Go Back Email this Link to a friend


African Oxygen Limited - Interim Financial Results And Dividend Declaration For The Six Months Ended 30 June 2017

Release Date: 08/09/2017 07:05:00      Code(s): AFX     
Corporate information
African Oxygen Limited
(Incorporated in the Republic of South Africa)
Registration number: 1927/000089/06
ISIN: ZAE000067120 JSE code: AFX
NSX code: AOX

INTERIM FINANCIAL RESULTS AND DIVIDEND DECLARATION
for the six months ended 30 June 2017

Financial features
Revenue
Up by 6.8%
R2 795 million

EBITDA
Up by 10.5%
R578 million

Headline earnings per share
Up by 22%
93.3 cents per share

Commentary
Performance Highlights
During the six months under review, Afrox managed to increase both revenue and Earnings before interest, tax and depreciation
(EBITDA) as a result of an increase in volumes, recovery of cost inflation from pricing and continued effective cost
containment.

As a result of the improvement in volumes in certain sectors of the business, revenue increased by 6.8% to R2 795 million
(2016: R2 616 million). The growth in revenue was achieved despite the continued weakness in the South African economy. The
volume improvement, supported by effective cost management, led to an increase of 10.5% in EBITDA to R578 million (2016: R523
million).

The EBITDA margin improved by 70 basis points (bps) to 20.7% (2016: 20%). The improvement in EBITDA contributed to headline
earnings per share increasing by 22% to 93.3 cents (2016: 76.5 cents), and basic earnings per share increasing by 21% to 94.4
cents (2016: 77.8 cents).

The improvement in profitability and the continued focus on balance sheet optimisation resulted in a net cash position of
R194 million (December 2016: R153 million). Capital expenditure of R169 million (2016: R146 million) is in line with prior
years, and reflects the lack of growth in demand in the current economic climate and the adequate production capacity of the
Group.

Return on capital employed improved by 380 bps to 22.4% (2016: 18.6%) from higher profits and asset optimisation.

Business review
Atmospheric Gases
Overall revenue increased by 8.3% compared to 2016 as a result of volume growth in most sectors, combined with effective
price management. The growth in revenue was achieved, despite difficult economic conditions, as a result of leveraging the
unique Afrox offering from a broad range of innovative products and solutions. New and regained business demonstrated Afrox's
ability to successfully compete in its core segment. Within Industrial Gases (acetylene, oxygen, nitrogen and argon), the
demand for our bulk products was above the comparative period, resulting in increased volumes in most sectors.
On-site revenue increased from new business and expansion at existing customers, despite the impact of major plant outages.
Packaged Gases volumes were at prior-year levels, with small recoveries in demand for oxygen for various applications. The
successful introduction of Afrox's new cylinder management system "Track & Trace" and the implementation of more effective
pricing management, resulted in an improvement in revenue compared to the comparative period. The growth in Medical Gases
revenue was as a result of Afrox's strong combined product and service offering and tailor-made solutions for the increasing
demand in the public and private hospital sector, as well as the growing Homecare market. Hospitality Gases and Special Gases
experienced reduced revenue due to volume decline in some areas. Carbon dioxide (CO2) bulk supply was constrained due to
limited product availability at our major source, resulting in supply shortages to large customers.

Gross profit after distribution expenses (GPADE) margins further improved from efficiencies in operations and distribution.
Improved cost recoveries across most businesses, coupled with the contribution from higher volumes, resulted in the 130 bps
improvement in margin.

LPG
Effective cost management, combined with our efficient Liquefied Petroleum Gas (LPG) supply chain, resulted in strong GPADE
levels, with an underlying margin of 20.3%. Adjusted for the change in market prices, GPADE remained at R184 million. Total
volumes sold increased by 7% compared to the same period last year, demonstrating Afrox's ability to grow the market.
Increased production from local refineries and an increase in imported products resulted in increased volumes sold. This
ability to reduce supply constraints in the domestic market, as a direct result of increased imports, combined with a strong
sales offering in various segments of our customer base, further improved Afrox's position in the African LPG market.

Revenue grew by 11.2%, or 6.3% at comparable LPG market prices. The investment in additional LPG cylinders added to this
positive development and enabled renewed focus on the domestic and hospitality markets. Afrox focuses on efficient supply of
LPG for various applications and industry sectors, which results in a very reliable, environmentally friendly and cost-
effective alternative source of energy. The investments of the past years significantly reduced the supply constraints
throughout the regions.

