South African construction firm Aveng increased its two-year order book by 6% to R39.8-billion in the quarter ended September 30, despite “continued underperformance” by the company’s engineering and construction divisions in the face of curtailed government infrastructure spend.

The Australasia and Asia operating segment’s order book contributed R24-billion, with recent major contracts awarded in the period including the    Christchurch rebuild, the development of the downtown line of the Singapore tunnel and construction of the Roy Hill Marine jetty.

Chairperson Angus Band said in a statement on Friday that this business continued to compete well in tough market conditions that reflected the transition to increasingly nonmining-related infrastructure spend in the Australian economy.

The order book for South Africa and the rest of Africa increased 3% from June to R6.7-billion, with projects awarded in the quarter including the design and construction of the Strand Private Hospital and the construction of the Sasol head office, in Johannesburg.

“This region remains adversely affected by the impact of labour disruptions, mainly owing to the civil engineering industry strike, major contracts which contribute to revenue without appropriate margin and the high level of fixed overhead expenses,” Band commented.

Aveng’s mining order book increased 15% to R6.9-billion over the quarter, despite the order book of Aveng Mining Shafts and Underground declining 18% since June, which the company attributed to a general decline in activity in the South African mining sector.

Meanwhile, the order book for openpit mining operator Aveng Moolmans declined as a result of project renewals still being subject to negotiation.

“Although the majority of the Aveng Moolmans’ contracts are performing well, the impact of the reduced order book will be felt in the first half of the financial year; however, the business unit continues to pursue existing and new opportunities,” said Band.

In the manufacturing and processing division, although Aveng Steel had been negatively affected by strikes in both the automotive and construction sectors, the group managed to offset this impact and was trading at higher levels than the prior year.

“Aveng Manufacturing is performing better than the first half of the previous year as a result of improved local volumes and the absence of major external disruptive market occurrences, such as mining and transport labour strikes,” Band commented.