South Africa company Aveng posts sharp annual loss amid weak infrastructure markets
Aveng swings to annual loss as infrastructure markets soften
JSE-listed engineering and construction group Aveng recorded a substantial annual loss, largely due to setbacks in two pre-Covid legacy projects. The company’s shares plunged by over 18% following the Monday afternoon results announcement, though they recovered slightly to R5.15 in early Tuesday trading.
For the financial year ending 30 June 2025, Aveng posted a headline loss of A$84.6 million (R975 million), a sharp reversal from the prior year’s A$38 million (R466 million) profit. Headline loss per share stood at 64.6 Australian cents, down from earnings of 29.6 cents a year earlier.
Revenue Declines as Infrastructure Markets Cool
Group revenue fell 13.9% to A$2.6 billion (R31 billion) from A$3.1 billion (R37.5 billion) amid softening infrastructure activity in Australia and New Zealand. Operating losses before capital items reached A$60.4 million (R693 million), compared with prior-year operating profits of A$34.5 million (R424 million).
Legacy Projects Weigh Heavily on Earnings
CEO Scott Cummins attributed the losses to two challenging projects: the Jurong Region Line (J108) in Singapore and the Kidston Pumped Storage Hydro scheme in Queensland, which together contributed A$98.5 million in additional costs. Cummins noted the cash impact will largely unfold over the next 12 months as both projects near completion.
He emphasised that the remainder of Aveng’s portfolio remains profitable, with building operations under the Built Environs brand achieving higher margins and steady cash generation.
Segment Performance Overview
- Infrastructure Division: Revenue dropped to A$1.9 billion from A$2.4 billion. Losses from Kidston and J108 offset gains in other Australian and New Zealand projects. Queensland weather disruptions and certain contract design challenges also weighed on results. The J108 project alone recorded a segment loss of A$63 million, compared with a loss of A$6 million the previous year.
- Building Division (Built Environs): Revenue rose to A$491 million (R5.6 billion), with operating earnings increasing to A$17 million (R194.5 million), up from A$8.6 million in 2024.
- Mining Contractor (Moolmans): Revenue slipped nearly 10% to R3 billion (A$252.6 million), while earnings tumbled to R1.8 million (A$0.2 million) from R24 million (A$2.0 million) due to contractual disputes and operational inefficiencies. A new R10.6 billion (A$911 million) Gamsberg contract with Black Mountain Mining is expected to bolster volumes and profitability in the coming months.
Outlook and Strategic Focus
Despite the loss, Aveng ended the year with a healthier cash position of A$267.3 million (R3.1 billion), up from A$227.7 million (R2.8 billion) in 2024. The group is prioritising completion of the Kidston and J108 projects, improving broader portfolio performance, and advancing a separation strategy to split Aveng into two independent entities. Cummins indicated that detailed implementation options will be presented to the board within the next 12 months.