GPADE decreased marginally by 0.5% to 19.4% or 20.3% at comparable LPG market prices. LPG inventory revaluation at the end of
the reporting period resulted in the reduced margins. The segment profitability is a result of continued efforts throughout
the supply chain and improved price cost recovery. This is the prerequisite for future volume growth while maintaining
industry-leading service levels. The final report from the Competition Commission of South Africa (Competition Commission)
was issued in March 2017. Afrox continues to cooperate with, and is in the process of, introducing the recommendations of the
Competition Commission.

Hard Goods
Total revenue increased by 1.4% compared to 2016 due to improved pricing and business retention with underlying growth in our
premium product ranges. Volumes in welding and gas equipment are still being negatively impacted by the continued downturn in
mining, iron and steel and manufacturing. The Afrox Gas Equipment business volumes reduced further compared to 2016,
reflecting lower economic activity.

Various initiatives to strengthen supply, production and logistics, in particular the outsourcing of our Gas Equipment
production facility; the continued focus on overseas exports (coupled with strong focus on cost containment); and improved
price management, integrated offer of Hard Goods, welding consumables and welding gases as well as the required technical
know-how and safety requirements, stabilised the overall business. This led to top line growth in difficult market
conditions.

GPADE: The reported improvement of 480 bps to 38.7% GPADE margin is a result of higher efficiencies and improved price cost
recovery. The focus on key products and the leveraging of the reputation of the Afrox Hard Goods product offering were key
achievements during the reporting period.

The business segment experienced steep declines in GPADE and revenue in 2016. Continued investment in innovation and the
introduction of new applications demonstrate the tangible benefits this brings to sub-Saharan Africa and the key players in
the respective sectors.

Emerging Africa
Underlying revenue grew by 3% to R394 million from improved pricing. Adverse effects from currency translation and LPG market
price changes of R18 million resulted in reported revenue reducing by 2% compared to 2016. For the reporting period, Emerging
Africa was confronted with continued weaker economic conditions and the lack of investment in infrastructure projects. This
negatively impacted sales volumes in the majority of geographies. Initial supply constraints during Quarter 1 2017 for LPG
and CO2, from South Africa into our Emerging African subsidiaries further impacted sales volumes.

Despite the headwinds, Malawi, Mozambique and Botswana managed to achieve underlying top line growth. However, sales volumes
in Zambia remain under pressure due to lower economic growth.

Underlying GPADE, excluding currency effects, increased by 90 bps compared to June 2016 to R183 million. This was achieved
mainly as a result of improved price cost recovery and the initial implementation of our group wide SWIFT programme, allowing
the business to benefit from proven cost reduction and operational efficiency measures.

Emerging Africa continues to invest in its combined product offering of Industrial Gases, Hard Goods and the reliable supply
from its established position in the LPG market.

BOARD OF DIRECTORS
Sue Graham Johnston resigned as Chairperson with effect from 1 September 2017 and Bernd Eulitz was reappointed as Chairman
with effect from 1 September 2017. Dorian Devers resigned as Chief Financial Officer (CFO) and Executive Director on 9 May
2017. The Board would like to express their gratitude to Ms Johnston and Mr Devers for their valuable contribution to Afrox.

Matthias Vogt was appointed as CFO and Executive Director with effect from 1 August 2017.

Nolitha Fakude was appointed as a non-executive director with effect from 1 March 2017.

DIVIDEND
It is the Company's policy to consider dividends bi-annually. The Board has declared a cash dividend of 46.0 cents per share
(2016: 38.0 cents), declared out of the after-tax profits for the six months ended 30 June 2017. Based on Afrox's policy, the
dividend is covered two times by headline earnings per share.

OUTLOOK
The South African economic environment is expected to remain weak in the foreseeable future, with Emerging Africa impacted by
lower economic growth and lack of investment in infrastructure projects. Despite the economic headwinds, Afrox will continue
its endeavours to develop specific growth opportunities in Atmospheric Gases and LPG and to focus on recovery of cost
inflation plus various initiatives to improve productivity.

