Aveng returns to profitability

Infrastructure and mining services group Aveng on Monday said it has returned to profitability in the six months to end-December, reporting double-digit growth in revenue, earnings from continuing operations and headline earnings.

Aveng, which has undertaken to use the Australian dollar as its reporting currency, said it grew its revenue from continuing operations, which excludes Trident Steel, by 39% to A$1.5bn (R18bn) from A$1.1bn (R12.8bn) in the prior comparative period.

Headline earnings per share (HEPS), a common profit measure in SA that excludes certain items, came in at A$8.8c or 106c in rand, up from A$5.2c or 61c in 2022, the group said.

“Aveng has shown resilience in returning to profitability and positive cash generation in the first half of the 2024 financial year and remains well positioned and equipped to continue with sustainable, profitable growth,” the group said in a statement.

“The group entered the second half of the 2024 financial year in a strong position.”

The group highlighted its combined work in hand tallied A$3.6m (R44.5m), which supports 100% of the 2024 full-year revenue and more than 60% of 2025 revenue.

Aveng attributed the improvement to the strong performance of McConnell Dowell in the first half of the 2024 financial year.

Aveng said McConnell Dowell operated 74% of its projects at or above bid margins, “illustrating strong operational performance across most of its portfolio”.

The Johannesburg-based group said its future focus would be on improving this performance to mitigate the project risks on specific projects and maximise opportunity.

The company has over the past 18 months transitioned through its restructuring to a smaller, focused and more sustainably profitable, engineering-led, infrastructure, building and mining contractor.

As part of the shake-up, CEO Sean Flanagan will step down with effect from March 1, to be replaced by Scott Cummins, the current CEO of McConnell Dowell. The group said Flanagan will remain on the board as a non-executive director.

The group told investors that while its management epicentre shifts to Australia, the governance and control remains in SA, with the group retaining its listing on the JSE.

“Our objective is to achieve a focused management and governance structure, allowing greater efficiency and effectiveness,” Aveng said. “Over time, this shift will enhance access to diverse capital markets.”

Aveng shares closed 6.06% lower at R7.28 on Monday.

gumedemi@businesslive.co.za