Iconic South African company sees shares plunge 19% in one day

Historic construction company Aveng saw its shares plummet over 18% yesterday after the company reported a headline loss of R975 million. 

This was mainly driven by the poor performance of the company’s Infrastructure Southeast Asia business unit and the losses from the construction of a hydroelectric dam in Australia. 

The company revealed the details in financial results for the year ended 30 June 2025, indicating that another South African company is under pressure after expanding to Australia and Asia. 

Aveng’s revenue contracted by 13.9%, which is in line with its previous guidance to R31 billion for the year, after infrastructure spending declined in Australia and New Zealand. 

The group posted gross earnings of R951 million for the year ended 30 June 2025, with a margin of 3%. However, this translated into an operating loss of R693 million after a significant deterioration in the performance of key projects. 

Aveng said the operating loss reflects the combined significant losses of R1.1 billion from the Jurong Region Line project in Southeast Asia and the Kidston project in Australia.

This additional cost to complete has been recognised in the current year, but will continue impacting the company’s cash flow over the next 12 months, Aveng warned. 

The healthy cash balance in the Infrastructure and Building segments, supported by strong cash generation across the portfolio of projects, will fund the expected outflow from these projects.

Aveng said the balance of its infrastructure project portfolio remains profitable and cash generative, while operating earnings continue to improve in its building portfolio. 

The mining segment posted a disappointing result, according to the company. Steadily growing production performance and profitability on one project are offset by inefficiency and unresolved contractual matters negatively impacting performance on the other contract.

It is not all bad news for the company, with it continuing to deliver strong operating free cash inflow of R257 million despite its lower earnings. 

Aveng also starts its 2026 financial year with a significant order book of R37.5 billion, which is up slightly year-on-year. This should translate into strong earnings in the future. 

However, it remains under pressure from declining infrastructure expenditure in Australia and New Zealand, while its Southeast Asia business remains inefficient. 

In February 2025, the mining segment concluded a new 60-month contract of R10.6 billion at Gamsberg in South Africa, delivering greater volumes, increased revenue and improved profitability. 

The mining segment has noted an increase in its order book to R13.4 billion from R5.4 billion in June 2024 as the sector looks to rebound following a year of declining output. 

Aveng is set to continue its strategy of exiting the mining business, which operates under the Moolmans brand in South Africa. 

It said that significant progress has been made with a preferred party for the sale of the Moolmans business, with the company set to focus on infrastructure in Australia, New Zealand, and Southeast Asia. 

Aveng’s share price decline throughout trading on 18 August can be seen in the graph below.