Bernd Eulitz        Schalk Venter        8 September 2017
Chairman            Managing Director    Johannesburg

NOTICE OF INTERIM DIVIDEND DECLARATION NUMBER 181 AND SALIENT FEATURES
Notice is hereby given that a gross cash dividend of 46.0 cents per ordinary share, being the interim dividend for the six
months ended 30 June 2017, has been declared payable to all shareholders of Afrox recorded in the register on Friday, 
6 October 2017.

The salient dates for the declaration and payment of the interim dividend are as follows:

Last day to trade ordinary shares 'cum' dividend        Tuesday, 3 October 2017
Ordinary shares trade 'ex' the dividend                 Wednesday, 4 October 2017
Record date                                             Friday, 6 October 2017
Payment date                                            Monday, 9 October 2017

Shares may not be dematerialised or rematerialised between Wednesday, 4 October 2017 and Friday, 6 October 2017, both days
inclusive.

The local net dividend amount is 36.8 cents (2016: 32.3 cents) per share for shareholders liable to pay Dividends Tax and
46.0 cents (2016: 38.0 cents) per share for shareholders exempt from Dividends Tax.

In terms of the Dividends Tax, the following additional information is disclosed:
- The dividend has been declared out of income reserves.
- The local Dividends Tax rate is 20% (2016: 15%), subject to double tax agreement.
- Afrox currently has 308 567 602 ordinary shares (excluding treasury shares of 34 285 308) in issue.
- Afrox's income tax reference number is 9350042710.

By order of the Board

Cheryl Singh              8 September 2017
Company Secretary         Johannesburg

Forward-looking statements disclaimer: This results review contains statements related to our future business and financial
performance and future events or developments involving Afrox that may constitute forward-looking statements. Such statements
are based on current expectations and certain assumptions of Afrox's management are therefore subject to certain risks and
uncertainties. A variety of factors, many of which are beyond Afrox's control, affect our operations, performance, business
strategy and results and could cause the actual results, performance or achievements of Afrox to be materially different from
any future results, performance or achievements that may be expressed or implied by such forward-looking statements or
anticipated on the basis of historical trends. Forward-looking statements are the responsibility of the Board of Directors of
Afrox.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Condensed consolidated interim statement of financial position
as at 30 June 2017

R'million                                                                             Note      30 June    30 June  31 December
                                                                                                   2017       2016         2016
                                                                                               reviewed   reviewed      audited
ASSETS
Property, plant and equipment                                                            4        2 945      2 935        2 952
Retirement benefits assets                                                                          439        503          406
Deferred taxation asset                                                                              14         17           15
Lease receivables                                                                                    71         81           72
Other non-current assets                                                                             47         51           52
Non-current assets                                                                                3 516      3 587        3 497
Inventories                                                                                         610        574          611
Trade and other receivables                                                                       1 138      1 068        1 044
Lease receivables                                                                                    12         16           16
Derivative financial instruments                                                                      1          -            -
Receivables from fellow subsidiaries of holding company                                              90         58           66
Taxation receivable                                                                                  53        107           38
Cash and cash equivalents                                                                         1 194        757        1 175
Assets held for sale                                                                                  -        119            -
Current assets                                                                                    3 098      2 699        2 950
Total assets                                                                                      6 614      6 286        6 447
EQUITY AND LIABILITIES
Equity holders of the parent company                                                              3 804      3 451        3 657
Non-controlling interests                                                                            33         40           27
Total equity                                                                                      3 837      3 491        3 684
Long-term borrowings                                                                                400      1 000        1 000
Other long-term financial liability                                                                  24          -           26
Deferred taxation liability                                                                         571        569          553
Non-current liabilities                                                                             995      1 569        1 579
Provisions                                                                                           15         51           16
Trade, other payables and financial liabilities                                                   1 095      1 047        1 049
Taxation payable                                                                                     21         14           26
Payables to fellow subsidiaries of holding company                                                   51        104           60
Derivative financial instruments                                                                      -         10           11
Short-term portion of long-term borrowings                                                          600          -            -
Bank overdrafts                                                                                       -          -           22
Current liabilities                                                                               1 782      1 226        1 184
Total equity and liabilities                                                                      6 614      6 286        6 447

