Wrap Text
Reviewed interim condensed consolidated financial statements for the six months ended 31 December 2025
Aveng Group Limited
Incorporated in the Republic of South Africa
(Registration number: 1944/018119/06)
ISIN: ZAE000302618
SHARE CODE: AEG
("Aveng" or "the Company" or "the Group")
REVIEWED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025
SALIENT FEATURES
• Revenue of A$1.2 billion (R14.2 billion) | 31 December 2024: A$1.4 billion (R16.6 billion)
• Operating earnings before capital items of A$9.4 million (R107 million) | 31 December 2024: loss
of A$31.0 million (R356 million)
• Headline earnings of A$0.3 million (R4 million) | 31 December 2024: loss of A$34.4 million (R399
million)
• Headline earnings per share of A$0.2 cents (3 cents (Rands)) | 31 December 2024: loss of A$26.7
cents (309 cents (Rands))
• Basic loss of A$1.5 million (R17 million) | 31 December 2024: loss of A$32.7 million (R378 million)
• Basic loss per share A$1.2 cents (13 cents (Rands)) | 31 December 2024: loss per share of A$25.4
cents (293 cents loss (Rands))
• Work in hand of A$3.5 billion (R38.6 billion) | 30 June 2025: A$3.2 billion (R37.5 billion)
• Cash on hand of A$308.8 million (R3.4 billion) | 30 June 2025: A$267.3 million (R3.1 billion)
• Net cash of A$250.1 million (R2.8 billion) | 30 June 2025: A$211.4 million (R2.5 billion)
RESULTS FOR THE SIX MONTHS PERIOD ENDED 31 DECEMBER 2025
Aveng's revenue of A$1.2 billion (R14.2 billion) for the six months period ended 31 December 2025
("H1 2026"); (December 2024 ("H1 2025"): A$1.4 billion (R16.6 billion)) is lower by 10.8%, following an
expected softening of infrastructure markets in Australia and New Zealand.
The Group's gross earnings of A$69.4 million (R791 million) in H1 2026 (H1 2025: A$38.3 million), at
a gross margin of 5.6% (H1 2025: 2.7%), reflect the return to a gross profitability of all segments across
the Group. The gross earnings include losses of A$20.2 million (H1 2025: A$76.7 million) from the
Jurong Region Line (J108) project in the Infrastructure Southeast Asia business unit, and the Kidston
Pumped Storage Hydro (Kidston) project in the Infrastructure Australia business unit.
Whilst additional forecast costs to complete have been recognised in the current period, the cash flow
impact will largely materialise in H2 2026 and into FY 2027 as these projects move towards completion.
The healthy cash balance in the Infrastructure and Building segments, supported by ongoing profitability
and continued strong cash generation across the portfolio of projects, will fund the expected outflow
from these projects.
The Group's return to modest operating earnings before capital items of A$9.4 million (R107 million)
(H1 2025: A$31.0 million (R356 million) loss) has been bolstered by continued excellent delivery in the
Infrastructure New Zealand & Pacific Islands business unit and Building segment, with the Infrastructure
Australia business unit returning to a modest operating profit. Conversely, the Infrastructure Southeast
Asia business unit recorded an operating loss for the period, which includes a further loss on the J108
project and an additional provision for warranty issues on a separate completed project. The J108
project has been de-risked through achievement of basic structural completion, including handing over
the last of three stations in December 2025. Advanced negotiations continued with the client for a
commercial settlement. Through these negotiations, costs to complete were reevaluated and a further
loss was recognised in the period. The Mining segment achieved a break-even position. The Gamsberg
project continues to perform well through continued solid project execution, however inefficiencies on
the Tshipi project continue to persist where planned volumes and profitability have not been achieved
and unresolved, ongoing contractual claims negatively impact the performance. These claims have not
been recognised in revenue. Renewed efforts have been made to seek a commercial settlement with
the client. However, the Tshipi project is not sustainable and management are considering all available
options for this contract.
On the back of higher reported earnings, the Group continued to deliver a strong operating free cash
inflow of A$40.7 million (R444 million) (H1 2025: A$16.1 million inflow (R177 million)).
