Aveng attributes loss of share value to economic slowdown

Operating primarily in the infrastructure sector, Aveng Group announced a revenue decrease of 17%, from R53 billion in 2014 to R43.9 billion. Net operating earnings decreased to a loss of R288 million (2014: R799 million profit), while headline earnings per share decreased to a loss of 144,3c (2014: 112,5c profit).

According to the company's results statement, the 17% decline in revenue was principally due to the completion of multi-year major mining and infrastructure projects in Australia and Asia, as well as labour disruptions in the South African mining and steel sectors. It cited the reduced demand and pricing pressure on the back of lower international prices in the steel sector, and the non-renewal of three gold-mining contracts with lower production on other contracts as additional reasons for the revenue drop.

Aveng Group CEO, Kobus Verster, commented on the results:

"While Aveng has made inroads in delivering on our strategy, improved operational performance was overshadowed by the economic slowdown in our key markets. Delays in resolving historical problematic contracts, losses in the steel and engineering businesses, restructuring costs and a substantial provision for an unresolved claim also impacted performance."

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