KEY POINTS
- Aveng returned to operating profit after a major loss.
- Mining earnings jumped, led by strong Gamsberg performance.
- Fraser Wyllie will become CEO on October 1.
Aveng has returned to operating profitability after a difficult financial year, as the South African-listed infrastructure and mining group works to strengthen its finances, reduce project risks and restore consistent performance across its businesses.
The company, which operates across infrastructure, construction and mining, reported revenue of A$2.3 billion (about R26.4 billion) for the financial year ended June 30, 2026. Revenue declined by 12.4% from the previous year, largely reflecting weaker infrastructure markets in Australia and New Zealand.
Despite the lower revenue, Aveng said its underlying businesses had made significant progress, with all operating segments returning to gross profitability.
The group recorded operating earnings before capital items of A$19.3 million (about R221 million), a major improvement from the A$60.4 million (R693 million) operating loss reported in the previous financial year.
The turnaround was supported mainly by strong performances from Infrastructure New Zealand and the Pacific Islands, as well as the Building business.
Infrastructure Australia and Southeast Asia, however, continued to record losses as Aveng works to complete or exit a number of problematic projects.
Group gross earnings rose to A$150.6 million (R1.7 billion), representing a gross margin of 6.5%.
Aveng’s interim CEO David Simpson said the company had made meaningful progress in stabilising the business, improving margins and reducing risks within its project portfolio. He cautioned, however, that more work was needed to restore the company’s fundamentals and deliver sustainable growth.
Cash Flow Remains a Challenge
Despite the improvement in operating earnings, Aveng’s cash position came under pressure during the year.
The group reported an operating free cash outflow of A$51.1 million (R599 million), compared with a positive inflow of A$23.2 million (R257 million) in the previous financial year.
One of the major factors behind the cash outflow was the continued cost of completing the troubled Kidston Pumped Storage Hydro project in Australia.
Aveng recognised additional costs required to complete the project during the year, with further cash outflows expected during the 2027 financial year.
The company said these costs would be funded from its existing healthy cash balances and continued cash generation from its Infrastructure and Building businesses.
Aveng said most of its underperforming projects were awarded before the company introduced stronger risk-management procedures in 2023.
These projects now account for less than 10% of group revenue, with the company gradually working them out of its portfolio.
The projects have been affected by several challenges, including inflation, supply-chain disruptions, labour shortages, geopolitical uncertainty, changing client requirements and rising project costs.
Aveng said some contracts had also been secured under arrangements that did not adequately balance project risks with available contingencies, leading to financial and cash-flow pressures.
The company has since tightened its approach to new contracts, placing greater emphasis on risk assessment before deciding whether to pursue projects.
