* Group 2-year order book increased to 31.3 billion rand
* Total project pipeline stable at 100 billion rand
* H1 2010 to reflect tougher trading environment
* Shares gain, outpace firmer bourse (Adds analyst comment, details)
By Serena Chaudhry
JOHANNESBURG, Oct 23 (Reuters) - Africa's second-biggest construction group Aveng Ltd expects its performance in the first half of 2010 to be worse than 2009 as trading conditions remain tough, it said on Friday.
The South African World Cup stadium builder said volumes in its steel manufacturing and processing business had stabilised, but said the continued strength of the rand currency would hurt foreign earnings.
Aveng's two-year order book at end-September rose to 31.3 billion rand ($4.21 billion) from 30.4 billion rand at end-June, while its total project pipeline was stable at 100 billion rand.
"In terms of the order book, it was quite positive, being up 3 percent. The worry for me is that about 50 percent of their profits is non-South African based, so there could be some pressure, just given the foreign currency strength," said Suzie Haywood, infrastructure analyst at RMB Asset Management.
"On the steel side, their quarter one was extremely strong, so it will be quite hard for them to match that base in the first quarter of 2010. All in all, I think there could be some pressure on the first-half earnings."
The rand has gained about 25 percent against the dollar so far this year, raising concerns that its impact on exporters could delay recovery from the country's first recession in 17 years.
MORE CONTRACTS
Aveng's shares gained almost 3 percent, and rose 1.62 percent to 42.54 rand by 1146 GMT, outperforming a slightly firmer JSE Mid-cap index.
Construction continues to be the best-performing sector in South Africa, bolstered by a government infrastructure spending programme and preparations for the 2010 soccer World Cup, for which Aveng's Soccer City stadium will host the final.
Aveng said it was granted an extension of its contract at Two Rivers Platinum mine for 360 million rand, while Moolmans, which is 75 percent owned by Aveng, secured a two-year opencast gold mining contract at Sadiola in Mali.
Grinaker-LTA, in which Aveng has a 75 percent stake, was awarded a 350 million rand contract to build a hospital in the Western Cape province and a 320 million rand contract for chimneys and silos for the Medupi power station.
Aveng's unit McConnell Dowell won several contracts, including a 420 million rand contract to construct marine facilities on the Sino Iron Project in Hong Kong and the Singapore International Cruise Terminal on Jurong Island.
However, Aveng said the South African market was still being hit by delays in contract awards, particularly in the public sector.
It posted a drop in first-half profit in September as a global credit crunch dried up funds for new deals in the public and private construction sectors. (Editing by Rupert Winchester)