ALTHOUGH construction group Aveng yesterday posted a drop in profit and headline earnings per share for the year ended June, the group’s underlying businesses remained solid and strong, CEO Roger Jardine said yesterday. South African construction companies are increasingly coming under pressure, with profit margins dropping due to fewer infrastructure projects out for tender since the boom times of Soccer World Cup infrastructure came to an end. Aveng’s headline earnings declined 8% to R1,9bn from R2,1bn in the previous year , translating into headline earnings per share of 483,6c, from 528,5c . Aveng is sitting on R7,5bn net cash and would use R1bn to buy back its shares, Mr Jardine said.

The group reported a marginal 1% increase in revenue to R34bn from R33,8bn a year ago, with the construction and engineering segment and the open-cast mining divisions showing single-digit revenue growth in a tough market. The manufacturing and processing segment showed revenue growth of 4% in the second half of this year compared to the first half of the year, tempering its 12- month, year-on-year revenue decline to 13%. Mr Jardine said while industry conditions were anticipated to remain relatively difficult, the group had identified a stable and healthy project opportunity pipeline of R102bn and a two-year order book of R31bn. “With a stable order book, healthy pipeline and multi- disciplinary capabilities, we are well positioned to compete successfully in a difficult market in the year ahead,” he said.

Business Day
Group upbeat on future despite drop in earnings
Thabang Mokopanele