Aveng expects to report lower interim earnings

17th February 2023 By: Darren Parker - Creamer Media Contributing Editor Online

JSE-listed Aveng expects to report a 13% to 17% year-on-year drop in earnings for the six months ended December 31.

In conjunction with the softer operating earnings and flat earnings for the period, the group said on February 17 that it was also expecting to report a 16% increase in revenues.

Despite facing macroeconomic challenges, the group said it has implemented robust internal controls and measures to mitigate the impact, making progress in its long-term growth strategy.

The revenue increase was attributed to more work in hand, particularly in the group’s Australasian business McConnell Dowell, which is expected to report 22% growth in revenue.

However, revenue at the local contract mining business Moolmans is expected to taper back following the completion of previous projects.

Steel subsidiary Trident Steel's revenue is expected to increase by 58% and is currently in the process of being sold.

Aveng's work in hand has increased by about 64% from R31-billion as at June 30, 2022, to about R50-billion. Aveng said this growth was central to its focus on implementing long-term growth strategies in its two core businesses through stringent execution, coupled with reinvestment in people, processes, systems and equipment.

In terms of expected earnings for the period, McConnell Dowell's operating earnings are expected to increase, led by the Australian business unit's strong performance and above-planned performance in New Zealand and the Pacific Islands.

However, this growth will be offset by underperformance on one contract in Southeast Asia, which is nearing completion.

Meanwhile, Moolmans' operating earnings are expected to decrease mainly as a result of lower revenues and an underperformance on one major contract, which has been renegotiated.

In addition, Trident Steel's operating earnings are expected to exceed the prior year's comparative period.

Aveng will publish its results on February 21.