“Revenue decreased by 14 per cent to 23.9 billion from 27.7 billion rand in 2013 as a result of completion of multi-year major mining and infrastructure-related contracts and non-renewal of three gold-mining contracts at Aveng Moolmans,” said the group.
The group also saw net operating earnings falling 19 per cent to 413 million from 510 million rand in December 2013.
The multidisciplinary services company across the construction and engineering value chain also saw headline earnings drop of 55 per cent to 138 million rand from 307 million rand in the previous comparable period.
“The decrease in revenue was marginally offset by the weaker rand to Australian dollar exchange rate, which contributed 602 million rand comparable to 1.6 billion rand in 2013,” said the group.
The group attributed the operating environment to losses on the Mokolo Crocodile Pipeline contract as a result of difficulties in returning to higher productivities following severe flood damage, causing an extended close-out of the contract.
[DATA AEG:Aveng Group] said, in line with the economic slowdown experienced in the Group’s key markets, the company continued to experience difficult trading conditions.
“Continuing the preceding financial year’s trends, the South African market remained challenging due to low levels of major infrastructure-related spend, the impact of reduced mining activities and labour disruptions,” added the group.
“Trading conditions in Australia were complicated by the fact that social and transport-related infrastructure projects are not yet compensating for the reduced mining infrastructure spend and recent decline in liquid natural gas projects.”
Aveng said, despite these macro-economic challenges, the recovery and stabilisation plan implemented in the previous financial year, which focused on strengthening liquidity and reducing fixed costs, continued to progress as anticipated.