Adjudication award will hit earnings
LISTED construction and engineering group Aveng has revised its previous market guidance and reduced its expected earnings for the six months to December by R92 million because of a significantly lower-than-expected dispute adjudication board award. The award related to the Mokolo Crocodile Augmentation Project in Limpopo. The group said yesterday it had received the award notification this week from the board but had not anticipated receiving it during this reporting period. It said the award was in favour of the group, but the quantum of the award was “significantly less” than expected in the preparation of the company’s financial results for the year to December. “Aveng is not in agreement with this award and is considering filing a notification of dissatisfaction, which may move this dispute into arbitration. Despite the group’s view on the recoverability of this claim, Aveng believes it is prudent for this adjusting post-balancesheet event to be recognised, and the group is therefore required to revise the previously provided guidance to the market, resulting in earnings reducing by R92m,” it said. Aveng said the group now expected headline earnings a share to be between 66 percent and 74 percent worse than the 58c loss in the previous year. This equates to a headline loss a share of between 96c and 101c for this reporting period. Aveng expects to release its interim financial results on February 20.
Aveng has reduced its expected interim earnings by R92m.