Condensed consolidated interim income statement
for the period ended 30 June 2017
R'million                                                                                       30 June    30 June  31 December
                                                                                                   2017       2016         2016
                                                                                               6 months   6 months    12 months
                                                                                               reviewed   reviewed      audited
Revenue                                                                                           2 795      2 616        5 537
Operating expenses                                                                               (2 217)    (2 093)      (4 300)
Earnings before interest, taxation, depreciation,
amortisation and impairments (EBITDA)                                                               578        523        1 237
Depreciation and amortisation                                                                      (179)      (185)        (379)
Impairment of tangible assets                                                                         -          -          (10)
Earnings before interest and taxation (EBIT)                                                        399        338          848
Finance expense                                                                                     (53)       (56)        (112)
Finance income                                                                                       66         57          126
Income from associate net of tax                                                                      -          1            2
Profit before taxation                                                                              412        340          864
Taxation                                                                                           (116)       (96)        (264)
Profit for the period                                                                               296        244          600
Attributable to:
Owners of the Company                                                                               291        240          597
Non-controlling interests                                                                             5          4            3
Profit for the year                                                                                 296        244          600
Earnings per share - cents
Basic and diluted earnings per ordinary share - cents                                              94.4       77.8        193.3

Condensed consolidated interim statement of comprehensive income
for the period ended 30 June 2017
R'million                                                                                       30 June    30 June  31 December
                                                                                                   2017       2016         2016
                                                                                               6 months   6 months    12 months
                                                                                               reviewed   reviewed      audited
Profit for the period                                                                               296        244          600
Other comprehensive income                                                                           41        (73)        (106)

Items that are or may be reclassified to profit or loss                                              28        (32)         (51)
Translation differences on foreign operations                                                        25        (25)         (43)
Translation differences relating to non-controlling interests                                         1         (1)          (4)
Cash flow hedges - effective portion of changes in fair value (net of taxation)                       2         (6)          (4)
Items that will never be reclassified to profit or loss                                              13        (41)         (55)
Actuarial gains/(losses) on defined-benefit funds (net of taxation)                                  13        (41)         (55)


Total comprehensive income for the period                                                           337        171          494
Total comprehensive income attributable to:
Owners of the Company                                                                               331        168          495
Non-controlling interests                                                                             6          3           (1)
                                                                                                    337        171          494

Condensed consolidated interim statement of cash flows
for the period ended 30 June 2017
R'million                                                                                       30 June    30 June  31 December
                                                                                                   2017       2016         2016
                                                                                               6 months   6 months    12 months
                                                                                               reviewed   reviewed      audited
Earnings before interest and taxation (EBIT)                                                        399        338          848
Adjustments for:
Depreciation, amortisation and impairments                                                          179        185          389
Other non-cash movements                                                                            (24)        (5)         (67)
Operating cash flows before working capital adjustments                                             554        518        1 170
Working capital adjustments                                                                        (131)      (206)         (11)
Cash generated from operations before restructuring costs                                           423        312        1 159
Restructuring costs paid                                                                              -        (17)         (60)
Cash generated from operations                                                                      423        295        1 099
Interest paid                                                                                       (51)       (57)        (104)
Interest received                                                                                    31         22           38
Taxation paid                                                                                      (124)       (86)        (177)
Dividends received                                                                                    -          -            1
Cash available from operating activities                                                            279        174          857
Dividends paid to owners of the parent                                                             (173)      (157)        (275)
Dividends to non-controlling interests                                                                -          -           (9)
Net cash inflow from operating activities                                                           106         17          573
Additions to property, plant and equipment                                                         (169)      (146)        (379)
Intangible assets acquired                                                                           (1)        (2)         (10)
Proceeds from disposal of property, plant and equipment                                              93         21           84
Other investing activities                                                                           12         15           33
Net cash outflow from investing activities                                                          (65)      (112)        (272)
Net increase/(decrease) in cash and cash equivalents                                                 41        (95)         301
Cash and cash equivalents at the beginning of the period                                          1 153        852          852
Cash and cash equivalents at the end of the period                                                1 194        757        1 153

