AVENG LIMITED 2023
Summarised consolidated annual financial statements
for the year ended 30 June 2023
Providing a better life
Salient features - operating group analysis
Group revenue
R32,9 billion
2022 | R26,2 billion
Net cash excluding IFRS 16
R1,4 billion
2022 | R2,1 billion
Headline loss
R950 million
2022 | R308 million headline earnings at 30 June 2022
Work in hand
R52,2 billion
2022 | R30,8 billion
Operating loss of
R856 million
2022 | R576 million earnings for the period ended 30 June 2022
Total comprehensive loss
R580 million
2022 | R237 million earnings
External South African legacy debt settled
2022 | R478 million
Salient features - operating group analysis
for the year ended 30 June 2023
Operating (loss) / earnings - operating group
FY23 | FY22 | Change | |
Rm | Rm | % | |
McConnell Dowell | (815) | 385 | (>100) |
Moolmans | (110) | 207 | (>100) |
Aveng Construction: South Africa | (59) | (67) | 12 |
Trident Steel | 204 | 220 | (7) |
Aveng Manufacturing | - | (5) | >100 |
Other | (76) | (164) | 54 |
Operating (loss) / earnings | (856) | 576 | (>100) |
Revenue per operating group | Work in hand per operating group | |
June 2023 | June 2023 | |
R32,9 billion | R52,2 billion | |
11% | 15% | |
<1% | ||
9% | ||
<1% | ||
79% | ||
85% | ||
● McConnell Dowell | ● MOOLMANS | ● McConnell Dowell |
● Aveng Construction | ● Aveng manufacturing | ● MOOLMANS |
South Africa | ● Trident Steel | |
June 2022 | June 2022 | |
R26,2 billion | R30,8 billion | |
14% | 10% | |
<1% | ||
10% | ||
<1% | ||
75% | ||
90% | ||
● McConnell Dowell | ● MOOLMANS | ● McConnell Dowell |
● Aveng Construction | ● Aveng manufacturing | ● MOOLMANS |
South Africa | ● Trident Steel |
Aveng Group Summarised consolidated annual financialal statements 2023 | 1 |
Commentary
RESULTS
FOR THE YEAR ENDED 30 JUNE 2023
AVENG LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1944/018119/06) ISIN: ZAE000302618
SHARE CODE: AEG (Aveng, the Company or the Group)
Salient features
- Revenue1 of R28,9 billion (2022: R22,5 billion*)
- Operating loss1 of R1 060 million (2022: R360 million earnings*)
- Operating earnings1 of R183 million (2022: R360 million earnings) (excluding BLNG project operating loss)
- Loss for the year of R1 283 million (2022: R130 million earnings)
- Loss per share of 1 017 cents per share (2022: 106 cents earnings per share)
- Headline loss of R950 million (2022: R308 million earnings)
OVERVIEW
The financial year has been a year of transition, characterised by a normalisation of operating activities as we emerged from the global COVID-19 pandemic, rapid growth of McConnell Dowell as revenue, work in hand and people numbers grew, the awarding of new contracts at Moolmans and the related investment in, delivery and commissioning of heavy mining equipment. Both McConnell Dowell and Moolmans invested in systems in the areas of new business and human capital management. The Group continued its journey to develop both enterprise risk management and ESG frameworks. The sale of Trident Steel and settlement of the legacy term debt brought the 2018 restructuring strategy to a conclusion.
New financing facilities were arranged in support of the investment in new equipment and the partial funding of a project guarantee following its encashment, together with new
general banking facilities for South African operations. These activities provide the foundation for a focused business and balance sheet as we build for the future.
Aveng grew its continuing operations revenue by 28% in the current year but delivered a disappointing operational performance. The Group incurred a significant operating loss following substantial losses in the Southeast Asia business unit of McConnell Dowell, primarily from the Batangas LNG terminal project. Both McConnell Dowell and the Group reported operating losses as a result. An operational underperformance at Moolmans further contributed to
the operating loss. Following the disappointing results in McConnell Dowell, the Group conducted a review of the BLNG project and a broader portfolio of current projects.
This has led to the design and implementation of improved operational standards and governance procedures for tenders and projects at McConnell Dowell.
2 | Aveng Group Summarised consolidated annual financial statements 2023 |
- Headline loss per share of 753 cents (2022: 252 cents earnings per share)
- Cash on hand of R2,4 billion (June 2022: R2,6 billion)
- Net cash position excluding IFRS 16 of R1,4 billion (June 2022: R2,1 billion)
- Increase in work in hand to R52,2 billion from R30,8 billion in June 2022
- Net asset value per share of 2 043 cents per share (2022: 2 873 cents per share)
- Re-represented.The Group is required to re-present the results of Trident Steel, previously presented in continuing operations, to discontinued operations for all periods presented.
1 Continuing operations
LEVERS FOR GROWTH
Stronger balance sheet
Aveng has delivered on its strategy announced in February 2018 to simplify its business, de-risk its balance sheet and reduce its debt. The strategy required Aveng to dispose of non-core assets and repay its debt to allow the Group to focus on the core assets of McConnell Dowell and Moolmans.
Concluding the implementation of the Trident Steel disposal transaction, enabled Aveng to continue its journey to a sustainable capital structure by fully extinguishing its South African legacy debt of R478 million and short-term Trade Finance Facility of R450 million. The settlement of South African legacy debt, which at its height amounted to R3,3 billion in 2018, marked a pivotal moment in ensuring a sustainable capital structure and a platform for growth for Aveng.
With Trident Steel being a working capital-intensive business, the disposal allowed Aveng to further de-risk its balance sheet by terminating over R500 million in ancillary trade finance facilities, including foreign exchange, promissory notes and letter of credit facilities.
The company continued to de-risk the balance sheet through the reduction of the South African guarantee exposure from R3,8 billion in 2018 to R82 million at 30 June 2023. In addition, the Group continues to settle major litigation, historical claims and contingent liabilities.
Subsequent to year end, the financial institutions that have an interest in the Common Terms Agreement, have reduced from six to two parties. The Group has entered into new banking facilities with The Standard Bank of South Africa Limited and the existing Common Terms Agreement will be amended and restated to reflect these changes.
Aveng Group Summarised consolidated annual financial statements 2023 | 3 |
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Disclaimer
Aveng Ltd. published this content on 22 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 August 2023 05:19:05 UTC.