The Group closed with a higher cash balance of A$308.8 million (R3.4 billion) (June 2025: A$267.3
million (R3.1 billion)) and an improved net cash position of A$250.1 million (R2.8 billion) (June 2025:
A$211.4 million (R2.5 billion), principally driven by an increase in the Australian liquidity pool balances
in the period. A$83.1 million (R920 million) (June 2025: A$59.9 million (R698 million)) is held in joint
arrangements within McConnell Dowell. The Group's debt predominantly comprises asset-backed
finance associated with property, plant and equipment in the Mining and Infrastructure segments.
The Group enters the second half of the 2026 financial year with combined work in hand amounting to
A$3.5 billion (R38.6 billion), up from A$3.2 billion (R37.5 billion) in June 2025. Work in hand in the
Infrastructure segment has grown in the period to A$1.8 billion (June 2025: A$1.2 billion), reflecting
growth in the water & wastewater and ports & coastal sectors in Australia and civil and transport sectors
in New Zealand and the Pacific Islands.
Work in hand in the Building segment has softened, as expected, from its record high of A$864 million
at June 2025 to A$663 million at December 2025, with work in hand well distributed across the South
Australia, Victoria and New Zealand markets.
Work in hand in the Mining segment has decreased to R11.6 billion (A$1.0 billion) from R13.4 billion
(A$1.1 billion) in June 2025. The focus remains on delivering existing contracts profitably before seeking
further extensions or new contracts.
KEY FOCUS AREAS
McConnell Dowell, Built Environs and Moolmans are fundamentally sound businesses with strong
engineering and delivery capability, focusing on delivering in our key markets. Our commitment to
ensuring the success of our three businesses remains unwavering and in line with the objective of
ensuring a sustainable future for each.
The Australia and Southeast Asia business units have previously reported on underperformance
associated with certain projects awarded prior to the introduction of our risk management processes
in 2023, being the period prior to. Almost all these projects have been managed to a satisfactory
outcome and, whilst not contributing earnings to the Group, they represent less than 10% of revenue
as these projects are steadily being worked out of the portfolio.
Management has taken significant steps to stabilise the business and improve gross margin
performance with a focus on creating a stable platform for the future. A sustained de-risking across
the portfolio of projects, evidenced by improved project contingencies, provisioning, a corresponding
decrease in identified risk and a sustainable reduction in uncertified revenue on key projects has taken
place over the period. These actions create a more balanced portfolio, which continues to perform
well at higher average operating margins.
A continued focus of management is on refining the risk appetite and strengthening the risk
management framework, with an enhanced focus on the risk assessment process at tender phase.
Greater scrutiny has been placed on the "Pursue / No Pursue" decision to ensure that projects being
entered into fit the risk profile of the Group.
Initiatives to strengthen the project management office are well progressed. The function has renewed
its focus on implementation of the revised risk management processes, with improvements in tools
used in the identification, tendering and delivery of projects.
Further to this, David Simpson has been appointed as interim chief executive officer with the focus
on commercial resolution, and delivery of the underperforming projects.
STRATEGY UPDATE
Aveng remains committed to its strategy of maximising value to shareholders through improved
operational performance.
McConnell Dowell (incl. Built Environs)
During the period, the Aveng board thoroughly investigated a range of options for the separation
of McConnell Dowell and concluded that the best route to obtaining value for shareholders at this
juncture is for Aveng to retain its ownership of McConnell Dowell.
The focus at McConnell Dowell remains to deliver consistent operating performance through
enhanced risk management processes, resolve existing commercial matters and grow the work
in hand within selected disciplines and within an appropriate risk profile. This will require a longer
time horizon than was previously anticipated.
Moolmans
Pieter van Greunen has been appointed as managing director with the mandate to improve
operational performance on both contracts and bring resolution to the Tshipi contract. The Tshipi
contract is not sustainable in its current format and management are considering all options to
bring this to resolution. Renewed efforts have been made to seek a commercial settlement whilst
the formal claims processes continue.
