o Revenue down 5% to R16,8-billion on comparative six month period to December 2008.
o Operating profit of R686-million, down 29%.
o Headline earnings down to R638-million.
o Strong cash generation with cash holdings up 23%; the Group remains net ungeared.
o Two year order book increased by 8% to R32,7-billion since June 2009.
o Successful and timeous delivery of large infrastructure projects
o Significant strengthening of safety culture.

Commenting on the results for the six months to December 2009 Roger Jardine, CEO of leading infrastructure development group, The Aveng Group, said :"Our construction and engineering businesses delivered a satisfactory result in a tough market characterised by a strong local currency, a slowdown in domestic infrastructure spend and the anticipated tightening of margins in Australia. The lower demand and lower steel prices have, however, kept our steel businesses under pressure. Nevertheless, a combination of strong cash flow and a solid balance sheet position the Group to benefit from potential opportunities in this tight credit cycle."

He added "We have demonstrated our flexibility and ability to work on large projects integral to their respective economies through the delivery of two significant infrastructure developments in two continents in the same week. We presented the 2010 FIFA World Cup showpiece, Soccer City, to the City of Johannesburg on 3 March, and just two days later handed over the Sentosa Bridge, a 380 m bridge linking Sentosa Island and Singapore. Both projects highlight our commitment to safety through the achievement of 1,5 million fatality free hours and 715 000 lost time injury free hours for Soccer City and Sentosa Bridge respectively.

Financial Overview
Group performance during 1H F2010 was reflective of the tight operating conditions. Largely driven by the lower steel price over the year as well as dampened demand for steel products, overall revenue declined by 5% to R16,8-billion from December 2008. This resulted in a 29% lower operating profit of R686-million from a previous R966-million.
Through various initiatives, including tighter working capital management and stricter cost control, The Aveng Group has seen free cash increase by 33% to R3,2-billion. This was achieved after funding capital expenditure of R568-million. With net cash of R7,7-bllion during 1H F2010 and the Group remaining net ungeared, The Aveng Group is well positioned to take advantage of market opportunities, given the current restricted credit environment.
Commenting on the financial reporting period, Group financial director Simon Scott said: "Despite a decline in our revenues, we have been able to create additional value for our shareholders, with the net asset value per share increasing 10% to R27,65 per share."

Operations
The Construction and Engineering segment remains the stalwart of The Aveng Group, reporting R11.8bn in revenue for the six months to end December 2009 (December 2008: R11.5bn) and 76% of operating profit from 51% previously. The impact of the world economic slowdown, characterised by the declining steel price and subdued demand for steel, saw a 31% decrease in the Manufacturing and Processing's segment's revenue to R3.4bn whilst its operating profit margin fell to 3.6% from unsustainable levels of 10.5% previously. This was nevertheless an improvement on the second half performance in 2009

Construction and Engineering
The segment comprises South Africa and Africa's Grinaker-LTA and Engineering & Projects Company (E&PC) as well as Australasia and the Pacific Rims McConnell Dowell. Despite the difficult operating conditions in Australasia and the Pacific Rim, McConnell Dowell was responsible for just over half of the segment's revenue, contributing R6,5-billion to the total, a 3% increase. However, the company's operating margin decreased to 4,1%, driven by a combination of project costs and currency fluctuations. Going forward, McConnell Dowell is likely to benefit from large scale public infrastructure investment and has secured a R15,1-billion two-year order book.
The South African businesses reported a rise in operating margin to 4,6% from 2,9%. This followed management's internal initiatives and strategic alignment at Grinaker-LTA, which saw the company maintain revenue of R5-billion in an environment where contracts were delayed and building activity lacklustre. Grinaker-LTA anticipates that the operating environment will tighten, despite having secured a two-year order book amounting to R9,9-billion.
In line with the Group's philosophy of being a leader in infrastructure development, E&PC is leveraging its water capabilities at a time when an estimated one-quarter of the world's population is affected by water scarcity. The division's revenue declined to R388-million for the first half of financial year 2010, whilst project delays impacted negatively on operating profit. Notwithstanding, E&PC successfully completed the Trekkopje Desalination Plant in Namibia, the largest in sub-Saharan Africa, and will continue to pursue water and mineral processing opportunities.

Manufacturing and Processing
This segment comprises Aveng Manufacturing (Steeledale, Infraset, Lennings Rail Services and Duraset) and Trident Steel, reflecting results that were in line with the economic environment, which saw muted demand for steel and fabricated products. This directly impacted the operating performance of Steeledale, whose revenue contribution to Aveng Manufacturing dropped from 58% to 39%. Despite the 27% decline in revenue to R2-billion, operational efficiency and continued investments in automotive capacity saw Trident Steel's margins stabilise over the six months.
The renewed emphasis on operating efficiencies is expected to see improvements in this segment going forward, with the rate of margin recovery determined by the steel price and volume movements. Through the increase in automotive capacity at Trident Steel, The Aveng Group has positioned itself to benefit from the ramp up in local export vehicle production.

Opencast Mining
Despite a strengthening Rand, Moolmans increased revenue by 21% to R1,6-billion through increased business. Moolmans' growth reflects the benefits of a diversified group as two of the contracts secured in Zambia were a direct result of Grinaker-LTA's success on a shaft sinking project for the same client.

Outlook
Conditions in the industry are expected to remain tight over the rest of the year despite signs of the world slowly emerging from the economic crisis. Commenting on the prospective pipeline from the South African government's R846-billion infrastructure projects, Roger Jardine said: "the roll-out of this infrastructure plan will stimulate the economy and create employment as we have seen with the various World Cup projects. The awarding of public sector contracts will boost the industry as well. We look forward to the implementation of this plan and we intend competing rigorously for these projects. We are pleased that the Group's two-year order book has increased to R32,7-billion despite the slowdown in domestic infrastructure projects being implemented.
Grinaker-LTA's business is expected to be driven largely by the private sector, whilst the Australian construction company, McConnell Dowell, has shown a shift to more public sector projects. With the steel price anticipated to remain stable in the second half of the financial year, group revenues are likely to improve only marginally, driven, to an extent, by the Manufacturing & Processing segment.