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African Oxygen Limited - Press Release

Release Date: 29/04/2004 14:24:16      Code(s): AFX
AFRICAN OXYGEN LIMITED - PRESS RELEASE                                          
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    
foreign subsidiaries.                                                           
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    
services businesses."                                                           
"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."                         
Ends                                                                            
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                                             
                                                                                
                                                                                
                                                                                



                                        
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