SALE OF AVENG’S NONCORE BUSINESSES TO BE COMPLETED IN CURRENT FINANCIAL YEAR

Global infrastructure and resources group Aveng’s Australian subsidiary McConnell Dowell continues to trade profitably and in line with expectations, and has met its budget for the first quarter of the financial year, Aveng reported on Wednesday.

The announcement follows as Aveng noted that McConnell Dowell had been awarded new orders valued at A$535-million since June 30.

With these awards, McConnell Dowell’s two-year order book now stands at A$1.4-billion, marking a 26% increase on the order book since June.

McConnell Dowell has now secured 90% of the budgeted revenue for the current financial year, with the awards meaning that good progress has been made towards securing orders to meet beyond the budgeted revenue beyond the current financial year, Aveng reported.

Additionally, McConnell Dowell has more than A$1-billion worth of projects in preferred status.

Aveng further reported that the markets in which McConnell Dowell operates “remains supportive of the medium-term growth objectives”, adding that the subsidiary’s management will “continue to exercise discipline” in terms of selecting opportunities on which to tender.

On local grounds, meanwhile, Aveng subsidiary surface mining contractor Moolmans has been able to secure a further contract extension at the Nkomati mine since June 30.

As a result, only 92% of the 2020 financial year’s budgeted revenues have been secured.

Aveng on Wednesday said the renegotiation of certain contracts together with the other aspects of the group-led intervention, as outlined in the yearly results announcement in August, were yielding positive results.

According to Aveng, the business returned to profit during the first quarter of its current financial year and had met budget expectations, which “provides a strong underpin to the expected return to profit for the full financial year”.

Moolmans’ management continues to focus on further improving operational performance and pursuing selected new opportunities to meet its budgeted performance in the 2021 and 2022 financial years.

Further, Aveng said it expected to have finalised the disposal of all noncore businesses during the course of the current financial year.

Discussions with potential buyers for the remaining noncore businesses of Aveng Trident Steel and Aveng ACS were continuing, while, subsequent to Wednesday’s announcement, the Competition Commission had granted the approval for the sale of the Grinaker-LTA Building and Civil Engineering business. http://www.engineeringnews.co.za/article/sale-of-avengs-noncore-businesses-to-be-completed-in-current-financial-year-2019-11-06/rep_id:4136