Aveng gets Au$1bn in contracts

Aveng’s Australian subsidiary McConnell Dowell has won contracts to the value of Au$1 billion since end-December.

This is not the only good news for the troubled infrastructure and resources group, as it has also settled two long-standing outstanding claims that will release Au$41.5 million in cash to the group in the short term.

It said on Thursday the contracts awarded to McConnell Dowell, which operates in the engineering and construction sector across Australia, New Zealand and Pacific Islands and South East Asia, represents growth of 47% since December 31.

The group added that in addition to the secured orders, McConnell Dowell has in excess of Au$1.2 billion of tenders that are currently under evaluation, pending contract award.

“The pipeline of new work is further supported by Au$930 million worth of projects which are currently in preferred status or Early Client Involvement (ECI) contracts.

“Tender volumes are expected to increase further over the coming months, particularly in support of stimulus packages as economies enter a post lockdown period,” it said.

An analyst, who did not want to be named, said it is obviously positive news that McConnell Dowell has secured these contracts but at the end of the day, what is the risk in those contracts and what margin has it priced into them?

“That is the million-dollar question, but you would rather have them than not have them.

“Aveng has got two operations now. Moolmans is pretty marginal and McConnell Dowell is either going to save their bacon or put them in [under].”

Aveng said the contract awards it has secured are with government customers and span all geographic regions

These include:

Jurong Regional Line package 108 (J108) for Singapore’s Land Transport Authority.

Palembang City Sewerage project in Java in Indonesia.

New Bang Pha Pump station in Thailand for Thai Oil.

The Cherry St, Old Geelong Rd, Werribee St and Cranborne Line Upgrade (CLU) packages for Victoria’s Level Crossing Removal Project in Melbourne in Australia.

South Australian Water Frameworks package for SA Water.