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Johannesburg - Shares in SA builder Aveng [JSE:AEG] plunged 16% on Thursday after it flagged a 50% drop in full-year profit, citing labour disruptions and an industry-wide slump at home.
Headline earnings per share (EPS), a widely watched measure of profit that strips out certain one-off items, likely fell by 50% to 56.3 cents in the year to end-June, Aveng said in a statement.
Shares in the company plunged 16% to R7.55, a level last seen 11 years ago and the biggest daily percentage decline in nearly seven years.
The stock has dropped by almost 90% from its peak of R72 in 2009 - the final year of South Africa's construction boom in the run-up to the 2010 soccer World Cup.
The construction industry has slowed sharply as the government delays rolling out its nearly R1trn infrastructure investment plan and weak commodity prices hit demand from the mining industry.
Aveng said it would be cutting costs after its order book declined 10% since December 2014 due to unsuccessful tenders and the completion of major projects in Australia and Africa.
"In response, a cost reduction programme was initiated to reduce costs to a level appropriate to the anticipated reduced revenue," the group said in a statement.
Rival Murray and Roberts said on Wednesday it had won a R4.8bn manganese contract in South Africa, sending it shares surging.
