Go Back Email this Link to a friend


Afx - Afrox - Audited Financial Results And Dividend Announcement For The Year

Release Date: 26/02/2009 15:22:03      Code(s): AFX
AFX - Afrox - Audited Financial Results And Dividend Announcement For The Year  
Ended 31 December 2008                                                          
AFRICAN OXYGEN LIMITED                                                          
(Incorporated in the Republic of South Africa)                                  
Registration number: 1927/000089/06                                             
ISIN: ZAE000067120                                                              
JSE code: AFX                                                                   
NSX code: AOX                                                                   
("Afrox" or "the Company" or "the Group")                                       
AUDITED FINANCIAL RESULTS AND DIVIDEND ANNOUNCEMENT FOR THE YEAR ENDED          
31 DECEMBER 2008                                                                
Comparable 12 month revenue up 18% to R5.7 billion                              
Comparable 12 month operating profit down 10% to R753 million                   
Comparable 12 month EPS down 11% to 133.7 cents per share                       
Final dividend of 25 cents per share declared, 67 cents per share for the year  
PERFORMANCE SUMMARY                                                             
For the year ended 31 December 2008 revenue increased by 18% to R5,7 billion and
operating profit declined by 10% to R753 million compared to the restated       
results for the twelve month period ended December 2007. Operating profit margin
dropped to 13% from 17% as a result of the difficult economic environment       
particularly in the fourth quarter. Accordingly net attributable profit of R412 
million, and earnings per share of 133,7 cents, were 11% lower.                 
Operating cash flow of R1 billion met expectations but the increase in net      
working capital was higher than planned, mainly as a result of higher inventory 
and trade receivable levels. Group gearing of 32% is acceptable at the peak of  
an investment cycle and EBITDA interest cover of 8 times is well above our      
minimum threshold.                                                              
BUSINESS REVIEW                                                                 
The year was one of consolidating actions initiated as a result of the strategic
review process and introducing a discipline of "today`s work today". Much work  
remains to be done on the journey to a High Performance Organisation but        
progress to-date has been satisfactory.                                         
This has undoubtedly been one of the most challenging years for Afrox. The      
global economic crisis, and the ensuing retreat in consumer-spending, is in     
chilling contrast to the effusiveness of recent times. World markets remain     
rudderless and no improvements are expected in the short to medium-term. The    
impact on South Africa has been rapid and overall economic activities have      
declined sharply. Afrox faced steadily deteriorating trading conditions during  
the second half, with the final quarter particularly depressed.                 
Afrox is the first chemicals JSE-listed company to achieve a Level 4 value      
adding status for its commitment to Broad Based Black Economic Empowerment. In  
line with the Department of Trade and Industry`s generic scorecard, this allows 
customers to claim 125% in BBBEE recognition on all goods and services purchased
from Afrox.                                                                     
Afrox secured a number of new customer wins. The carbon dioxide plant in        
Sasolburg and the Kuilsriver air separation as well as nitrogen liquefaction    
plants have now been commissioned. In addition to the capital expenditure,      
significant effort went into improving the reliability of the Company`s plants. 
Our African Operations achieved excellent results at good margin for the year,  
contributing a record 23% of group profits.                                     
DIVIDEND                                                                        
The Board has resolved to declare a final cash dividend of 25 cents per share   
(2007: 54 cents). Together with the interim cash dividend of 42 cents per share 
(2007: 46 cents), a total of 67 cents per share (2007: 100 cents) is paid for   
the year and is covered 2.0 times in earnings per share (2007: 1.9 times), which
is consistent with our guiding principals.                                      
OUTLOOK                                                                         
Our major capital investment programme has now been completed with the result   
that significantly reduced expenditure is anticipated for the immediate future. 
Focal points for 2009 include tighter working capital management, reducing      
overhead cost, minimising the cost and complexity of doing business, and        
preserving liquidity at a time when credit is tight. Our African operations are 
performing well but we expect deteriorating conditions towards the middle of the
year due to the impact of the lower commodity prices.                           
