(Incorporated in the Republic of South Africa)
(Registration number: 1944/018119/06)
Share code: AEG
Share ISIN: ZAE000194940
("Aveng", "the Company")
ANNOUNCEMENT OF CONTRACT AWARDS BY AUSTRALIAN SUBSIDIARY MCCONNELL DOWELL
- Contract awards are in line with the redefined and focused business development strategy of McConnell Dowell announced in the Group’s full year results in September 2018
- Awards totaling R3.8 billion secured across all McConnell Dowell business units underpins good progress in the execution of the Group’s Strategic Action Plan
- Contract awards secured by McConnell Dowell demonstrate the Operating Group’s specialist capabilities in Marine, Pipelines, Civil, Tunneling, Rail and Building
UPDATE ON ORDER BOOK
Aveng is pleased to provide an update on recent contract awards secured during the first quarter in the Group’s Australian subsidiary, McConnell Dowell. McConnell Dowell is a core business within the Aveng Group. A key priority in its Strategic Action Plan is to enhance operational performance, deliver growth and unlock value from core assets. The growth in the order book was identified as a key metric to achieve this objective, when the Group presented its annual results on 25 September 2018. McConnell Dowell is a specialist and respected infrastructure contractor offering engineering and construction solutions to the Infrastructure, Building and Resource sectors across Australia, New Zealand and the Pacific, Southeast Asia and the Middle East. All four business units have recently secured new projects in core markets and across their specialist capabilities providing strong opportunities across all operating regions
Key contracts awarded during the first quarter include:
Webb Dock & Burnie Facilities Upgrade (Australia): McConnell Dowell’s marine expertise is being further showcased having been contracted to upgrade existing wharf facilities at Webb Dock and Burnie for Toll Group. The project will commence immediately and will be completed ready for operational use in early 2019.
Swanson Dock Rehabilitation (Australia): Further works to rehabilitate the berth at Swanson Dock have been awarded by the Port of Melbourne Corporation. The repeat work demonstrates the strength and alignment of a successful customer relationship.
Aviation Rd & Wyndham (Australia): As part the ongoing capital works programme under the Western Program Alliance, McConnell Dowell has been awarded the contract to remove the Aviation Road Level Rail Crossing in Laverton and construct the Wyndham Vale Stabling Yard. Works on both packages are scheduled to commence immediately. These awards follow the successful execution of recent projects for the Victorian State government.
Neste Underpass (Singapore): McConnell Dowell’s underground reputation will continue to be strengthened as it has been selected by Neste to construct two underpasses for production lines, services lines and facilities at their refinery in Singapore. The underpasses are designed to connect Neste’s new facilities with its existing refinery units on the nearby islands of Tuas in Singapore.
Clean Fuel Project (Thailand): McConnell Dowell is undertaking the early works package associated with the Clean Fuel Project for Thai Oil. The project team is mobilising quickly to ensure the works are ready for commissioning during 2019.
Jane St & Mulgoa Rd (Australia): McConnell Dowell progresses a strategic growth initiative into the New South Wales transport infrastructure market with the award by New South Wales Roads and Maritime Services (RMS) of the infrastructure upgrade contract for Jane Street and Mulgoa Road in Penrith.
McConnell Dowell has previously delivered projects of this nature and civil construction remains a key specialist capability for the company. The Project was formally launched in October 2018 and construction will commence in December 2018. Completion is due in May 2020.
Auckland City Mission (New Zealand): Built Environs has secured the contract to undertake the Mission Home Ground Development Project in Auckland, as part of the City Mission Charitable Trust. This is the first project for Built Environs in New Zealand and cements a strategic entry into the building market.
Hunua 4 S11 (New Zealand): This two-year project is the final stage of the Hunua 4 Watermain Project and will supply water to Auckland’s CBD from Redoubt North Reservoir in Manukau. The Hunua 4 S11 project forms part of a large water investment scheme underway by Watercare and will bring important benefits in water security and availability to Auckland and adjacent regions.
These contract awards provide a good start to the new financial year and reflect McConnell Dowell’s improved operational state and diversified market offerings. The recent awards total R3.8 billion and take McConnell Dowell’s order book to R8.7 billion (Up 17% from 30 June 2018). Most gratifying is the continuation of work from existing customers building on past excellent performance as well as new business won in line with McConnell Dowell’s over-arching strategy. With a further potential AUD 1 billion of work in Early Client Involvement (ECI) processes, McConnell Dowell is well positioned to continue to secure additional work in the near term.
The diversification of McConnell Dowell’s Order Book highlights the breadth and depth of expertise across its operational areas. Moreover, the market sectors serviced by McConnell Dowell are expected to offer further growth opportunities with the continued roll-out of large- and medium-sized projects across its operating footprint.
The information contained in this announcement has not been reviewed and reported on by the Company's external auditors.
2 November 2018
UBS South Africa Proprietary Limited
Tel: 011 779 2979
Group Executive: Strategy & Investor Relations