| Thu 23 Feb 2012, 7:05 | | AEG - Aveng Limited - Trading Statement |
|
AEG
AEG
AEG - Aveng Limited - Trading Statement
AVENG LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1944/018119/06)
ISIN: ZAE000111829
SHARE CODE: AEG
("Aveng" or "the Company")
TRADING STATEMENT
Shareholders are advised that the Aveng Group ("the Group or the Company)
anticipates that its earnings per share and headline earnings per share for
the interim period to December 2011 will be lower than that of the
comparative period ended 31 December 2010 by between 30% and 35%. (December
2010: Earnings 107.0 cents: Headline Earnings 106.9)
The reduction in earnings is primarily due to highly competitive construction
and engineering markets, compounded by unresolved claims and some execution
difficulties on a number of large projects.
Despite a modest improvement in revenue, the South African construction and
engineering business returned an operating loss for the six month period to
December 2011. This deterioration was primarily as a result of
underperforming contracts and project risk provisions. Unresolved claims on
the sub-contracted steel fabrication projects for the Medupi and Kusile power
plants continue to adversely impact the profitability and liquidity of this
division.
Construction and Engineering: Australia showed good revenue growth, with
strong topline performance from its offshore construction, pipeline and
electrical businesses. Although margins were negatively affected by the
impact of additional loss provisions on the Adelaide desalination and QCLNG
pipeline projects, this operating group has shown an improvement in
profitability. Positive progress has been made on the previously reported
Komo airport construction project.
The performance of the Aveng Manufacturing and Processing businesses, which
includes Aveng Trident Steel, improved significantly despite a soft domestic
infrastructure market and steel supply and labour disruptions. Excluding the
impact of the competition commission administrative penalty accounted for in
the comparative period, this division showed a marked improvement in
profitability.
In the Opencast Mining business, the turnaround of underperforming contracts,
improved efficiencies and plant utilisation, contributed to a good overall
performance.
Despite the difficult market, particularly in South Africa, the Group`s two
year order book increased by 24% from R37 billion at 30 June 2011 to R46
billion at 31 December 2011, driven primarily by the demand from the mining
and energy sectors in Australia. The Australia and Pacific construction
order book increased by 62% to R30.6 billion.
This statement has not been reviewed or reported on by the company`s
auditors. The interim results for the year to 31 December 2011 are expected
to be released on Wednesday, 14 March 2012.
By order of the board
Rivonia
23 February 2012
Sponsor:
J.P. Morgan Equities Limited
Date: 23/02/2012 07:05:02 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
