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