Afrox profit surges, sets eyes on Africa expansion
JSE-listed African Oxygen (Afrox) on Thursday reported a jump in net profit for the six months to June, reaching R187-million, compared with the R58-million achieved in the first half of 2011.
The company, which focused on effective cost management, improving plant reliability and raising customer service levels in a turnaround strategy during the 2012 financial year, recorded a 9% increase in revenue, from R2.5-billion in the corresponding period last year, to R2.8-billion in 2012.
The group commented, however, that demand for liquefied petroleum gas (LPG) declined, while demand for bulk gases remained flat during the period, owing to a mild winter. This was further impacted by the company’s advance importation of the product to prevent shortages in the market.
However, demand for atmospheric gases used in healthcare increased during the six months under review.
Meanwhile, Afrox commented that, despite a fall in the contributions made by the company’s African operations, the continent’s future growth prospects held “exciting new opportunities”.
African countries, excluding South Africa, accounted for 21% of the group’s R446-million half-year earnings before interest, tax, depreciation and amortisation, down from 26% in the first half of last year.
Despite challenging economic conditions and an expected low market growth, sub-Saharan Africa’s outlook also remained optimistic and was central to future growth.
Afrox, which was moving from the turnaround phase into a sustained and aggressive growth phase, aimed to assess and undertake new projects moving forward.
Further, an anticipated R1.5-billion capital-projects programme, which would boost capacity and improve customer service levels in KwaZulu-Natal, Gauteng and the Eastern Cape, would drive growth in the next few years.
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