Aveng Falls Most in 5 Weeks on Earnings Drop: Johannesburg Mover
Aveng slid as much as 4.9 percent and closed 2.8 percent lower, its biggest daily drop since July 9, at 34.76 rand in Johannesburg.
Earnings per share excluding one-time items in the year through June fell as the South African construction and engineering unit incurred a “substantial loss” as it continued to have unresolved claims at two of the country’s coal-fired power plants, Johannesburg-based Aveng said in a statement today. The two-year order book increased 2 percent to 47 billion rand ($5.7 billion). The company made provision for a potential competition authority settlement, it said.
“The earnings are disappointing with Aveng unable to sort out its contract issues and the payment claims at Medupi and Kusile not yet resolved,” Dirk Noeth, an analyst at Avior, said by phone from Cape Town. “The order book growth is stagnant and the provision for the competition commission fine is weighing on the shares.”
Noeth said he had expected earnings per share excluding one-time items to be as much as 30 percent lower.
Eskom Holdings SOC Ltd., South Africa’s state-run power utility, awarded a 2.9 billion-rand contract in 2008 to build the Medupi plant to a group including Aveng and Murray & Roberts Holdings Ltd. (MUR) Medupi is scheduled to start generating power next year instead of the final quarter of 2012, while work at the Kusile plant was stopped last year by labor protests.
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