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Aveng Shares Dip on Poor Profits Prediction

February 19, 2014 (Ventures Africa)

VENTURES AFRICA Shares of South Africa's second biggest construction firm, Aveng, slipped a little more than 2 percent during Tuesday's early trade on the JSE, on the back of renewed comments that it is expecting poor profits in the interim period to December 2013.

Aveng's earnings per share and headline earnings a share were likely to sag by between a staggering 20 and 25 percent in the six months to December 2013, the firm said.

South Africa's listed companies use the headline earnings a share as a measure of the profits for any given reporting period.

Aveng's sub-divisions, Grinaker-LTA and other mining operations emerged as the main culprits as they posted "materially higher" losses due to a major reduction in order books.

The construction sector in South Africa is currently in the doldrums as the government's highly-publicised multi-billion rand infrastructure spending has been slow to take off. This has affected the construction companies' order books.

The company said the net financial costs it had incurred during the period under review were higher than the comparable period because of higher borrowings.

Higher borrowings during the period under review were largely due to the money that went to large projects like the Queensland Curtis Liquefied Natural Gas in Australia.

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Source: Ventures Africa

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