AFRICAN OXYGEN LIMITED - Trading statement

Release Date: 13/12/2018 07:05
Code(s): AFX
 
Wrap Text
Trading statement

African Oxygen Limited
(Incorporated in the Republic of South Africa)
(Registration number 1927/000089/06)
JSE code: AFX
NSX code: AOX
ISIN: ZAE000067120
(“Afrox”, “Company” or the “Group”)

TRADING STATEMENT

In terms of paragraph 3.4(b) of the JSE Limited Listings Requirements, companies are required to publish
a trading statement as soon as they are satisfied that, with a reasonable degree of certainty, the financial
results for the current reporting period will differ by at least 20% from the financial results of the previous
corresponding period.

Against a backdrop of subdued economic growth during the past two years which Afrox believes will
prevail in the medium term, the Company has reviewed its operating model to enable continued growth in
earnings. Particularly the following areas have been targeted to extract further efficiencies:

    -   refined go-to-market approach;
    -   the continued centralisation of support functions;
    -   continued integration of production and distribution; and
    -   optimized supply and distribution networks.

In the execution of the Company’s ongoing restructuring, the Company will strengthen its operating
model, reduce its fixed cost base further and allocate resources to areas of future volume growth.

The primary objective of the restructure is to further improve the Group’s organizational effectiveness,
customer satisfaction and the need for integrated solutions across Sub-Saharan Africa. Accordingly, Afrox
expects this to enable it to continue its targeted growth in earnings in the future.

Basic earnings per share for the financial year ending 31 December 2018 is expected to be between
139.3 cents and 161.3 cents per share, being between 31.6% and 20.8%, lower than the 203.6 cents per
share for the previous corresponding period.

Headline earnings per share (“HEPS”) for the financial year ending 31 December 2018 is expected to be
between 150.5 cents and 174.3 cents per share, being between 25.1% and 13.3%, lower than the 201.0
cents per share reported for the previous corresponding period.

The expected decrease in HEPS is as a result of:

    -   a 2018 fiscal year restructuring cost of R24 million;
    -   a provision made for the restructuring process of R58 million for the 2019 fiscal year;
    -   a R55 million impairment of assets as a result of the restructure; and
    -   higher costs due to a once-off major plant break down.

The information contained in this announcement has not been reviewed or reported on by the Company’s
external auditors.

The Company expects to publish its results for the year ending 31 December 2018 on or about 4 March
2019.


Johannesburg
13 December 2018

Sponsor
One Capital

Date: 13/12/2018 07:05:00 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.

Share This Story