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Johannesburg - Construction group Aveng [JSE:AEG] advised on Monday that it anticipates headline earnings per share and earnings per share for the six months to December 31 2009 to be 30% and 35% lower than 244.5 cents in the previous period.
The group said its manufacturing and processing segments remained under significant operating pressure due to reduced steel prices and lower demand for steel and fabricated products as some of the major infrastructure projects reach completion.
"In addition, in the comparable period ended December 2008, steel prices had not yet been fully impacted by the global economic downturn. The demand for cementitious products also remains depressed. The aggregate performance of these business segments for the six months to December 2009 does however show an improvement on the second half of the prior financial year," Aveng said.
It said opencast mining had improved its contribution to group earnings in spite of the impact of a strong currency.
"The group's construction operations have lifted their contribution with a much improved operating performance from the South African business units, Aveng said.
And margins within its Australian based construction operations had reduced marginally when compared to the comparable performance for the half year to December 2008 as trading conditions tightened in its markets, it said.
"As anticipated, income from investments has declined from the comparable period in 2008 following the reduction in interest rates and the reduction in cash on hand as a result of capital expenditure and the Company's share buyback programme and special dividend in the latter part of the comparable period.
"The order book for the Group's construction business currently stands at R32.7bn, which is a marginal increase on the R31.9bn reported in September 2009," it said.
Aveng said its interim financial statements are scheduled for release on March 17 2010.
- I-Net Bridge
