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AFX- Afrox- Abridged Results for the six months to 31 March 2007
African Oxygen Limited
(Incorporated in the Republic of South Africa)
(Registration number 1927/000089/06)
JSE code: AFX, NSX code: AOX
ISIN: ZAE000067120
("Afrox" or "the Company")
African Oxygen limited abridged results for the six months to 31 March 2007
PERFORMANCE REVIEW
African Oxygen Limited (Afrox) continued to produce sound results in a buoyant
manufacturing economy where demand outstripped supply for certain products.
The comparative results of the period ended 31 March 2006 have been adjusted as
disclosed in note 7.1. This allows the comparison of March 2007 results to be a
more accurate measure.
On this like for like basis, revenue was 17 percent higher at R2,1 billion with
profit from operations at R392 million (2006: R318 million), an increase of 23
percent. Net profit for the period was 18 percent up at R240 million (2006: R203
million).
Adjusted headline earnings per share were 19 percent higher at 78,8 cents (2006:
66,2 cents) and adjusted basic earnings were 77,8 cents (65,9 cents), an
increase of 18 percent.
The balance sheet remains strong, gearing was an acceptable 25,6 percent (2006:
26,5 percent), in spite of the large capex spend.
The buoyant demand situation produced challenges for the business and, to manage
the demand, the company embarked on an extensive R500 million investment
programme, which it announced in the 2006 Annual Report. The capex programme
will go a long way to meeting demand well into the future.
CHANGE IN THE YEAR END
These interim financial results are published for information purposes. Afrox
changes its year-end to December to align itself with its holding company, The
Linde Group. This financial year will therefore be ending 31 December 2007. A
comprehensive interim report will be produced for the nine months ending 30 June
2007.
DIVIDEND DETAILS
An interim dividend will be considered at the interim stage, ending 30 June
2007.
BEE RATING
Afrox has improved its BEE rating from a BB to BBB.
CHANGES TO THE BOARD
Tjaart Kruger (47) has joined the company as Managing Director, effective 1
April 2007. He joins Afrox from the Tiger Brands Group where he held several
senior executive positions.
Alan Watkins and J'rgen Nowicki were appointed to the board as non-executive
directors with effect from 4 April 2007. They both hold executive positions with
The Linde Group.
Alan Ferguson and Jim Ford, non-executive directors, resigned from the board
with effect from 30 March 2007. Daniel Shook, an alternate director, resigned on
the same date.
OUTLOOK
Business remains strong and the company is well positioned for real growth in
earnings.
Kent Masters Tjaart Kruger
Chairman Managing Director
4 May 2007
1. BASIS OF PREPARATION
These interim financial statements have been prepared in accordance with the
recognition and measurement requirements of International Reporting Standards,
(IFRS), the disclosure requirements of IAS 34 -Interim Financial Reporting, the
listing requirements of the JSE Limited and the South African Companies Act.
These financial statements do not contain all the information and disclosures
required in the annual financial statements, and should be read in conjunction
with the group consolidated annual financial statements as at 30 September 2006.
2. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies applied are consistent with those followed in the
preparation of the consolidated annual financial statements for the year ended
30 September 2006.
By order of the Board.
Ria Sanz
Company Secretary
www.afrox.com
AFRICAN OXYGEN LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1927/000089/06
ISIN: ZAE000067120
JSE code: AFX, NSX code: AOX
("Afrox")
Registered office:
Afrox House, 23 Webber Street, Selby, Johannesburg, 2001
(PO Box 5404, Johannesburg, 2000)
Telephone (+27 11) 490-0400
Directors: JK Masters* (Chairman), TJN Kruger (Managing Director), AJ Cullens*,
A Watkins***, J Nowicki****, DM Lawrence, LA MacNair, KDK Mokhele, SM Pityana,
LL van Niekerk, CJPG van Zyl
Transfer secretaries:
Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street, Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Telephone (+27 11) 370-5000
Sponsor in South Africa: Barnard Jacobs Mellet Corporate Finance (Pty) Limited
Sponsor in Namibia: Namibia Equity Brokers (Pty) Limited
3. SUMMARISED BALANCE SHEET
Unaudited Unaudited Audited
31 March 31 March 30 September
Rm 2007 2006 2006
ASSETS
Non-current assets 2,556 2,360 2,297
1,547 1,137 1,618
Current assets
4,103 3,497 3,915
Total Assets
EQUITY AND LIABILITES
Capital and reserves 2,189 1,820 2,271
578 632 464
Non current liabilities
1,336 1,045 1,180
Current liabilities
4,103 3,497 3,915
