The business of Aveng Moolmans and Aveng Mining Shafts and Underground have been merged under a single Aveng Mining leadership team during the second half of 2015, as a result of the depressed commodity cycle.
This was announced by construction and engineering giant Aveng Group in its latest trading statement on Thursday.
Despite the consolidation, the company reports that the performance of Aveng Moolmans continues to meet expectations despite weak commodity prices, while Aveng Mining Shafts and Underground also continues to manage an underperforming contract in both South Africa and Chile, respectively.
In both instances, management are actively engaged with their clients to seek appropriate resolution of the commercial positions.
Aveng Mining management are evaluating the merged business and will plan future activities in line with the current depressed commodity cycle. While Aveng Mining will continues to focus on cash flow generation in the commodity downturn and has managed to maintain positive cash flow despite the weaker trading environment, the company says.
Meanwhile, Aveng Group said in the announcement that the challenging economic conditions in the group’s domestic and foreign markets, labour disruptions in the mining and steel sectors and higher than expected costs to complete on certain contracts continue to have an adverse impact on the group’s operating earnings.
Aveng, therefore, also advised shareholders on Tuesday that in respect of the financial results for the year ended 30 June 2015, the group anticipates headline earnings per share (HEPS) to decline by at least 50% compared to the R112.5 per share reported for the comparative period.
This translates to HEPS of at most R56.3 per share. The anticipated HEPS, however, excludes the profit on the sale of Electrix of R713 million after taxation, as well as various impairments recognised against goodwill, intangible assets and ancillary operations.
Aveng Group says that a further announcement with a range will be issued in due course.