African Oxygen Limited - Press Release Release Date: 29/04/2004 14:24:16 Code(s): AFX
AFRICAN OXYGEN LIMITED - PRESS RELEASE
29 APRIL 2004
African Oxygen Limited
(Incorporated in the Republic of South Africa).
Registration number: 1927/000089/06.
ISIN: ZAE000030920. South African share code: AFX. Namibian share code: AOX.
("Afrox" or "the Company").
AFROX POSTS 21% GROWTH IN NET PROFIT
PERFORMANCE IS GOOD IN DIFFICULT TRADING CONDITIONS
In a difficult economy, African Oxygen Limited (Afrox) performed well during the
six months to 31 March 2004 with an increase in net profit of 21 percent at R305
million (2003: R252 million) and headline earnings per share up 15 percent to
89,9 cents (2003: 78,4 cents).
Afrox concentrated on protecting market share and improving its market position
in most sectors, although the strength of the rand impacted on manufacturing
output, the mining industry and on Afrox"s export revenues and earnings from
Industrial & Special Products experienced a decrease in the selling price of
Handigas due to the lower rand price of oil and a consequent reduction in the
selling price of petroleum products. Operating margins nevertheless improved.
Process Gas Solutions maintained its market share and posted strong results
considering the economic climate.
Chief executive, Rick Hogben, said, "The difficult trading conditions that
prevailed during the six months impacted on group revenue which increased by 4
percent. On a segmental basis, our industrial business was particularly
affected with a decrease in revenue of 3 percent. But improvement in cost
management and efficiencies led to a 19 percent increase in net profit,
demonstrating our ability to manage costs, increase efficiencies and produce
acceptable results in challenging times. Healthcare"s revenue increased by 9
percent, due to sustained utilisation levels in the hospitals and healthcare
"Although the manufacturing and mining industries were depressed, Afrox is a
resilient company that manufactures and supplies products and services to many
other sectors, including hospitality, medical gases and, retail sales through
its national network of retail sales outlets. The company also benefits from
long term bulk gas contracts and annuity rental of cylinders," said Hogben.
Stringent cost containment and efficiency measures assisted the industrial
business in contributing 68 percent of the segmental group net profit whilst
healthcare contributed 32 percent.
Referring to the sale of Afrox Healthcare, Hogben confirmed that the Competition
Commission had recommended that the sale of its 69 percent shareholding to
Business Venture Investments (Pty) Ltd (Bidco), a BEE consortium, be approved
subject to certain conditions. Approval by the Competition Tribunal is the
final outstanding condition precedent for the acquisition by Bidco of all the
shares in Afrox Healthcare. Once this approval has been obtained, the Board
will consider the distribution of the proceeds to shareholders.
Afrox"s results show Afrox Healthcare as a fully consolidated subsidiary, but
with the impending sale of its healthcare interests, the results have also been
segmented into `continuing operations" representing Afrox"s industrial
interests, and `discontinuing" representing Afrox"s healthcare interest, due to
the potential sale of Afrox Healthcare. This year the interim dividend is
derived from the `continuing" operations only. Shareholders will receive a
dividend of 33 cents (2003: 33 cents).
Referring to the future, Hogben said, "While Afrox sustained profit growth
during the first half of the financial year, the uncertain domestic and
international economic climate makes it unwise to predict future performance,
beyond that we expect cash flow to remain strong and profits for the full year
to exceed those of last year on a like for like basis."
Issued by African Oxygen Limited
For further information
Chris Fieldgate (011) 490 0430 or 082 495 1481
Ros Beart (011) 490 0712 or 082 891 5149
Date: 29/04/2004 02:24:20 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department