Aveng reports subdued FY results

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The group, which released results for the six months ended 31 December 2013, saw revenue improve by 11 per cent to 27.6 billion rand from 24.9 billion rand in 2012.

Headline earnings per share however decreased by 21 percent to 82.1 cents from 104.5 cents in 2012, and net operating earnings down by 8 percent to 503 million rand from 544 million rand in 2012.

“The markets in which the group operates continue to be challenging. There has been no material improvement in infrastructure spending in South Africa and Australia and this was aggravated by the adverse impact of labour disruptions in South Africa,” the company said.

[DATA AEG:Aveng] is a South African company specialising in steel, engineering, manufacturing, mining, concessions, public infrastructure and water treatment. The group also provides multidisciplinary services in construction and engineering.

Gross earnings decreased to 1.9 million rand from 2.1 million rand in 2012, and operating expenses also declined to 1.5 million rand from 1.6 million rand in 2012.

The construction and engineering segment in Aveng’s Australasia and Asia markets continues to compete despite tough market conditions. Revenue for the segment increased by 17 per cent to 14.9 billion rand.

“South Africa and rest of Africa segment remains constrained by the ongoing delays in new public infrastructure projects. The group has partly mitigated this by pursuing opportunities in the private sector,” the group added.

Revenue for the segment increased by 11 percent to 4.2 billion rand, which was mainly due to commencement of major contracts at Aveng Grinaker-LTA, and increased activity on the Sishen and Gouda renewable energy projects at Aveng Engineering.

The Aveng Grinaker-LTA project’s revenue also increased by 10 percent to 3.8 billion rand.

Revenue for Aveng Engineering, which consists of the previous businesses of Aveng E+PC and Aveng Water, increased by 24 percent to 402 million rand against the comparative period, mainly due to the increased activity on the Sishen and Gouda renewable energy projects.

Revenue for the group’s miming operation reported a 9 percent decrease in revenue to 3.5 billion rand and a decline in net operating earnings of 24 percent to 295 million rand compared to the comparative period.

The manufacturing and processing segment’s revenue increased by 6 percent to 5.3 billion rand.

“The group will be seeking to optimise its current business portfolio focusing on cash management and financial returns whilst significantly reviewing its cost structures, operational efficiency as well as improving project delivery,” the group said.