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AFX - Afrox - Amended 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")
AMENDED RESULTS RELEASE ("amended release")
This amended release supersedes the announcement released on SENS at 13h00
today. There are no material differences between the amended release and the
earlier release, save for some amendments to the commentary to the results.
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 for certain of our products outstripped
supply.
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 appropriate measure to reflect the results of the continuing business.
On this basis, revenue was 17 percent higher at R2,1 billion (2006: R1,8
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, with gearing at 25,6 percent (2006: 26,5
percent), despite the large capex spend.
The buoyant demand situation in the reporting period produced challenges for the
business from a supply perspective. As previously announced, the company
embarked on an extensive investment programme initiated during the 2006
financial year. As a result, the capital expenditure for the six months, of R400
million, is significantly higher than the R200 million for 2006. This will go a
long way to meeting future demand. The initial benefit of this capex programme
can be expected in the second half of 2007.
CHANGE IN THE YEAR END
These interim financial results are published for information purposes. Afrox
has changed its year-end to December to align itself with its holding company,
The Linde Group. This financial year will therefore end on 31 December 2007. A
comprehensive interim report will be produced for the nine months ending 30 June
2007, at which time an interim dividend will be considered.
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. He succeeds Rick Hogben, the previous Managing
Director, who retired from the board at the end of March 2007. Alan Ferguson and
Jim Ford, non-executive directors and Daniel Shook, an alternate director,
resigned from the board with effect 30 March 2007, following their resignations
from The Linde Group.
Alan Watkins and Jurgen 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.
OUTLOOK
Business activity remains strong on the back of a growing South African economy
and the company is well positioned for real growth in earnings.
Kent Masters Tjaart Kruger
Chairman Managing Director
Johannesburg
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
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
Company Secretary: ME Sanz
*British **American ***German
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,
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 Jacob Mellet Corporate Finance (Pty) Limited.
Sponsor in Namibia: Namibia Equity Brokers (Pty) Limited.
AFRICAN OXYGEN LIMITED
INTERIM RESULTS SENS ANNOUNCEMENT
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
Current assets 1,547 1,137 1,618
Total Assets 4,103 3,497 3,915
EQUITY AND LIABILITES
Capital and reserves 2,189 1,820 2,271
Non current liabilities 578 632 464
Current liabilities 1,336 1,045 1,180
Total Equity and Liabilities 4,103 3,497 3,915
4. SUMMARISED INCOME STATEMENT
Unaudited Unaudited Audited
6 months 6 months 12 months to
to to
Rm March 2007 March 2006 September
2006
Group
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 company 240 289 858
Minority interest 3 2 7
Net profit for the period 243 291 865
*Refer to note 7.1 (iii)
5. EARNINGS PER SHARE
Unaudited Unaudited Audited
6 months 6 months 12 months to
to 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
earnings 3 1 (267)
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 6 months 12 months to
to to
Statistics March 2007 March 2006 September
2006
Average no of ordinary shares
in issue during the period
and on which earnings per
share are based (`000)
308,566 308,568 308,568
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 (Unaudited)
6 months ended 31 March 2007
Adjusted Industrial Total
Industrial Operations
Rm Operations
% Change
Revenue 17 2,110 2,110
Operating profit 23 392 392
Net profit for the period 18 240 240
BEPS (cents) 18 77.7 77.7
HEPS (cents) 19 78.8 78.8
Adjusted Results
6 months ended 31 March 2006
Adjusted Adjustment* Total
Operations (Results as
Previously
Rm reported)
Revenue 1,803 64 1,867
Operating profit 318 61 379
Net profit for the period 203 86 289
BEPS (cents) 65.9 27.6 93.5
HEPS (cents) 66.2 27.5 93.7
12 months ended 30 September 2006
Industrial
Rm Operations Other** Total
Revenue 3,914 - 3,914
Operating profit 684 70 754
Net profit for the period 437 421 858
BEPS (cents) 148.6 129.5 278.1
HEPS (cents) 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 a reduction 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
Rm 2006
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 433 162 162
at start of period
Cash and cash equivalent 108 54 433
at end of period
9. SUMMARISED STATEMENT OF CHANGES IN EQUITY
Issued Share Other Accumu- Minority Total
Share lated
Rm Capital Premium Reserves Profits Interests
Balance at 1 15 537 78 1,618 23 2,271
October 2006
Other - - (50) - - (50)
movements
Net profit - - - 240 3 243
for the
period
Dividend - - - (275) - (275)
declared
Balance at 15 537 28 1,583 26 2,189
31 March
2007
Balance at 1 1,644
October 2005 15 537 122 958 12
Other - - 5 (4) 7 8
movements
Net profit - - - 289 2 291
for the
period
Dividend - - - (123) - (123)
declared
Balance at 15 537 127 1,120 21 1,820
31 March
2006
Date: 04/05/2007 14:53:01 Supplied by www.sharenet.co.za
Produced by the JSE SENS Department.