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Afrox profit flat on lower sales

Johannesburg - Africa's biggest gases and welding group African Oxygen [JSE:AFX] posted flat half-year profit on Thursday as cost cuts offset declining sales.

Afrox, majority-owned by German's Linde Group, said on Thursday headline earnings per share totalled 38.8 cents in six months to end-June from 38.7 cents a year ago.

Shares of Afrox, which are up 4.5% so far this year, fell 1.74% to 2 260c following the results release, lagging a 1.11% gain of the All Share index.

The company said revenue fell 3% to R2.3bn as industrial sector spending remained under pressure.

Afrox, whose gases and welding products are used in industries ranging from vehicle manufacturing to hospitals, said slower economy growth crimped demand for its products.

The company maintained a cautious outlook, saying it would focus on managing costs because it did not expect a significant improvement in the South African economy.

Afrox saved about R200m last year after laying off 15% of its staff and dropping slow-moving product ranges.

An interim dividend of 19 cents was declared, unchanged from the same time last year.

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