Afrox revenue up 3% after tepid first-half showing
AFROX is on track in correcting the “imbalances” within its gas division, following tepid performance during the first half of its financial year, MD Brett Kimber said on the release of its interim results yesterday.
The group supplies gas, welding and safety products for the steel, mining, retail and healthcare sectors in SA and the rest of Sub-Saharan Africa.
Mr Kimber said it had been a challenging first half of the year, and despite its restructuring efforts, it posted flat earnings on the weakness in SA’s mining and manufacturing sectors.
For the six months ended June, Afrox’s revenue came in at R2.86bn, an increase of 3% from last year’s R2.78bn.
“The prolonged uncertainty in the economy, and the low economic growth in SA, continued to impact negatively on the demand for it products,” he said.
Earnings before interest, tax, depreciation and amortisation came in flat at R449m, compared with the comparable period last year, while group profit fell slightly to R176m from last year’s R183m. Mr Kimber said the mild winter resulted in a decline in demand for liquefied petroleum gas, with sales dropping to R1.02bn from R1.03bn last year.
“Last year, we imported gas to make up for shortages and refinery shutdowns, but price recovery and distribution costs came under pressure due to reduced demand,” he said.
The group declared an interim cash dividend of 27c per share.
Afrox underwent a change in management 18 months ago to streamline the liquefied petroleum gas division through refining its distribution and value, and also reducing costs through reducing the groups’ redundancies, Mr Kimber said. Last month, Afrox launched a gas regulator — Smoothflo — which is safer than other regulators.
Afrox is implementing a R1.5bn development project, to be rolled out over in three years. “We have corrected the imbalances in the liquefied petroleum gas division by streamlining our supply chain to be in line with our customer base,” Mr Kimber said.
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2012