Aveng hit by weak markets
Construction and engineering group Aveng CEO Kobus Verster has said that continued softness in the local construction sector made it difficult for the still-struggling Grinaker-LTA to regain its footing.
Aveng reported a 19% drop in net operating earnings, to R413-million, for the six months ended December 2014, compared with the same period last year and revenue was down 14%, to R23.9-billion.
Aveng’s South African and rest of Africa construction and engineering business, which housed Grinaker-LTA, saw a net operating loss of R229-million for the six-month period.
Verster said low national infrastructure spend in South Africa, coupled with overcapacity in the construction market and low margins, made it difficult for Grinaker-LTA to execute its long-standing turnaround strategy.
Verster believed the restructured business could break even in the next 18 months as it was finally emerging from a series of challenging contracts, while staff turnover had settled down, and the company’s new management had been firmly embedded in their positions.
Promising work outside South Africa included three potential private sector projects in Tanzania, Rwanda and Ethiopia.