Ongoing commercial disputes on the Tshipi contract have negatively impacted our ability to conclude a
disposal transaction. As a result, negotiations have been terminated
OPERATIONAL UPDATE
Aveng delivers its projects through three strong operating brands, which make up three distinct
segments. The Infrastructure segment, branded McConnell Dowell, operates in three geographical
regions – Australia, New Zealand & Pacific Islands and Southeast Asia; the Building segment, branded
Built Environs, operates in New Zealand and the states of Victoria and South Australia, and the Mining
segment, branded Moolmans, operates in South Africa.
Infrastructure
For the six months period ended 31 December 2025, the Infrastructure segment recorded revenue of
A$802.6 million (H1 2025: A$1.1 billion), attributable to revenue in its New Zealand & Pacific Islands,
Australia and Southeast Asia business units. The business continues to focus on specialised projects in
Australia, New Zealand & Pacific Islands and Southeast Asia, offering engineering and infrastructure
solutions in the transport, ports & coastal, water & wastewater, energy and resources sectors.
The New Zealand & Pacific Islands business unit delivers consistently strong performance, with
revenue of A$170.5 million (H1 2025: A$157 million) and has reported an operating earnings of A$12.6
million (H1 2025: A$13.4 million). Work in hand grew considerably in the period to A$825 million (June
2025: A$169 million). New project awards included projects in the civil and transport sectors in New
Zealand, Tonga, Samoa, Cook Islands and Papua New Guinea. Projects amounting to an additional
A$474 million are in preferred status.
The Australia business unit's revenue decreased by 37.2% in the period to A$560 million (H1 2025:
A$892 million). Despite improved margins across the portfolio of projects, the business unit reported
earnings of A$1.1 million in the period (H1 2025: breakeven) as it continues to deal with problematic
client-specified technical design issues on a project in Queensland and continued pressure on the
Kidston Pumped Hydro project, where, despite the complex nature of the work and the need to
resequence major work activity as instructed by the client, the project achieved the required
productivity on site for the six-months period, in accordance with plan. During the period, the cost and
program to complete were reevaluated, necessitating a recognition of a further loss. Further to this,
the client directed project personnel to demobilise, resulting in a five-week suspension of works,
followed by a further week of disruption during remobilisation. The project recommenced after the
client implemented corrective interventions at the camp. As a result of these events, the program of
works remains intact, however the program to completion has been extended. Cash outflow will be
realised through H2 2026 and into FY 2027, funded by existing cash balances.
Work in hand has remained relatively stable at A$760 million (June 2025: A$780 million), with new
projects to the value of A$404 million awarded in the period and a further A$131 million of variations
to existing projects. A further A$667 million of projects are in preferred status in McConnell Dowell's
targeted sectors.
In the Southeast Asia business unit, the J108 project has been de-risked through achievement of
basic structural completion, including handing over the last of three stations in December 2025.
Advanced negotiations continued with the client for a commercial settlement. Through these
negotiations, costs to complete were reevaluated and a further loss was recognised in the period. The
project has now moved into its next phase and management hope to conclude a commercial
settlement with the client in the near term. In addition, a provision was taken to address a recently
identified warranty issue on a separate completed project. As a result, the Southeast Asia business
unit will report a loss for the period of A$18.5 million (H1 2025: A$40.3 million loss). The focus remains
on delivering the current contracts in the region.
The Infrastructure segment recorded a lost-time injury frequency rate of 0.20 against a target of less
than 0.35 and a total recordable injury frequency rate of 2.73 against a target of less than 3.00.
Building
Aveng's commercial building business unit, Built Environs, continued its profitable performance in the
period and has reported higher comparable revenue of A$302 million (H1 2025: A$203 million) with
improved operating earnings of A$24.3 million (H1 2025: A$9.2 million) due to excellent project
execution following the conclusion of several significant key projects, that will not repeat in H2 2026.
Work in hand of A$664 million (June 2025: A$864 million), which is primarily spread across the Victoria
and South Australia markets, with lower volumes of work in hand in the New Zealand market, remains
at comfortable levels to deliver similar revenue going forward. The improved operating performance
and growth in order book reflects a disciplined approach to operational delivery and a focus on its
targeted market sectors of education, healthcare / life sciences and recreation.
