Aveng, South Africa’s largest construction company, is expecting to report a 40% to 60 per cent jump in headline earnings a share next month for the six months ended December, compared with the same period in 2004. This will mark a substantial improvement following the 69 per cent headline earnings a share increase Aveng recorded in the year ended June.
Some analysts were expecting Aveng boss Carl Grim to report better margins in its construction division next month. The division reported a loss in the last financial year. Aveng’s cement and steel divisions, Holcim and Trident, were expected to show substantial further growth.
Cement demand continued to exceed market expectations last year, and steel prices remained strong despite coming off record highs. Trident normally benefits from high steel prices. Substantial growth in the two divisions over the past two years has been fuelled by the building boom in the residential, retail and office segments of the market.
Aveng’s own construction division, Grinaker-LTA, has not benefited from growth in this segment as it specialises in large-scale projects mainly in the mining and manufacturing sectors. Aveng, which is in a closed period, did not provide reasons for the forecast earnings increase in its trading update on Friday.