Condensed consolidated interim statement of changes in equity
for the period ended 30 June 2017
R'million                                                                            Share    Incentive  FCTR* and    Actuarial  Retained         Non-   Total
                                                                                   capital       scheme    hedging       gains/  earnings  controlling  equity
                                                                                 and share    share and   reserves     (losses)              interests
                                                                                   premium  share-based
                                                                                                payment
                                                                                               reserves
Balance at 1 January 2016                                                              552            -        (50)         317     2 612           37   3 468
Total comprehensive income                                                               -            -        (31)         (41)      240            3     171
Profit for the period                                                                    -            -          -            -       240            4     244
Other comprehensive income, net of taxation                                              -            -        (31)         (41)        -           (1)    (73)
Transactions with owners
Forfeited share-based payments                                                           -          (20)         -            -        20            -       -
Share-based payments, net of taxation                                                    -            9          -            -         -            -       9
Dividends                                                                                -            -          -            -      (157)           -    (157)
Balance at 30 June 2016                                                                552          (11)       (81)         276     2 715           40   3 491
Balance at 1 January 2016                                                              552            -        (50)         317     2 612           37   3 468
Total comprehensive income                                                               -            -        (47)         (55)      597           (1)    494
Profit for the period                                                                    -            -          -            -       597            3     600
Other comprehensive income, net of taxation                                              -            -        (47)         (55)        -           (4)   (106)
Share-based payments, net of taxation                                                    -            6          -            -         -            -       6
Forfeited shares                                                                         -          (11)         -            -        11            -       -
Dividends                                                                                -            -          -            -      (275)          (9)   (284)
Transfer to retained earnings                                                            -            5          -         (262)      257            -       -
Balance at 31 December 2016                                                            552            -        (97)           -     3 202           27   3 684
Balance at 1 January 2017                                                              552            -        (97)           -     3 202           27   3 684
Total comprehensive income                                                               -            -         27            -       304            6     337
Profit for the year                                                                      -            -          -            -       291            5     296
Other comprehensive income, net of taxation                                              -            -         27            -        13            1      41
Transactions with owners
Share-based payments, net of taxation                                                    -            -          -            -       (11)           -     (11)
Dividends                                                                                -            -          -            -      (173)           -    (173)
Balance at 30 June 2017                                                                552            -        (70)           -     3 322           33   3 837

* Foreign currency translation reserve.

Segmental report
for the period ended 30 June 2017
Business segments are identified on the basis of internal reports that are regularly reviewed by the Group's and Company's
chief operating decision making body, the executive directors, in order to allocate resources to the segment and assess its
performance. The performance of the segments is managed and evaluated using revenue and gross profit after distribution
expenses only. Assets and liabilities are centrally managed at a corporate level and therefore not used in the decision to
allocate resources to operating segments. Segments have been determined based on business segments: Atmospheric Gases, LPG,
Hard Goods and Emerging Africa.

R'million                                          30 June   30 June  31 December
                                                      2017      2016         2016
                                                  6 months  6 months    12 months
                                                  reviewed  reviewed      audited
Revenue*                                             2 795     2 616        5 537
Atmospheric Gases                                    1 131     1 044        2 319
LPG                                                    947       852        1 797
Hard Goods                                             341       336          666
Emerging Africa                                        376       384          755
Gross profit after distribution expenses (GPADE)       856       796        1 775
Atmospheric Gases                                      378       335          868
LPG                                                    184       185          369
Hard Goods                                             132       114          232
Emerging Africa                                        162       162          306
Reconciliation of GPADE to EBIT
GPADE for business segments                            856       796        1 775
Other operating expenses                              (457)     (458)        (917)
Impairments (Emerging Africa)                            -         -          (10)
Earnings before interest and taxation (EBIT)           399       338          848
Geographical representation
Revenue                                              2 795     2 616        5 537
South Africa                                         2 419     2 232        4 782
Emerging Africa^                                       376       384          755
Non-current assets                                   3 516     3 587        3 497
South Africa                                         3 283     3 382        3 242
Emerging Africa^                                       233       205          255

* Revenue from external customers.
^ The revenue and non-current assets foreign country geographical split has been aggregated as Emerging Africa.
  The individual amounts are considered to be immaterial.

