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Losses more than double at Aveng

Construction company reports a net operating loss of R1.1bn for the year to June 30.
Aveng, which has around a third of its operations in South Africa, has been selling non-core businesses to reduce its debts. Picture: Moneyweb

Construction group Aveng on Thursday said its net operating loss more than doubled in the latest financial year, highlighting the challenges the company faces as it embarks on a turnaround strategy.

Construction companies in South Africa are battling a weak economy and a pullback in infrastructure spending by the government and private sector.

Read: Construction industry in survival mode

Aveng’s operating loss widened in the year to June 30 in South Africa and the rest of Africa, but it made a profit in Australasia and Asia, other markets where it operates and where it said infrastructure investment was on an upward trajectory.

Aveng reported a net operating loss of R1.1 billion for the year to June 30, compared with an adjusted loss of R401 million in the same period a year earlier.

The company said the loss partly reflected a weak performance at its Moolmans mining business, as well as pressure on margins at Aveng Manufacturing. That was partly offset by strong performance at Trident Steel.

It made a headline loss of R1.55 billion, after earlier flagging a potential headline loss of up to R1.60 billion.

Aveng, which has around a third of its operations in South Africa, has been selling non-core businesses to reduce its debts.

It expects to complete these disposals assets by October 2019 and said it had raised around R1 billion so far.

“We are implementing our strategic plan in turbulent domestic market conditions which have taken a heavy toll on many of our peers,” Sean Flanagan, Aveng chief executive Officer said.

Aveng said a R372 million operating loss for its Moolmans mining business in South Africa was mainly attributable to tough mining conditions at Gamsberg, underperformance of the Khutala project in South Africa and additional closure costs at the Karowe contract in Botswana. An asset health review also led Aveng to take an impairment charge.

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Not much left of it.

Most SA construction related companies have been given away to the local crowd.

There we go again, Chinese accounting in RSA….

According the statement of financial position of AVENG, they have Total Assets of R12.282billion and this includes cash and bank balances of more than R1,6billion … Then how could the Market Capitalization of this company be only be R581million?

Something does not add up here.

Market cap is shares issued x share price.

Price is now 2c per share and Market cap around R388 million.

My concern is our investments, our pension funds that are in this share. I think we need a commission of inquiry is the JSE listed companies. We should only focus State capture only. A rat should be smelt on the private sector as well… The JSE should be the starting point.

End of comments.

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