| Fri 24 Oct 2008, 14:19 | | AEG - Aveng Limited - The following statement was made by Angus Band, the |
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AEG
AEG
AEG - Aveng Limited - The following statement was made by Angus Band, the
chairman of Aveng Limited, at the company`s annual general meeting held on
Friday 24 October 2008.
THE AVENG GROUP
AVENG LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1944/018119/06)
ISIN: ZAE000111829
SHARE CODE: AEG
("Aveng" or "the Company")
The following statement was made by Angus Band, the chairman of Aveng Limited,
at the company`s annual general meeting held on Friday 24 October 2008.
In his Chairman`s report contained in the 2008 annual report, Angus Band
observed that the infrastructure landscape remained very positive with
opportunities extending well beyond 2010, especially in the power, roads and
transport environments. In addition, high commodity prices were expected to
fuel demand for infrastructure projects for mining houses. However, since that
report was written at the beginning of July 2008, the investment climate
worldwide has changed significantly as a result of the global liquidity squeeze
and the general slowdown in the world`s economies.
Although the South African banking sector has, to a large extent been insulated
from the impact of the crises, our customers will inevitably find it more
difficult and more expensive to fund project which may, if the current
conditions continue, impact on our order books in the medium term. Locally, the
credit squeeze is likely to impact on the residential housing market in which
Aveng is not involved. In our view, the backlog in infrastructure spending
remains high and therefore the fundamental outlook for Aveng is still sound.
In spite of these volatile conditions, the group`s two year order book as at 30
September 2008 has increased to R27 billion compared to R25,8 billion at 30 June
2008.
Although activity levels in the Manufacturing and Processing cluster are in line
with expectations, reductions in the steel price, which were anticipated, from
the high levels experienced in the second half of the prior financial year and
lower vehicle sales will impact negatively on the Manufacturing and Processing
cluster. The price of steel into the automotive industry has risen by 20%
recently, which will mitigate some of the impact.
The group`s balance sheet remains strong even after the return of R3,6 billion
to shareholders last year and the payment of dividends totalling R1,2 billion in
respect of the year ended 30 June 2008. Aveng is well placed to take advantage
of any acquisition opportunities that may become available as a result of more
realistic price expectations of vendors.
We continue to co-operate with the Competition Commission in their investigation
into the steel reinforcing industry including reinforcing steel and
infrastructural products.
In summary, while there is little doubt that South Africa will not emerge
unscathed from the global financial crises, our view, as stated in our year-end
prospects statement, has not changed that Aveng is well placed to deliver
material earnings growth in 2009.
24 October 2008
Sponsor: J.P. Morgan Equities Limited
Date: 24/10/2008 14:19:34 Produced by the JSE SENS Department.
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