Statistics and ratios
for the period ended 30 June 2017
                                                             30 June   30 June  31 December
                                                                2017      2016         2016
                                                            6 months  6 months    12 months
                                                            reviewed  reviewed      audited
Average number of shares in issue during the period ('000)   308 568   308 568      308 568
Shares in issue ('000)                                       308 568   308 568      308 568
Dividends per share (cents)                                     46.0      38.0         94.0
Final                                                                                  56.0
Interim                                                         46.0      38.0         38.0
Ratios
EBITDA margin (%)                                               20.7      20.0         22.3
Return on capital employed                                      22.4      18.6         24.6
Effective taxation rate (%)                                     28.2      28.2         30.5
Gearing (%)                                                     (5.4)      3.9         (4.4)
Dividend cover on headline earnings (times)                      2.0       2.0          2.0

Notes to the condensed consolidated interim financial statements
for the period ended 30 June 2017

African Oxygen Limited ('Afrox' or the 'Company') is a South African registered company. The condensed consolidated interim
financial statements of the Company comprise the Company and its subsidiaries (together referred to as the 'Group') and the
Group's interest in an associate and a trading trust.

1. BASIS OF PREPARATION
The condensed consolidated interim financial statements are prepared in accordance with, and containing the information
required by the International Financial Reporting Standard (IAS) 34 Interim Financial Reporting, the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by Financial
Reporting Standards Council and the requirements of the Companies Act of South Africa. The accounting policies applied in the
preparation of these interim financial statements are in terms of International Financial Reporting Standards and are
consistent with those applied in the previous annual financial statements.

The condensed consolidated interim financial statements are prepared on the historical-cost basis except for the following
items which are measured using an alternative basis at each reporting date:
- Derivative financial instruments measured at fair value through profit or loss;
- Retirement benefit assets measured at the fair value of the planned assets less the present value of the defined benefit
  obligation; and
- Share-based payment awards are measured at fair value. The fair value of the equity instruments granted is estimated using
  industry-accepted techniques.

The directors take full responsibility for the preparation of the these condensed consolidated interim financial statements.
This report was compiled under the supervision of Matthias Vogt, CFO.

2. CHANGES IN ACCOUNTING POLICY
The Group has adopted the following new standards and amendments to standards, including any consequential amendments to
other standards, with a date of initial application of 1 January 2017:
- Disclosure Initiative (Amendments to IAS 7); and
- Recognition of Deferred Tax Assets for Unrealised Losses (Amendments to IAS 12).

The adoption of the amendments to standards listed above did not have a significant impact on the Group's condensed
consolidated interim financial statements.

3. FORTHCOMING CHANGES IN ACCOUNTING POLICY
IFRS 15 Revenue from Contracts with Customers
The Group has begun an initial assessment of the potential impact of the adoption of IFRS 15 on the financial statements.

Based on this assessment, there is unlikely to be any impact on the measurement and timing of revenue recognition from the
sale of Hard Goods.

With respect to the sale of LPG and Atmospheric Gases, the impact of IFRS 15 will differ depending on the arrangement with
the customer. The Group has selected a sample of key contracts with customers and are in the process of reviewing
these contracts to:
1) identify the relevant performance obligations - specifically whether ancillary services such as delivery, collection
   and quality and safety services are distinct from the sale of the gas;
2) determine how to allocate the transaction price where more than one performance obligation is identified and the
   customer is charged a single price; and                        
3) determine whether revenue should be recognised at a point in time or over time.

The Group does not expect any contracts to include a significant financing component.

The Group plans to adopt IFRS 15 in its financial statements for the year ended 31 December 2018, using the modified
retrospective approach.

IFRS 9 Financial Instruments
The Group has begun an initial assessment of the potential impact of the adoption of IFRS 9 on the financial statements.
Given the basic nature of the financial instruments held by the Group, it is unlikely that there will be any significant
impact on the measurement of these instruments as a result of the adoption of IFRS 9. The Group is still
reviewing the new hedge accounting requirements and determining the impact on the Group's risk management
objectives and strategy.

The Group is currently assessing the impact on the impairment of financial assets as a result of the new 'expected-loss'
model. However, the impairment methodologies that will apply under IFRS 9 have not yet been finalised.

The Group plans to take advantage of the exemption allowing it not to restate comparative information with respect to
classification and measurement changes.

Any differences will be recognised in retained income as at 1 January 2018. The new hedge accounting requirements will be
applied prospectively.

IFRS 16 Leases
The Group has begun an initial assessment of the potential impact of the adoption of IFRS 16 on the financial statements.
Based on this assessment, the Group is expecting to recognise significant right-of-use assets and lease liabilities relating
to current properties and vehicle operating leases.

