Aveng, a South African-listed engineering company, has reported a significant annual loss, mainly due to problems with two legacy projects. Its share price fell sharply after the results were announced but recovered slightly the next day. The company’s revenue dropped nearly 14%, influenced by a slowdown in infrastructure markets in Australia and New Zealand.
The group’s headline loss for the year ending June 2025 was A$84.6 million, a big change from a profit of A$38 million the previous year. Revenue also fell to A$2.6 billion from A$3.1 billion. The company made an operating loss of A$60.4 million, compared to a profit earlier. The main reason for the loss was the extra costs from two troubled projects: the Jurong Region Line in Singapore and the Kidston Pumped Storage Hydro scheme in Australia. These projects added nearly A$100 million in costs, with most of the cash flow impact expected over the next year.
Despite this, the CEO said most of Aveng’s projects are still profitable and generate cash. The infrastructure division’s revenue fell from A$2.4 billion to A$1.9 billion, with the losses from the two problematic projects offsetting improvements in other areas. Extreme weather and design issues also weighed on performance in Queensland, Australia.
In contrast, the building division showed strength, with higher revenue and improved operating earnings. Meanwhile, the mining contractor, Moolmans, experienced a weaker year, with revenue falling by almost 10%, and earnings dropping sharply due to contractual disputes and operational issues. However, a new large contract worth R10.6 billion at Gamsberg is expected to improve future profitability by increasing volumes and productivity.
Although the company’s earnings were disappointing, Aveng ended the year with a stronger cash balance, now A$267.3 million. The CEO highlighted that their immediate focus is on completing the troubled projects, improving overall performance, and exploring a plan to split the company into two separate businesses. Management is working on options and plans to present these to the board in the coming year.