tendering, reliable project execution and delivering profit.
The building segment — which is now operating at scale in South Australia, Victoria in Australia and Auckland in New Zealand — accounted for 13% of revenue and recorded work in hand totalling A$443m.
The CEO said the Australian and New Zealand markets were still robust and government spending was keeping up with the demands of their growing populations.
“Built Environs’ operations are all operating well across their transferable skills in health, education and recreation,” said the CEO.
Moolmans, which swung back to profitability in 2024, contributed 9% of group revenue and generated operating earnings of A$2m in 2024, despite the scaling down of two projects due to power and transport infrastructure constraints in SA.
Work in hand was R5.3bn at the end of June, down from R8bn in 2023.
Cummins said Moolmans was implementing a consolidation and reset operational strategy and would launch a brand renewal to convey its brand essence and value proposition in the months ahead.
Moreover, a key factor to Moolmans’ success is ensuring that production levels on the Tshipi contract, the manganese mine in the Northern Cape, continue to improve, which aligns with the steady improvement achieved throughout the year.
Cummins said discussions were under way with existing clients to increase volumes and improve profitability during the 2025 financial year.
“There are significant opportunities for contract and volume extensions with existing clients,” said the CEO.
Closing up 4.86% at R9.70 on Friday, Aveng shares have risen more than 60% in the past six months.
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