Construction, engineering and mining group Aveng is making headway with its debt reduction and balance sheet derisking strategy, the company said on Monday as it announced it had reduced its debt by a further R75m in three months.
The Johannesburg-based group told shareholders in a statement that it cut its external debt in SA to R406m in the three months to the end of September 2022 from R481m.
“The group will continue to derisk its balance sheet and reduce legacy debt throughout the financial year with a view to enhancing liquidity and improving balance sheet strength,” Aveng said.
It added that performance guarantees in SA were reduced in the first quarter of 2023 by 45% to R191m from R350m at the end of June.
The group reported a 60% slump in headline profits for its year to end-June, weighed down by its Africa-focused interests.
With 73% of revenue generated in its Australian business and about 13% in SA, the group has been on a bid to restructure and dispose of its noncore assets, Aveng Manufacturing and Trident Steel.
In February, news that the group had to reclassify Germiston-based Trident Steel as a continuing operation due to a slow sales process, rattled the market, sending Aveng’s shares down more than a fifth.
This required reclassification weighed on earnings for its half-year to end-December, requiring recognition of depreciation of R155m, partially offset by a reversal of already recognised writedowns of R103m. This compares to a R611m fair-value gain for the prior year.
Aveng’s share price rose 3.73% to R15.30 on Monday, but has lost more than 42% since the start of the year.
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