AVENG LIMITED - Voluntary trading update20 Jan 2022
Voluntary trading update

(Incorporated in the Republic of South Africa)
(Registration number: 1944/018119/06)
ISIN: ZAE000302618
("Aveng" or "the Group")

Voluntary trading update

Aveng is pleased to report that it has grown its work in hand to R29,1 billion (30 June 2021: R25,3 billion) as at 31
December 2021. This includes AUD1,1 billion of new work won by McConnell Dowell.
McConnell Dowell, Moolmans and Trident Steel have met expectations for the six month period ended 31 December
2021 at both revenue and operating profit levels, despite challenging conditions.
McConnell Dowell
McConnell Dowell’s operating profit is expected to be in line with budget. Despite the ongoing effects of the COVID-
19 pandemic, including severe restrictions impacting the mobility of our people across all operating regions, the
business continued to show resilience and has built on the momentum gathered in the prior reporting periods. The
Australian business unit, in particular, continued to perform well while New Zealand had a slow start to the period but
showed positive signs of recovery in the latter part. Built Environs benefited from project awards previously deferred
in all its markets coupled with sound project delivery. Southeast Asia continued to present a challenging business
environment as a consequence of the ongoing COVID-19 related restrictions across the five countries in which we

McConnell Dowell’s continuing focus on its targeted markets, in a buoyant construction market, has been rewarded
with growth of AUD1,1 billion of new project awards resulting in work in hand increasing to AUD2,2 billion (30 June
2021: AUD1,9 billion) as at 31 December 2021. New project awards included:
    • the Queen Elizabeth Hospital stage 3 redevelopment in Adelaide. The successful delivery of this project will
        enable and support a world-class healthcare service for Adelaide’s western suburbs. Built Environs was
        appointed the managing contractor on the project;
    • two sizable contracts for major road projects in Victoria, namely the Narre Warren-Cranbourne and the
        Healesville-Koo Wee Rup road upgrades;
    • multiple water industry contracts in New Zealand, including the stage 2 upgrade of the Gisborne Wastewater
        treatment plant, the Corban Reserve stormwater upgrade and the Barber Grove Seaview Wastewater
        treatment plant pipe duplication projects. The awarding of these projects to McConnell Dowell continues to
        demonstrate the business’s leadership in the growing water sector;
    • first phase designs and early delivery activities for the Inland Rail project in Victoria, which is a crucial
        component of a major national transport project to modernise Australia’s freight and supply chain
        capabilities, connecting existing freight routes through rail, roads and ports, supporting Australia’s growth;
    • the marine structures contract for BCI Mineral’s Mardi Salt and Potash project in Western Australia being
        the largest capital works contract of this major new mining development.

The project pipeline continues to grow in value with preferred tender projects amounting to AUD2,1 billion (30 June
2021: AUD1,7 billion). McConnell Dowell expects to successfully convert these preferred positions into new work in
hand in the upcoming reporting periods. McConnell Dowell is a preferred bidder on the following significant
    • New Bridgewater Bridge in Hobart, Tasmania for the Department of State Growth. A city-shaping project
        and one of the state’s largest infrastructure developments;
    • further level crossing removal packages in Melbourne for LXRP;
    • multiple project opportunities at a major hospital in New Zealand involving building and infrastructure
        works; and
    • a major new transport project in Western Australia, Perth’s new Midland station project, which will
        see an existing 53-year-old station decommissioned and demolished and replaced with a new three-
        platform station.
The world economy is emerging from the impact of COVID-19 and this has seen a recalibration of market dynamics
which have resulted in stronger commodity prices. This bodes well for investment in mining activities across the
globe. Moolmans is well positioned to take advantage of opportunities in Southern and West Africa.

As previously reported, the Tshipi and Kolomela contracts recorded disappointing results for the year ended 30 June
2021 that required specific management intervention. The management team, in consultation with customers,
implemented remedial plans on both contracts in the first half of the 2022 financial year. The Group is pleased to
announce that Kolomela has recovered from the previously noted underperformance and has been profitable for the
six month period. Management have concluded a successful renegotiation on the current Tshipi contract with
improved commercial terms. Moolmans is now focused on negotiating and concluding a new 5-year contract with
this long-term client.

Negotiations continue with other key clients to further extend and expand production on existing contracts, taking
advantage of our existing fleet of Heavy Mining Equipment as it becomes available. Furthermore, Aveng’s
strengthened balance sheet and improving operational performance supports Moolmans investment in new Heavy
Mining Equipment for new growth opportunities.

The Gamsberg contract came to end on 31 December 2021 as Moolmans and the client could not agree on mutually
acceptable commercial terms. This decision is considered prudent and in line with our strategy of only focusing on
projects that are commercially viable and that deliver an acceptable return on investment. The equipment on site will
be reassigned to other contracts. Limited staff are still present on site as recovery operations continue for our
colleague who remains missing following the slope failure in November 2020.

Moolmans operating profit for the six month period ended 31 December 2021 is expected to be in line with budget.

Trident Steel
Trident Steel continues to outperform as a steel service centre business, primarily focused on the automotive sector.
Operational profitability is expected to exceed budget for the six month period ended 31 December 2021. This
performance should be seen in the context of a challenging environment that included the KwaZulu-Natal riots in July
2021, the steel industry strike and the ongoing global shortage of semi-conductors. Having been awarded additional
first tier supply contracts to OEMs and increased levels of production by the OEMs, prospects for the growth of this
business remain positive. As previously reported, Aveng remains committed to dispose of this business for value, in
line with our strategy. Negotiations are ongoing with various interested parties.

The Group is currently completing the financial reporting for the six month ended 31 December 2021 and expects to
release its reviewed results on or about 22 February 2022.

The information contained in this announcement has not been reviewed and reported on by Aveng’s external

20 January 2022

Melrose Arch
JSE Sponsor
UBS South Africa Proprietary Limited

Itumeleng Lepere
Stakeholder Engagement Lead
Tel: 011 779 2800
Email: investor.relations@avenggroup.com
Forward looking statements

Certain statements in this document are not reported financial results or historical information but forward-looking statements. These include but not
limited to statements about the Group’s operations, financial conditions, earnings, and growth prospects. They are based on the best estimates and
information of Aveng at the time of writing. They are nonetheless subject to significant uncertainties and contingencies, many of which are beyond
the control of the Group. Unanticipated events may occur, and actual future events may differ materially from current expectations due to changes
in priorities by the Group, COVID-19 lockdown restriction or engagement with clients, suppliers, external auditors and other stakeholders .

Date: 20-01-2022 01:02:00
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