Aveng Group Limited, a prominent player in the construction and engineering sector, has announced a significant change in its reporting currency. The company, incorporated in the Republic of South Africa, revealed that it would now be reporting its financials in Australian Dollars (A$), shifting away from the South African Rand (ZAR).
The decision stems from Aveng’s transformation into a business with two primary subsidiaries, McConnell Dowell and Moolmans, generating 91% of its revenue from outside South Africa. According to the board of directors, the move to Australian Dollar financial reporting is deemed more relevant, given the Group’s predominant transactional currency and operational focus.
While the reporting currency undergoes a transition, it’s crucial to note that the functional currencies of Aveng’s underlying businesses remain unchanged. This means that the currencies of the primary economic environments in which these businesses operate will remain the same. Therefore, foreign exchange exposures will continue to be managed, albeit with their effects presented in Australian Dollars.
To facilitate investors’ understanding of the change, Aveng has committed to providing summarized, restated Australian Dollar financial information for previous periods, ensuring compliance with International Financial Reporting Standards (IFRS).
Trading Statement
In a separate announcement, Aveng Group issued a trading statement in compliance with JSE Listings Requirements, highlighting anticipated financial results for the six-month period ended 31 December 2023. Shareholders were informed of expected increases in revenue and operating earnings, with both McConnell Dowell and Moolmans showing improved performance.
Earnings from continuing operations are projected to soar by 110% to 120% compared to the previous corresponding period. Similarly, headline earnings for the same period are anticipated to witness a significant rise, ranging between 72.7% to 81.1%.
However, it’s worth noting that the prior-year earnings included contributions from Trident Steel, which was divested in the second half of the 2023 financial year. Consequently, the Group’s earnings for the current period are expected to be lower than the prior comparative period by 76.6% to 84.0%.
The Group has provided detailed ranges for expected earnings, reported earnings, and other supplementary information, aiming to provide transparency to its investors. The release of the reviewed results for the six-month period ended 31 December 2023 is scheduled for around 20 February 2024.
Conclusion
Aveng Group’s decision to switch its reporting currency to the Australian Dollar reflects its strategic evolution and the changing dynamics of its business operations. The move is expected to offer stakeholders greater clarity and insight into the Group’s financial performance, aligning with its global expansion and revenue diversification efforts.
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