No improvement in trading conditions are expected before 2010, when the         
infrastructure build-up, lower inflation and the easing of interest rates will, 
hopefully, have stemmed job losses and steadied volumes. Until such time as     
general confidence returns, however, Afrox`s traditional customer base will     
remain under extreme pressure.                                                  
Kent Masters             Tjaart Kruger             26 February 2009             
Chairman                 Managing director         Johannesburg                 
NOTICE OF FINAL DIVIDEND DECLARATION NUMBER 165 AND SALIENT FEATURES            
Notice is hereby given that a cash dividend of 25 cents per ordinary share,     
being the final dividend for the year ended 31 December 2008, has been declared 
payable to all shareholders of African Oxygen Limited recorded in the register  
on Friday, 24 April 2009.                                                       
The salient dates for the declaration and payment of the final dividend are as  
follows:                                                                        
                                                 2009                           
Last day to trade ordinary shares "cum" dividend                                
                                                 Friday, 17 April               
Ordinary shares trade "ex" the dividend           Monday, 20 April              
Record date                                       Friday, 24 April              
Payment date                                      Tuesday, 28 April             
Share certificates may not be dematerialised or rematerialised between Monday,  
20 April 2009 and Friday, 24 April 2009, both days inclusive.                   
Note:                                                                           
In the event that the South African National Elections are confirmed for 22     
April 2009, a Public Holiday may be declared and the dividend timetable above   
would be impacted.  In such instance, Afrox would likely bring the Afrox branch 
register dividend dates forward by one day to Thursday, 16 April 2009 with      
respective ex dividend dates being changed to Friday, 17 April 2009.  The record
and payment dates would remain as stated above.                                 
By order of the board                                                           
Mlawuli Manjingolo                                    26 February 2009          
Company Secretary                                     Johannesburg              
CONDENSED CONSOLIDATED BALANCE SHEET                                            
                                               Audited      Audited             
                                                            Restated            
31 December  31 December         
Rm                                    Note      2008         2007               
ASSETS                                                                          
Property, plant and equipment         4         2 817        2 459              
Investment in associate                         14           12                 
Other non-current assets                        1 000        1 170              
Non-current assets                              3 831        3 641              
Inventories                                     845          684                
Trade and other receivables                     1 178        942                
Cash and cash equivalents                       143          96                 
Current assets                                  2 166        1 722              
Total assets                                    5 997        5 363              
EQUITY AND LIABILITIES                                                          
Shareholders` equity                            2 741        2 741              
Minority interest                               39           27                 
Total equity                                    2 780        2 768              
Long-term borrowings                            890          490                
Deferred tax liability                          519          465                
Non-current liabilities                         1 409        955                
Current portion of long-term loans              500          300                
Trade and other payables                        975          903                
Taxation payable                                48           106                
Bank overdraft                                  285          331                
Current liabilities                             1 808        1 640              
Total equity and liabilities                    5 997        5 363              
CONDENSED CONSOLIDATED INCOME STATEMENT                                         
                                               Audited      Audited             
                                                            Restated            
31 December  31 December         
                                               2008         2007                
Rm                                    Note      12 months    15 months          
Revenue                                         5 666        5 849              
Operating expenses                              (4 913)      (4 832)            
Operating profit                                753          1 017              
Net finance costs                               (121)        (89)               
Income from associates                          2            1                  
Profit before taxation                5         634          929                
Taxation                                        (207)        (341)              
Profit for the period                           427          588                
Attributable to:                                                                
Equity holders of the company                   412          578                
Minority interest                               15           10                 
Profit for the period                           427          588                
Basic and diluted earnings per share            133,7        187,5              
(cents)                                                                         
Dividend per share (cents)                                                      
