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Johannesburg - Construction and engineering group Aveng [JSE:AEG] said on Tuesday that as a result of having to pay a R129m penalty in terms of a settlement with the Competition Commission, it anticipates that its earnings for the six months ended December 2010 will be between 30% and 35% lower than the previous comparable half-year.
The group said that following discussions with the Competition Commission, Aveng (Africa) Limited has entered into a settlement agreement with the Commission to settle the two complaints against its Steeledale business unit.
The first complaint relates to historical anti-competitive conduct involving the Steeledale Mesh business unit, and the second complaint, to historical collusion in the reinforcing steel bar market.
The mesh matter was referred to the Competition Tribunal on 2 December 2009. On 1 February 2011, Steeledale was also named as one of 20 respondents in the Competition Commission's referral to the Competition Tribunal in respect of its investigation of collusion in the reinforcing steel bar market.
In terms of the settlement agreement, Aveng (Africa) Limited has agreed to pay an administrative penalty in the amount of R128 904 640, which represents 8% of Steeledale's annual turnover for the financial year ended 30 June 2008, for both the mesh and reinforcing steel bar complaints.
"This settlement is in full and final settlement of all alleged contraventions of the Competition Act by Steeledale that are the subject of the Commission's investigations and referrals in terms of both complaints. It has been agreed with the Competition Commission that the penalty will be paid in four equal instalments over a period of 24 months from the date of the Tribunal order," Aveng said.
In the light of these cases three employees of Steeledale had been suspended, pending an internal inquiry, it added.
"The Aveng Group remains fully committed to cooperating with the Competition Commission in rooting out collusive behaviour in the industry," the group stated.
But it added that that following the settlement agreement, the group now anticipated that its headline earnings per share and earnings per share for the six months to 31 December 2010 would be lower than that of the corresponding interim period ended 31 December 2009 (163,4 cents and 164,1 respectively) by between 30% and 35%.
The group is currently in a closed period. The interim financial statements to 31 December 2010 are scheduled for release on Monday, 14 March 2011.
The group said that following discussions with the Competition Commission, Aveng (Africa) Limited has entered into a settlement agreement with the Commission to settle the two complaints against its Steeledale business unit.
The first complaint relates to historical anti-competitive conduct involving the Steeledale Mesh business unit, and the second complaint, to historical collusion in the reinforcing steel bar market.
The mesh matter was referred to the Competition Tribunal on 2 December 2009. On 1 February 2011, Steeledale was also named as one of 20 respondents in the Competition Commission's referral to the Competition Tribunal in respect of its investigation of collusion in the reinforcing steel bar market.
In terms of the settlement agreement, Aveng (Africa) Limited has agreed to pay an administrative penalty in the amount of R128 904 640, which represents 8% of Steeledale's annual turnover for the financial year ended 30 June 2008, for both the mesh and reinforcing steel bar complaints.
"This settlement is in full and final settlement of all alleged contraventions of the Competition Act by Steeledale that are the subject of the Commission's investigations and referrals in terms of both complaints. It has been agreed with the Competition Commission that the penalty will be paid in four equal instalments over a period of 24 months from the date of the Tribunal order," Aveng said.
In the light of these cases three employees of Steeledale had been suspended, pending an internal inquiry, it added.
"The Aveng Group remains fully committed to cooperating with the Competition Commission in rooting out collusive behaviour in the industry," the group stated.
But it added that that following the settlement agreement, the group now anticipated that its headline earnings per share and earnings per share for the six months to 31 December 2010 would be lower than that of the corresponding interim period ended 31 December 2009 (163,4 cents and 164,1 respectively) by between 30% and 35%.
The group is currently in a closed period. The interim financial statements to 31 December 2010 are scheduled for release on Monday, 14 March 2011.
