Drop in Aveng's revenue as transition to resources and mining progresses

By Edward West Time of article published Feb 25, 2020

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CAPE TOWN - Aveng's revenue fell to R11.2billion in the six months to December 31 from R13.4bn in the comparable period a year before due to planned non-core asset sales as the transition to become an international infrastructure, resources and mining business progressed.

Net operating profit of R14million swung around from the R484m loss reported in the comparable period a year before, driven by core business performance.

Core revenue was marginally ahead.

“We, as the management, are very happy with these results,” said chief executive Sean Flanagan in an interview.

Moolmans returned to profitability and cash positive contract mining operations, after a previously loss-making contract was turned around, following rates renegotiations, and time was spent ensuring the right equipment was on site to meet production targets, he said.

McConnell Dowell, the construction and engineering subsidiary that operates in Australia, New Zealand and Southeast Asia, maintained its profitable trend, was cash positive and grew its order book.

Of the R17.9bn core order book, 72percent was international and 28percent South Africa.

Flanagan said non-core asset disposals were moving ahead as planned and the anticipated values for the companies were being received, McConnel Dowell had reported profit in its fifth reporting period in a row, and some R450m in debt had been repaid.

Non-core asset sales saw proceeds of R222m in the interim period and some R200m of debt was repaid.

A focus on cost reduction was sustained.

“We are now in the back-end of our disposals,” a process that was expected to complete before the June year-end, Flanagan said.

The headline loss improved to R205m (1.1cents per share) from a restated loss of R703m (5.5c per share).

The loss per share improved to 0.9c per share, from a loss of 7.2c per share.

Net asset value per share decreased to 12.3c per share from 12.7c per share.

As the group transitions, its main market sectors would be contract mining in South Africa and the rest of sub-Saharan Africa, and construction in Australia, New Zealand and Southeast Asia.


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