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Infrastructure and resources group Aveng said on Tuesday it swung into a headline loss approaching its R978 million market value, following delays at a gas project in the Philippines.
The group reported a headline loss of R950 million for the year to end-June, from earnings of R308 million previously, despite its revenue from continuing operations increasing by 28% to R28.9 billion. But the group said it was pleased with a R2.4 billion in cash on hand, while its combined work in hand has jumped by two-thirds.
Once SA's biggest construction firms, Aveng's core businesses are mining contractor Moolmans and specialist contractor McConnell Dowell, the latter of which suffered a full R1.24 billion loss on its Batangas LNG Terminal Project.
The liquefied natural gas (LNG) project has been the subject of significant delays and disruption caused by the pandemic, including related supply chain disruptions and the inability to mobilise people to the requisite locations to efficiently execute work, the company said. Border closures and later supply-chain disruptions, exacerbated by the war in Ukraine, added to the pressure.
READ | Aveng slumps almost 20% after warning of hit from project delays
Aveng said on Tuesday it had reached a commercial settlement with its customer in the Philippines, while it was optimistic about a return to profitability for its business, given its work in hand had jumped more than 69% to R52.2 billion.
McConnell Dowell, whose expertise spans building, civil, electrical, pipelines, rail, tunnel and underground construction, among other things, operates in Asia and Australasia, and accounts for more 85% of the order book.
Speaking during an investor presentation, CEO Sean Flanagan said the strong pipeline "bodes well" for the 2024 financial, but also 2025 and 2026.
After the disposal of Trident Steel, the group has extinguished its legacy debt - which peaked at R3.3 billion in 2018 - and ended the period with R2.4 billion in cash on hand.
READ| Aveng lifts more than 10% after completing R1.2 billion sale of Trident Steel
Aveng's shares were unchanged in early trade on Tuesday, but have just more than halved so far in 2023.