The Building segment recorded a lost-time injury frequency rate of 0.00 against a target of less than
0.46 and a total recordable injury frequency rate of 4.47 against a target of less than 6.90.
Mining
Moolmans grew its revenue by 17.5% to R1.7 billion (A$148.3 million) for the six months period ended
31 December 2025 (H1 2025: R1.4 billion (A$126.2 million)) following the award of a new 60-month
contract at Gamsberg in the second half of FY2025. The business unit reported disappointing
operating earnings of R3 million (A$0.2 million) for H1 2026 (H1 2025: R15 million (A$1.4 million)).
The Gamsberg project continues to mature, with steadily increasing volumes and a clear pathway to
achieve and exceed contractual volumes in the near term. Sustainable margins have been achieved,
with further opportunities linked to volume growth.
The subdued operating earnings follow the recognition of losses on the Tshipi contract, where
hampered production continues as a result of the impact of restrictive mining conditions due to Tshipi's
mine planning. This results in inefficiencies and sub-optimal production. Moolmans has been unable
to resolve the restrictive mining claims, together with other claims relating to regression (haul profiles),
power failures and weather. The claims by Moolmans exceed R390 million and have necessitated
formal dispute resolution processes that are underway. Moolmans has not recognised any additional
revenues associated with these claims. Renewed efforts have been made to seek a commercial
settlement whilst the litigation process continues. The ongoing commercial disputes have negatively
impacted our ability to conclude a disposal transaction.
The capital program remains well managed with the business unit taking delivery of and
commissioning new equipment to the Gamsberg site. The capital is funded through project cashflows.
Furthermore, the equipment renewal program, in conjunction with the original equipment manufacturer
remains on track and on budget with the initial six trucks rebuilt and commissioned to the Gamsberg
project.
The Mining segment recorded a lost-time injury frequency rate of 2.11 against a target of less than
0.95 and total recordable injury frequency rate of 3.61 against a target of less than 3.00.
Aveng Legacy
Aveng continues to complete the significant task of closing out non-core asset disposals and ensuring
that the Group complies with all statutory, legal, technical, commercial and human resources
obligations. This primarily relates to Aveng Africa Proprietary Limited.
The business unit recorded an operating loss of R26 million (A$2.2 million) (H1 2025: R29 million
(A$2.4 million)). The loss is primarily associated with legal expenses related to legacy contingent
liabilities. The South African performance guarantee exposure remains at R3 million (A$0.3 million).
About Aveng Limited
Aveng is an engineering-led contractor focused on infrastructure, resources and contract mining in
selected markets, capitalising on the expertise and experience within McConnell Dowell and Moolmans.
Short-form announcement
This short-form announcement is the responsibility of the directors and is only a summary of the
information contained in the full reviewed interim condensed consolidated financial statements for the
six months ended 31 December 2025 ("Full Interims"), which are available at
https://senspdf.jse.co.za/documents/2026/JSE/ISSE/AEG/HY2026.pdf and on the Company's website
at https://www.aveng.co.za/results-reports-presentations.php.
This announcement does not contain full or complete details and any investment decisions by investors
and/or shareholders should be based on consideration of the Full Interims.
Review opinion
The Full Interims have been reviewed by the Company's external auditors KPMG Incorporated, who
expressed an unmodified review conclusion, in accordance with International Standard on Review
Engagements ISRE 2410 Review of Interim Financial Information Performed by the Independent
Auditors of the Entity (ISRE 2410).
23 February 2026
Boksburg
JSE Sponsor
Valeo Capital (Pty) Ltd
Edinah Mandizha
Group Company Secretary
Tel: 011 779 2800
Email: investor.relations@avenggroup.com
Executive Directors
DM Simpson (Interim Group Chief Executive Officer) | AH Macartney (Group Finance Director and Chief
Financial Officer)
Non-Executive Directors
PA Hourquebie (Independent Non-executive Chair) | DC Noko (Lead Independent Non-executive) | NR
Bowen (Independent Non-executive) | SJ Flanagan (Non-executive) | BC Meyer (Independent Non-
executive)
Registered office
Rose Avenue, 2 Merlin Drive, Parkhaven – Boksburg, Gauteng 1459
Date: 23-02-2026 05:15:00
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