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AEG
AEG
AEG - Aveng - Operational Update
AVENG LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1944/018119/06)
ISIN: ZAE000111829
SHARE CODE: AEG
("Aveng" or "the Company")
OPERATIONAL UPDATE
The Aveng Group has in the past only released trading updates just prior to the
announcement of its financial results in respect of the half year and full year.
In the prevailing economic climate the Group has decided to release an
additional operational update.
Although the global financial crisis is negatively impacting the economies in
which Aveng operates, the backlog in infrastructure projects, including coal
fired power stations, roads and dams, continues to support public sector
investment flows. The tender pipeline remains strong although it is taking
longer for clients to finalise projects. While the decision by Eskom to postpone
the Nuclear 1 project is disappointing but understandable, Aveng has a high
level of confidence in the continued infrastructure roll-out in the markets it
serves.
The Aveng Group`s two year order book remains strong at R27 billion as was
reported at the Annual General Meeting.
Despite lower commodity prices impacting some projects in the mining sector the
Group has recently won several contracts, most notably:
- McConnell Dowell was awarded a R2.7 billion project from BHP Billiton Iron
Ore Pty Ltd for the Rapid Growth Project 5 Marine Works contract, which is
a staged development valued in excess of R4.0 billion.
- Moolmans, the Group`s opencast mining contracting operation, is in the
process of finalising four long term contracts with a combined value of
R6.5 billion.
Global steel prices have declined sharply over the past six months as supply has
exceeded demand. The reductions announced in South Africa since September 2008
are some 25% to 30% although motor industry steel prices increased by between
20% and 25% over the same time period. The impact will be an inevitable
reduction in the Group`s Manufacturing and Processing segment`s operating
margin. Consequently we anticipate that the Group`s overall operating margin
will reduce notwithstanding an improved performance from the construction and
opencast mining activities.
With its diversified geographic spread and strong balance sheet Aveng is well-
positioned to weather the current global liquidity crisis.
Date:
12 December 2008
Sponsor:
J.P. Morgan Equities Ltd
Date: 12/12/2008 13:39:34 Produced by the JSE SENS Department.
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