Interim                                          42,0        54,0               
CONDENSED CONSOLIDATED CASH FLOW STATEMENT                                      
Audited      Audited             
                                                            Restated            
                                               31 December  31 December         
                                               2008         2007                
Rm                                              12 months    15 months          
Operating profit                                753          1 017              
Adjustments for:                                                                
Depreciation and amortisation                   257          254                
Other                                           (8)          73                 
Operating cash flow before working capital      1 002        1 344              
changes                                                                         
Working capital changes                         (337)        (350)              
Cash generated from operations                  665          994                
Finance costs and taxation paid                 (309)        (315)              
Other                                           (1)          (32)               
Cash available from operations                  355          647                
Dividends paid                                  (272)        (475)              
Net cash inflow from operating activities       83           172                
Acquisition of operations                        -           (132)              
Purchase of property, plant and equipment and   (603)        (987)              
intangibles                                                                     
Other net investing cash flows                  19           11                 
Net cash outflow from investing activities      (584)        (1 108)            
Payments to minorities                          (6)          (6)                
Increase in borrowings                          600          274                
Net cash inflow from financing activities       594          268                
Net increase/(decrease) in cash and cash        93           (668)              
equivalents                                                                     
Cash and cash equivalents at start of period    (235)        433                
Cash and cash equivalents at end of period      (142)        (235)              
EQUAL PERIOD COMPARISON OF CONSOLIDATED INCOME STATEMENT                        
                                               Audited      Unaudited           
Restated            
                                               31 December  31 December         
                                               2008         2007                
Rm                                              12 months    12 months          
Revenue                                         5 666        4 785              
Operating expenses                              (4 913)      (3 952)            
Operating profit                                753          833                
Net finance costs                               (121)        (83)               
Income from associates                          2            -                  
Profit before taxation                          634          750                
Taxation                                        (207)        (279)              
Profit for the period                           427          471                
Attributable to:                                                                
Equity holders of the company                   412          463                
Minority interest                               15           8                  
Profit for the period                           427          471                
Basic earnings per share (cents)                133,7        150,2              
RECONCILIATION OF PRIOR PERIODS` RESULTS DUE TO CHANGES IN                      
ACCOUNTING POLICIES                                                             
Changes in accounting policies                                                  
As a result of the change in accounting policies the published accounts for the 
Group and Company for the fifteen months ended 31 December 2007 had to be       
restated. These restated income statements and balance sheets show the original 
reported numbers and the effect of the changes.                                 
Adoption of IFRIC 14 - The Limit on a Defined Benefit Asset, Minimum Funding    
Requirements and their interaction                                              
IFRIC 14 - "IAS 19 - The Limit on a Defined Benefit Asset. Minimum Funding      
Requirements and their Interaction" provides guidance regarding when refunds or 
reductions in future contributions should be regarded as available, how a       
minimum funding requirement might affect the availability of reductions in      
future contributions and when a minimum funding requirement might give rise to a
liability. The guidance provided by IFRIC 14 is effective for annual periods    
beginning on or after 1 January 2008 and therefore Afrox have applied the       
interpretations guidance in determining the extent to which the pension fund    
surplus could be recognised at 31 December 2008. In accordance with the         
requirements this change in policy has been applied on a retrospective basis    
with comparative numbers being restated.                                        
IAS 39 - Financial Instruments: Recognition & Measurement change in accounting  
for LPG cylinder deposits                                                       
Historically the accounting treatment adopted by Afrox has been to recognise the
liability for LPG cylinder deposits on the balance sheet as a provision.        
Consequently the total liability has been historically recognised based on      
historical trends and data supporting the fact that only 25% of LPG cylinders   
are returned by customers for refund. During the current financial year the     
International Financial Reporting Interpretations Committee ("IFRIC") raised the
issue regarding whether deposits on returnable containers were in fact financial
liabilities and provided clarity regarding the accounting treatment thereof.    
