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Trading statement

Published: 2022-02-14 11:15:00 ET

Aveng Group Limited (JSE:AEG) News - Trading statement

AVENG LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1944/018119/06)
SHARE CODE: AEG
AEG ISIN: ZAE000302618
("Aveng", "the Company" or “the Group”)

TRADING STATEMENT
In accordance with paragraph 3.4 (b) of the JSE Listings Requirements, issuers are required to publish a trading
statement as soon as they are satisfied that a reasonable degree of certainty exists that the financial results for the
period to be reported on will differ by at least 20% from those of the prior comparative period.
Aveng expects to report operating earnings of between R210 million and R218 million for the six months ended 31
December 2021 compared to R280 million in the comparable prior period.
Trading conditions in the period continued to be impacted by the effects of COVID-19, including travel restrictions
and lockdowns. In addition, South Africa was impacted by riots, a steel industry strike and a global shortage of semi-
conductors affecting the automotive sector. Despite the difficult operating conditions, McConnell Dowell is expected
to record an operating profit in line with the prior comparative period whereas Moolmans and Trident Steel are
expected to report a slightly reduced profit.
Classification of Trident Steel as continuing operations
Whilst the strategy to dispose of Trident Steel remains unchanged, Aveng is required to continue to consider the
application of IFRS 5: Non-current Assets Held for Sale and Discontinued Operations (IFRS 5). Following an
evaluation, the criteria to disclose Trident Steel as held for sale and discontinued were not met at 31 December
2021. Consequently, Trident Steel has been reclassified as a continuing operation in the current period.

The reclassification required the recognition of prior periods depreciation of R155 million, partially offset by a
reversal of previously recognised impairments of R103 million, resulting in a net charge of R52 million in the current
period. This compares to a fair value gain of R415 million in the comparable period. These amounts have been
included in the expected and reported earnings disclosed. The reclassification and related charges and gains did
not impact the trading activities or cashflow of Trident Steel.
Changes in capital structure
During the 2021 financial year, the total number of shares in issue increased from 19 395 million to 64 742 million as
a result of two corporate events, namely a renounceable rights offer concluded on 15 March 2021 and a follow-up
rights offer concluded on 7 June 2021. Subsequently, the Group’s authorised and issued share capital was
restructured, on 8 December 2021, with every 500 shares consolidated into 1 share. The result of the share
consolidation is set out below:
                                                            Pre-share consolidation       Post-share consolidation
                                                                (million shares)              (million shares)
 Authorised
   Ordinary shares                                                      180 882                          361,8
   Class A shares                                                       500 000                        1 000,0
 Total authorised                                                       680 882                        1 361,8
 Issued
   Ordinary shares                                                      62 264                         124,5
   Class A shares                                                         2 478                          5,0
 Total issued                                                           64 742                         129,5


As a result of the corporate actions, the prior period weighted and diluted average number of shares in issue have
been restated from 19 370 million shares to 48 million shares. Consequently, both diluted earnings and earnings per
share have been restated from 2,3cps to 909cps and the diluted headline and headline earnings per share have
been restated from 0.6cps to 226cps for the six months ended 31 December 2020. The current period’s weighted
average number of shares is 122,5 million shares.
Expected results
The Group advises that it expects to report the results for the six month period ended 31 December 2021 to fall within
the following ranges:

                                                                         Expected                    Reported
                                                                         Earnings                    Earnings
                                                                      period ended                period ended
                                                                    31 December 2021            31 December 2020

                                                                   ZAR'm          % change             ZAR'm
 Basic earnings                                                    49 – 58        (89) – (87)           438
 Headline earnings                                                 14 – 19        (87) – (83)           109
                                                                   Cents              %           Cents (restated)
 Basic earnings per share                                          38 – 45        (96) – (95)           909
 Basic headline earnings per share                                 12 – 15        (95) – (93)           226
 Diluted earnings per share                                        35 – 44        (96) – (95)           909
 Diluted headline earnings per share                               11 – 14        (95) – (94)           226


The financial information contained in this trading statement has not been reviewed nor reported on by Aveng's
external auditors.

The Group expects to release its reviewed results on or about 22 February 2022.


14 February 2022
Melrose Arch
JSE Sponsor
UBS South Africa Proprietary Limited


Itumeleng Lepere
Stakeholder Engagement Lead
Tel: 011 779 2800
Email: investor.relations@avenggroup.com

Date: 14-02-2022 01:15:00
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All statements made via social media sites sponsored or maintained by Enhanced Investments and its affiliates are for informational purposes only and do not constitute a comprehensive description of Enhanced Investments' investment advisory services.
Certain investments are not suitable for all investors. Before investing, consider your investment objectives and applicable fees. The rate of return on investments can vary widely over time, especially for long term investments. Investment losses are possible, including the potential loss of all amounts invested. Information provided by Enhanced Investments is for informational and general educational purposes only and is not investment or financial advice.