| Tue 30 Jun 2009, 15:52 | | AEG - Aveng Limited - Trading Update |
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AEG
AEG
AEG - Aveng Limited - Trading Update
AVENG LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1944/018119/06)
ISIN: ZAE000111829
SHARE CODE: AEG
("Aveng" or "the Group")
TRADING UPDATE
Shareholders are referred to the company`s interim results announcement on 10
March 2009, in which it was highlighted that if the fall in the price and demand
for steel continues, the headline earnings for the second half of the 2009
financial year were not expected to match those of the previous year. In terms
of paragraph 3.4(b) of the JSE Listings Requirements, shareholders are now
advised that, the company anticipates that for the twelve months to 30 June
2009, headline earnings per share will be 20% to 25% lower than the
corresponding twelve month period ended 30 June 2008 (591.4 cents) and earnings
per share will be between 15% and 20% lower than the corresponding period (594.2
cents). The loss of investment income arising from the special dividend, return
of cash to shareholders and the share repurchase programme totalling R4,6
billion, has had a material negative impact on headline earnings per share and
earnings per share.
The earnings from the Manufacturing and Processing segment have come under
significant pressure in the second half of the financial year mainly due to:
- The worldwide economic downturn and its impact on steel prices and volumes
across most sectors
- Steel volumes in Trident Steel are down 26% on 2008, with demand in the
automotive sector falling by 35%. This, together with the decline in
steel prices of between 30% and 35% has resulted in the profitability
levels of Trident being substantially below that achieved in 2008.
- The Steeledale and Infraset business units of Aveng Manufacturing, have
also come under significant earnings pressure due to the decline in steel
prices and demand for Steeledale products, as well as due to decreasing
demand for consumer related paving and landscape products within Infraset.
Although the Construction and Engineering businesses and Opencast Mining
operations will record an improvement in the operating results achieved in 2008,
the decline in global steel prices and slower demand for steel will result in a
reduction in the operating margin of the group compared to 30 June 2008. The
operating margin of the South African Construction and Engineering segment will,
however, show a continued improvement.
The group`s confirmed two-year order book of R32 billion represents a 9.6%
increase since 31 December 2008, demonstrating that Aveng has continued to
secure new projects in a tight market. Although the order book has been
impacted by project cancellations and delays resulting from the economic
downturn and in particular the decline of commodity prices, the value of
projects cancelled has, at R4.2 billion, remained unchanged since February 2009.
Project cancellations and the economic climate in general have resulted in 450
retrenchments to date, which is 1,4% of the workforce.
Going forward, the group has a number of significant awards that are awaiting
adjudication and several major prospects that are currently being priced both
locally and in the markets in which McConnell Dowell is active. The group`s
strong balance sheet and conservative approach to conducting business ensures
that it is well positioned to weather current adverse market conditions.
The financial information on which this statement is based has not been reviewed
by or reported on by the company`s auditors. The results for the year ending 30
June 2009 are expected to be released on Wednesday 9 September 2009.
SANDTON
26 June 2009
Sponsor:
J.P. Morgan Equities Limited
Date: 30/06/2009 15:52:01 Produced by the JSE SENS Department.
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