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




TRADING STATEMENT AND OPERATIONAL UPDATE



TRADING STATEMENT

This trading statement is in accordance with paragraph 3.4 (b) of the JSE Listings Requirements, which requires issuers to
publish a trading statement as soon as they are satisfied that a reasonable degree of certainty exists that the financial
results for the period to be reported on will differ by at least 20% from those of the prior comparative period.

Shareholders are accordingly advised that the Group expects to report an earnings loss per share and a headline loss per
share for the year ended 30 June 2023, in comparison to earnings per share of 106 cents and headline earnings of 252
cents per share in the prior year.

The financial information on which this trading statement is based has not been reviewed or reported on by the Group’s
external auditors.

A further trading statement will be released providing shareholders with ranges for earnings per share and headline earnings
per share, as required by the JSE Listings Requirements, in due course.

OPERATIONAL UPDATE

Aveng is structured to deliver its projects through its two subsidiaries, McConnell Dowell and Moolmans, across four
operating geographies, namely Australia, New Zealand & Pacific Islands, Southeast Asia and South Africa.

McConnell Dowell

Operating performance
McConnell Dowell’s Australian and New Zealand & Pacific business units are expected to report increased operating
earnings in comparison to the prior year (FY2022: R777 million (AUD70 million)). This improved performance is
overshadowed by the losses in Southeast Asia, primarily from the Batangas LNG terminal project (“BLNG project”).

Despite the improved performance in the Australian and New Zealand & Pacific business units, McConnell Dowell is
expected to report an operating loss in the order of R820 million (AUD65 million) for the year. The BLNG project is expected
to report a total operational loss of R1 350 million (AUD114 million) after providing for costs to date and costs to complete.

Over the last quarter, McConnell Dowell developed a comprehensive program to completion for the BLNG project, in
consultation with the client, FGEN and the client’s Owners Representative, (a client appointed independent engineer).
McConnell Dowell has been working to execute the remaining work to support delivery against this program. Construction
activity is proceeding to support ongoing commissioning activities, with initial systems energisation scheduled to occur in
July. Overall progress supports completion and handing over the facility for operation later this calendar year.

Since the last announcement, published on SENS on 13 April 2023, McConnell Dowell has received payment for certifications
that were previously overdue on the contract. McConnell Dowell continues to work with FGEN to seek the best outcome for
both parties, including minimising the time and cost to complete the project, and resolving remaining claims.
Following the disappointing outcome of the BLNG Project, management conducted a review of other projects within the
portfolio in order to ensure that risks and opportunities were identified and that mitigating actions are taken in support of both
near term forecasts and future budgets. Lessons learnt from the BLNG Project have been applied in order to improve tender
evaluations, project execution and ongoing risk management of projects.

The previously reported McConnell Dowell debt of R529 million (AUD43 million), arising from the BLNG project guarantee,
has reduced by R251 million (AUD20 million) with the balance converted to term debt. This debt will be settled over the
next 12 months. Our bankers and guarantee providers remain supportive of McConnell Dowell, providing guarantee facilities
in excess of current projected growth requirements. The Australian and New Zealand & Pacific business units continue to
perform to expectation with strong liquidity and cash flow. McConnell Dowell closed the financial year with a cash balance
of c.R2,2 billion (AUD177 million).

Work in hand
McConnell Dowell has continued its recent success in building its order book, with AUD1 billion of new work secured in the
second half of the year. This follows the AUD2,2 billion secured in the first half and maintains work in hand at AUD3,5 billion.
This strong work in hand balance provides certainty over the FY2024 budget revenues.

Recent wins include two significant water pipeline projects in Queensland, further rail infrastructure in South Australia,
redevelopment of recreational facilities in Victoria, as well as hospital and airport works in Auckland, New Zealand. Following
the devastating impact of Cyclone Gabrielle, McConnell Dowell is assisting to remediate highway infrastructure in the North
Island of New Zealand. On the South Island, the construction of a waste-water treatment plant has been secured, building
on the impressive track record in delivering water management infrastructure across the Asia-Pacific region.

Moolmans

Operating performance
Moolmans focus during the year was investment in equipment, people and systems to aid efficient project execution. With
the new five-year Tshipi é Ntle project secured, Moolmans committed to a R900 million investment in new heavy mining
equipment. The majority of this equipment is now on site and is either in deployment or awaiting commissioning. The
delivery of this operating equipment has resulted in a gradual, positive operational performance improvement during the
last quarter. This trend is expected to continue as the remaining equipment is delivered to site and commissioned. Final
delivery of equipment is expected by September 2023.

The staggered delivery profile of new heavy mining equipment and further delivery delays experienced from Original
Equipment Manufacturer Suppliers resulted in delayed improvements in operational performance. The improved operational
trend in the last quarter is not sufficient to fully mitigate the losses incurred in the first nine months of FY2023. Moolmans
expects to record an operating loss in the order of R105 million in FY2023.

Work in hand
During the second half, Moolmans secured a one-year extension to the Sishen contract valued at R900 million. Negotiations
are ongoing with the client on a new five-year contract. Moolmans work in hand at close of FY2023 was R8,0 billion.

Changes in management
Jerome Govender, the Managing Director for Moolmans, tendered his resignation in order to pursue opportunities outside
the Group. In the interim, Sean Flanagan the Group Chief Executive Officer has assumed the role of executive chairman
of Moolmans and a search for a new Moolmans Managing Director is underway. Sean will continue performing his duties
as Group Chief Executive Officer. Further, Mr Rod Dixon joined Moolmans as Operations Director with effect from 1 June
2023 and Ms Tumi Smith joined on 1 July as HR Executive. Both Rod and Tumi are members of the Moolmans Exco.

Group Liquidity
The Group is expected to report a net cash position of R1,3 billion, excluding IFRS16, after taking into account positive
cash on hand of R2,3 billion and debt of R1 billion. The current debt is made up of c.R700 million in new asset backed
finance in Moolmans and c.R286 million in McConnell Dowell incurred on the BLNG project. McConnell Dowell’s debt will
be settled in FY2024.
Aveng, the parent company, settled its legacy debt after partially utilising a portion of the total cash proceeds of R1,2 billion
received on sale of Trident Steel.

21 July 2023

Melrose Arch

JSE Sponsor
Valeo Capital (Pty) Ltd




Itumeleng Lepere
Manager Investor Relations
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,
engagement with clients, suppliers, external auditors and other stakeholders.