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JSE-listed construction group Aveng reported a dip in revenue as infrastructure markets in Australia and New Zealand softened, with the group still carrying the costs of loss-making projects even as performance across its core businesses improved.The improvement came after Aveng returned to gross profitability across all its operating segments, though its Australian and Southeast Asian infrastructure businesses remained under pressure as the group worked through loss-making projects, the company said in its results for the year to June.Revenue fell 12.4% to A$2.3bn (R26.4bn), while headline loss per share narrowed sharply to 3 Australian cents.The group swung back to operating earnings of A$19.3m, from a A$60.4m loss a year earlier. (Dorothy Kgosi) “The improvement reflects the return to gross profitability across all operating segments,” Aveng said.The stronger performance was supported by its New Zealand & Pacific Islands infrastructure business and building segment.The New Zealand & Pacific Islands business exceeded its operational targets, with stronger earnings and work in hand rising to A$981m from A$169m a year earlier. New awards in civil, transport, water and wastewater projects strengthened its outlook.Aveng’s commercial building business, Built Environs, continued to deliver profitable growth after completing several major projects. The group said the business, which has historically been smaller and generated lower margins, was becoming a more consistent source of earnings.Its growth is being backed by an expansion into Queensland and a focus on education, healthcare and life sciences, and recreation projects.The mining business, Moolmans, recorded a stronger performance, supported by the ramp-up of the Gamsberg project.Gamsberg continued to perform in line with expectations, with production increasing as additional fleet capacity was brought to the site. Production is expected to reach peak contracted requirements during this calendar year.However, Tshipi remained under pressure, with restrictive mining conditions affecting production and creating inefficiencies. Moolmans is working with the client to resolve claims linked to the mine plan, haul profiles, power failures and weather.The gains from the stronger businesses were partly offset by Aveng’s troubled infrastructure projects.Its Australian infrastructure business remained loss-making, with the Kidston Pumped Storage Hydro project continuing to add costs. Major works at the powerhouse have been completed, with mechanical and electrical installations under way and commissioning expected in 2027.Aveng said the cash flow impact would continue into the 2027 financial year as the project moves towards completion.Southeast Asia also remained loss-making. Aveng has stopped tendering for new work in the region and is focusing on completing its four remaining projects before winding down the operation.The pressure was also evident in Aveng’s cash position. Cash on hand fell to A$225.3m.Despite this, the group entered the new financial year with A$3.1bn of work in hand, only slightly below the previous year. Infrastructure work in hand increased to A$1.7bn from A$1.2bn, supported by growth in water and wastewater, ports and coastal work in Australia, as well as civil and transport projects in New Zealand and the Pacific Islands.The group is also making progress in dealing with its South African legacy operations. Historical project provisions have fallen substantially since 2021 while outstanding guarantees are being unwound.“The group continues to make substantial progress in resolving historical matters and winding down noncore activities while meeting its statutory, legal, technical and human resources obligations, with a primary focus on Aveng Africa,” it said. Business Day