Based on the clarity provided by the IFRIC, Afrox concluded that the            
classification of this obligation as a financial liability on the balance sheet 
better reflected the underlying nature of the liability. This change has been   
accounted for as a change in accounting policy and has been applied on a        
retrospective basis.                                                            
BALANCE SHEET                                                                   
                                                           Restated             
                          Audited                          unaudited            
                          as at 31                         as at 31             
Rm                         December     IFRIC 14 IAS 39     December            
                          2007         effect   change     2007                 
Assets                                                                          
Non-current assets         3 296        345      -          3 641               
Current assets             1 722        -        -          1 722               
                          5 018        345      -          5 363                
Equity and liabilities                                                          
Capital and reserves       2 561        245      (38)       2 768               
Non-current liabilities    869          100      (14)       955                 
Current liabilities        1 588        -        52         1 640               
Total equity and           5 018        345      -          5 363               
liabilities                                                                     

INCOME STATEMENT                                                                
                                                           Restated             
                          Audited                          unaudited            
for the 15                       for the 15           
                          months                           months               
                          ended                            ended                
Rm                         December     IFRIC 14 IAS 39     December            
2007         effect   change     2007                 
Revenue                    5 849        -        -          5 849               
Operating profit           1 052        -        (35)       1 017               
Net finance expense        (89)         -        -          (89)                
Income from associate      1            -        -          1                   
Profit before taxation     964          -        (35)       929                 
Income tax expense         (350)        -        9          (341)               
Profit for the period      614          -        (26)       588                 
Attributable to:                                                                
Equity holders of the      604          -        (26)       578                 
company                                                                         
Minority Interest          10           -        -          10                  
Profit for the period      614          -        (26)       588                 
Basic and diluted          195.5        -        (8.0)      187.5               
earnings per ordinary                                                           
share - (cents)                                                                 
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY                           
                     Share                                                      
                     capital                                                    
Rm                    and        Other      Retained   Minority   Total         
share      reserves   earnings   interest                  
                     premium                                                    
Balance at            552        158        1 572      23          2 305        
1 October 2006                                                                  
Change in accounting  -          242        (12)       -           230          
policy                                                                          
Restated opening      552        400        1 560      23         2 535         
balances                                                                        
Other movements        -          50         76         -          126          
Profit for the         -          -          578       10          588          
period                                                                          
Dividends paid         -          -          (475)      (6)        (481)        
Balance at 31         552        450        1 739      27         2 768         
December 2007                                                                   
                                                                                
Balance at 1 January  552        450        1 739      27          2 768        
2008                                                                            
Other movements        -         (140)                  3          (137)        
Profit for the         -          -          412        15         427          
period                                                                          
Dividends paid         -          -          (272)      (6)        (278)        
Balance at            552        310        1 879      39          2 780        
31 December 2008                                                                
GEOGRAPHIC SEGMENTS                                                             

                                          South      Rest of                    
Rm                                         Africa     Africa      Total         
Twelve months ended 31 December 2008                                            
- revenue                                   4 869      797         5 666        
- profit before income tax                  577       176          753          
Fifteen months ended 31 December 2007                                           
- revenue                                   5 111     738          5 849        
- profit before income tax                  855        162         1 017        
NOTES TO THE FINANCIAL STATEMENTS                                               
1. FINANCIAL PERIOD                                                             
In the prior year, Afrox changed its year end to December to align itself with  
the financial year end of its holding company, Linde AG.  The comparative       
financial year ended on 31 December 2007 and covered fifteen months, therefore  
no percentage variances are reported. The year end results hereby presented are 
for twelve months ended 31 December 2008.                                       
2. STATEMENT OF COMPLIANCE AND ACCOUNTING POLICIES                              
These condensed year end group financial statements have been prepared in       
accordance with the recognition and measurement of International Financial      
Reporting Standards (IFRS), and are in compliance with IAS 34: presentation and 
disclosure Interim Financial Reporting, the JSE Limited`s Listing Requirements  
and in the manner required by the South African Companies Act.                  
The accounting policies applied are consistent with those followed in the       
preparation of the consolidated annual financial statements for the year ended  
31 December 2007, except where the group has adopted new or revised IFRS        
statements.                                                                     
The group has adopted the following new or revised accounting pronouncement in  
the current period, which did not have a material impact on the reported        
results:                                                                        
IFRS 7: Financial Instruments: Disclosure and IFRIC Interpretation 14: The Limit
on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction. 