Total Equity and Liabilities
4. SUMMARISED INCOME STATEMENT
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
Rm March 2007 March 2006 September 2006
Revenue 2,110 1,845 3,914
Operating profit 392 379 754
Profit on sale of investment - - 362
Profit from operations 392 379 1,116
Net finance (costs) (21) (17) (35)
Income from associates (1) 53 100
Profit before taxation 370 415 1,181
Income tax expense (127) (124) (316)
Profit for the period 243 291 865
Attributable to
Equity holders of the 240 289 858
company
Minority interest 3 2 7
Net profit for the period 243 291 865
5. EARNINGS PER SHARE
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
Rm March 2007 March 2006 September 2006
Total net profit for the
period attributable to
equity holders of
The company 240 289 858
Reversal for headline 3 1 (267)
earnings
Headline earnings 243 290 591
Basic earnings per ordinary 77.7 93.5 278.1
share - Group (cents)
Adjusted BEPS-Industrial 77.7 65.9 148.6
operations (cents)
Headline earnings per 78.8 93.7 191.4
ordinary share-Group (cents)
Adjusted HEPS-Industrial 78.8 66.2 141.6
operations (cents)
6. STATISTICS AND RATIOS
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
Statistics March 2007 March 2006 September 2006
Average no of ordinary 308,566 308,568 308,568
shares in issue during the
period and on which earnings
per share are based (`000)
Ratios
Interest cover (times) 18.4 22.7 31.9
Effective tax rate (%) 34.4 29.8 26.8
Gearing (%) 25.6 26.5 3.3
7. SEGMENTAL INFORMATION
6 months ended 31 March 2007
Adjusted Industrial Total
Industrial
Operations Operations
Rm % Change
Revenue 17 2,110 2,110
Operating profit 23 392 392
Net profit for the period 18 240 240
BEPS 18 77.7 77.7
HEPS 19 78.8 78.8
Adjusted Results
6 months ended 31 March 2006
Adjusted Adjustment* Total
Industrial (Results as
Rm Operations Previously
reported)
Revenue 1,803 64 1,867
Operating profit 318 61 379
Net profit for the period 203 86 289
BEPS 65.9 27.6 93.5
HEPS 66.2 27.5 93.7
12 months ended 30 September 2006
Industrial Other** Total
Operations
Rm
Revenue 3,914 - 3,914
Operating profit 684 70 754
Net profit for the period 437 421 858
BEPS 148.6 129.5 278.1
HEPS 141.6 49.8 191.4
* The adjustment relates to restatement of results; see note 7.1 below.
** Relates to Life Healthcare earnings, profit on sale of the Life
Healthcare investment, pension fund surplus and other non-recurring items.
7.1 Adjustment of Comparative Segmental Information for the six Months Period
ended 31 March 2006.
i) Exclusion of the results of Life Healthcare
The results as at 31 March 2006 have been adjusted by the exclusion of
the results of the share of associate, Life Healthcare`s profit. This
associate was disposed of in 2006. The adjustment is the reduction in
net profit by R56 million.
ii) Restatement of cylinder rental income
The treatment of annual cylinder rental contracts has been changed to
recognise rental income as revenue over the period of the rental, even
though billed and received annually. Therefore revenue and operating
profit for the period ended 31 March 2006, has been adjusted by R42
million representing rental income not yet earned at that date. The
effect on net profit is an adjustment of R30 million.
iii) Discounting of credit sales
The treatment of credit sales has been adjusted by discounting these
sales using the average debtors` collection period and prime lending
rate. This is in line with the accounting policy adopted from
September 2006. The revenue has been decreased by R22 million.
Operating profit is not affected.
8. SUMMARISED CASHFLOW STATEMENT
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
March 2007 March 2006 September 2006
Rm
Net cash (outflow)/inflow (250) (139) 46
from operating activities
Net cash (outflow)/inflow (510) (202) 233
from investing activities
Net cash inflow/(outflow) 435 233 (8)
from financing activities
Net (decrease)/increase in (325) (108) 271
cash and cash equivalents
Cash and cash equivalents at 433 162 162
start of period
Cash and cash equivalent at 108 54 433
end of period
9. SUMMARISED STATEMENT OF CHANGES IN EQUITY
Issued Share Other Accumulated Minority Total
Share Premium Reserves Profits Interests
Rm Capital
Balance at 1 15 537 78 1,618 23 2,271
October 2006
Other - - (50) - - (50)
movements
Net profit for - - - 240 3 243
the period
Dividend - - - (275) - (275)
declared
Balance at 31 15 537 28 1,583 26 2,189
March 2007
Balance at 1 537 122 958 12 1,644
October 2005 15
Other - - 5 (4) 7 8
movements
Net profit for - - - 289 2 291
the period
Dividend - - - (123) - (123)
declared
Balance at 31 15 537 127 1,120 21 1,820
March 2006
Date: 04/05/2007 13:00:02 Supplied by www.sharenet.co.za
Produced by the JSE SENS Department.
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