The Group is in the process of evaluating whether certain items of property, plant and equipment, that are not leased items
in terms of IAS 17 and IFRC 4, may qualify as leased items in terms of IFRS 16.

This standard will not be early adopted.

R'million                                                        30 June   30 June  31 December
                                                                    2017      2016         2016
                                                                6 months  6 months    12 months
                                                                reviewed  reviewed      audited
4. PROPERTY, PLANT AND EQUIPMENT
   Opening carrying value                                         2 952     2 988        2 988
   Additions, net of transfers from assets under construction       169       146          379
   Transfer to assets held for sale                                   -        (7)          (7)
   Transfer from assets held for sale                                 -         1            -
   Impairments                                                        -         -          (10)
   Disposals                                                         (3)       (8)         (15)
   Depreciation                                                    (172)     (180)        (367)
   Translation differences                                           (1)       (5)         (16)
   Closing carrying value                                         2 945     2 935        2 952

5. FAIR VALUE CLASSIFICATION AND MEASUREMENT
Accounting classification and fair value
The classification of each class of financial assets and liabilities, and their fair values are:

  R'million                                           Fair value
  30 June 2017
  Financial asset measured at fair value
  Derivative financial instruments                             1
  31 December 2016
  Financial liability measured at fair value
  Derivative financial instruments                            11
  30 June 2016
  Financial liability measured at fair value
  Derivative financial instruments                            10

The derivatives are a level 2 measurement and the fair value of the derivative financial instruments is based on broker
quotes. Similar contracts are traded in an active market and the quotes reflect the actual transactions in similar
instruments.

6. EARNINGS AND HEADLINE EARNINGS PER SHARE
Headline earnings per share is calculated on headline earnings of R288 million (2016: R237 million), and a weighted average
number of ordinary shares of 308 567 602 (2016: 308 567 602) in issue during the period.

Reconciliation between earnings and headline earnings

R'million                                                 30 June   30 June  31 December
                                                             2017      2016         2016
                                                         6 months  6 months    12 months
                                                         reviewed  reviewed      audited
  Profit for the period                                       291       240          597
  Adjusted for the effects of:
  Profit on disposal of property, plant and equipment          (5)       (5)         (26)
  Impairment of property, plant and equipment                   -         -           10
                                                              286       235          580
  Taxation                                                      2         2            4
  Headline earnings                                           288       237          584
  Basic and diluted earnings per share - cents               94.4      77.8        193.3
  Headline earnings per share - cents                        93.3      76.5        189.4

7. UPDATE ON KEY LITIGATION MATTERS
As at the date of this report, there is no outstanding litigation of a material nature against the Group. Afrox is presently
a respondent in an investigation by the Competition Commission with respect to the LPG sector. Afrox is cooperating fully
with the investigation.

8. SUBSEQUENT EVENTS
The directors are not aware of any material matter or circumstance arising between the 30 June 2017 and the date of this
report on which comment is required.

9.INDEPENDENT REVIEW BY THE AUDITORS
These condensed consolidated interim financial statements for the six months ended 30 June 2017 have been reviewed by the
company's auditors, KPMG Inc., who expressed an unmodified review conclusion. The auditors' review report does not
necessarily report on all of the information contained in these financial results. Shareholders are therefore advised that in
order to obtain a full understanding of the nature of the auditors' engagement, they should obtain a copy of the auditors'
review report together with the accompanying financial information from the Company's registered office.

Corporate information
African Oxygen Limited
(Incorporated in the Republic of South Africa)
Registration number: 1927/000089/06
ISIN: ZAE000067120 JSE code: AFX
NSX code: AOX

Transfer secretaries: Computershare Investor Services (Pty) Limited

Sponsor in South Africa: One Capital

Sponsor in Namibia: Namibia Equity Brokers (Pty) Limited

Directors: S Venter (Managing Director), M Vogt* (Financial Director), B Eulitz* (Chairman), M von Plotho*, Dr KDK Mokhele,
CF Wells**, RJN Gearing**, NVL Qangule, GJ Strauss, VN Fakude
* German ** British

Company Secretary: C Singh

Auditors: KPMG Inc.

Registered office
Afrox House, 23 Webber Street, Selby
Johannesburg 2001
PO Box 5404, Johannesburg 2000
Telephone +27 (11) 490 0400

Date: 08/09/2017 07:05:00 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.