Deflated earnings for African Oxygen

2011-02-16 16:48

Johannesburg - Gas and welding company African Oxygen (AFX) on Wednesday reported headline earnings per share of 55.5 cents for the year ended December 31 2010, from 74.6c previously.

Revenue decreased 2% to R4.7bn and earnings before interest, tax, depreciation, amortisation and impairments (Ebitda) reduced 24% to R606m.

Net profit was R106m, including impairments.

Afrox said it continued to invest in plant modernisation, additional capacity and efficiency enhancements to the value of R294m.

The board declared a final cash dividend of 8c/share, from 19c in 2009. Together with the interim cash dividend of 19c/share, a total of 27c/share was declared, from 38c in 2009.

"Our financial performance was disappointing as trading conditions remained challenging and were exacerbated by the disruptive and unforeseeable equipment failures at the air separation unit in Witbank during March," it said.

Input cost pressures in 2010, including an increase in electricity (44%), wages and commodities, were a challenge for the group from a selling price/cost recovery point of view, it said, adding that strikes and supply disruptions presented additional challenges.

Afrox noted a recovery in liquefied petroleum gas (LPG) demand, with bulk volumes ahead of 2009. In packaged LPG, trading conditions were mixed, however.

The group said that illegal filling continued to be a concern. Tonnage volumes marginally increased for the year over 2009.