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The gas and welding company African Oxygen (Afrox) reported a strong increase in profit in the year to end-December, thanks in part to brisk business with state hospitals.
While its revenue rose by only 0.6% to just over R6 billion, its headline earnings per share increased by more than 31%. Shareholders will receive a more than 30% increase in dividends after the gas supplier announced that dividends rose to 101 cents per share in 2019 from 77 cents in the previous year.
The company supplies gases to public hospitals, and was recently awarded new contracts for state hospitals in four provinces.
In addition, Afrox saw volume growth in selling cylinders to low-income households in South Africa.
Its profit growth was also supported by higher prices for its products and improved plant performance.
"The South African economy remains weak and no significant turnaround is expected in the short term. However, Afrox will continue to focus on specific growth opportunities and effective price cost recoveries while economic growth is expected to be weak," the company said.
Its share price jumped almost 4% on Wednesday morning following the results, reaching R19.95. It is still 23% lower than a year ago.
