Aveng earnings slip

Johannesburg - Aveng [JSE:AEG], Africa's largest builder by market value, posted an 8% drop in full-year profit, hit by tough trading conditions, but said it aimed to buy back up to R1bn of its own shares.

The company, which has operations in more than 25 countries, said its headline earnings per share totalled 483.6 cents in the year to end-June, down from 528.5 cents a year earlier.

The South African construction industry has avoided the worst of the economic downturn, due to big infrastructure projects related to the 2010 soccer World Cup.

But companies now need to replenish their order books quickly, as projects such as those planned by power utility Eskom, have been delayed or suspended due to lack of funds.

Aveng said its two-year order book rose 2% to R31.1bn.

The company, which operates across Africa, Australasia and the Middle East, said its revenue increased just 1% to R34bn and maintained its final divided at 145 cents.

Aveng's main rival Murray & Roberts Holdings [JSE:MUR] said last month its full-year earnings dropped by 50%, hit by costs from completing Africa's first rapid rail network, but forecast a rebound this year.

Smaller competitor Wilson Bayly Holmes - Ovcon [JSE:WBO] on Monday posted a 9% rise in full-year earnings, but remained cautious on its outlook due to uncertainty about the global economy.

Shares of Aveng have dropped nearly 5% so far this year, outperforming Johannesburg's construction index , which has fallen more than 10%.