3. AUDIT OPINION                                                                
The independent auditors, KPMG Inc., have issued their opinion on the Group`s   
financial statements for the year ended 31 December 2008.  A copy of their      
unqualified audit report is available for inspection at the Company`s registered
office.                                                                         
Audited       Audited            
                                                             Restated           
                                               31 December   31 December        
                                               2008          2007               
Rm                                           12 months     15 months          
4. Capital expenditure and commitments                                          
  Property, plant and equipment                                                 
  Opening carrying value                       2 459         1 928              
Additions                                    540           781                
  Disposals                                    (2)           (17)               
  Depreciation                                 (231)         (251)              
  Acquisition of business                      -             24                 
Exchange loss and other movements            51            (6)                
  Closing carrying value                       2 817         2 459              
  Capital commitments                                                           
   - authorised but not committed               -            1                  
- authorised and committed                  47            494                
  Total capital commitments                    47            495                
5. Profit before taxation                                                       
  Included in profit before taxation are:                                       
Amortisation of intangible assets            26            3                  
  Depreciation                                 231           251                
STATISTICS AND RATIOS                                                           
                                           Audited        Audited               
Restated              
                                           31 December    31 December           
                                           2008           2007                  
Rm                                          12 months      15 months            
Basic and diluted earnings per ordinary     133,7          187,5                
share - Group (cents)                                                           
Headline earnings per ordinary share -      133,5          188,9                
Group (cents)                                                                   
Average number of shares in issue during    308 568        308 568              
the period (`000)                                                               
Shares in issue at end of period (`000)     308 568        308 568              
Dividends per share (cents) (excl special)  67,0           100,0                
Net asset value per share (cents)           782            730                  
                                                                                
RATIOS                                                                          
Operating margin (%)                        13,3           17,4                 
Interest cover (times)                      6,2            11,4                 
Effective tax rate (%)                      32,6           36,7                 
Gearing (%)                                 31,7           24,1                 
Dividend cover (times)                      2,0            1,9                  
Registered office: Afrox House, 23 Webber Street, Selby, Johannesburg 2001. PO  
Box 5404, Johannesburg 2000. Telephone +27 (0) 11 490-0400.                     
Transfer secretaries: Computershare Investor Services (Pty) Limited,            
70 Marshall Street, Johannesburg 2001. PO Box 61051, Marshalltown 2107.         
Telephone: +27 (0) 11 370-5000.                                                 
Sponsor in South Africa: Barnard Jacobs Mellet Corporate Finance (Pty) Limited. 
Sponsor in Namibia: Namibia Equity Brokers (Pty) Limited.                       
Directors:  JK Masters* (Chairman), TN Kruger (Managing director),              
DM Lawrence, M Malebye, DK Mokhele, J Nowicki**, K Oliver, SM Pityana,          
LL van Niekerk, CJPG van Zyl (Financial director), AM Watkins***                
*American    **German     ***British                                            
Company secretary:  M Manjingolo                                                
www.afrox.com                                                                   
Afrox is a member of The Linde Group                                            
Date: 26/02/2009 15:22:02 Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                             .                  
The SENS service is an information dissemination service administered by the    
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or            
implicitly, represent, warrant or in any way guarantee the truth, accuracy or   
completeness of the information published on SENS. The JSE, their officers,     
employees and agents accept no liability for (or in respect of) any direct,     
indirect, incidental or consequential loss or damage of any kind or nature,     
howsoever arising, from the use of SENS or the use of, or reliance on,          
information disseminated through SENS.                                          



                                        
Email this JSE Sens Item to a Friend.

Send e-mail to
© 2017 SHARENET (PTY) Ltd, Cape Town, South Africa
Home     Terms & conditions    Privacy Policy
    Security Notice    Contact Details
Market Statistics are calculated by Sharenet and are therefore not the official JSE Market Statistics. The calculation/derivation may include underlying JSE data.