The South African company, Afrox recently submitted its end of year fiscal results. 2010 reports were ‘disappointing’ seeing a decline in revenue, EBITDS and earnings per share.
For the year ended 31st December 2010 Afrox reported 2% decrease in overall revenue to R4.7bn. Likewise, EBITDA declined by 24% to R606m, while headline earnings per share (EPS) were 55.5 cents for the year having reduced by 26% over the year.
Despite this the company adopted a Keynesian approach, with continued investment in plant modernisation, additional capacity and efficiency enhancements to the value of R294 m; consequently The Group ended the year with net borrowings of R842m.
In an official statement delivered by Kent Masters, Chairman for the firm and Tjaart Kruger, Managing Director, Afrox announced, “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 (ASU) in Witbank, during March.”
The duo also laid blame to input costs, they described, “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. Other factors such as strikes and supply disruptions presented additional challenges.”
Given the fiscal results, the Afrox Board has declared a final cash dividend of 8 cents per share. In comparison, 2009 year end final cash dividends equated to 19 cents per share.
The company anticipates improvement throughout 2011. In a recent press release both Masters and Kruger advised, “Afrox is focusing on protecting its strong position in industrial gases, LPG and hardgoods with continued investment in plant expansion and modernisation, the benefits of which are likely to start coming through from 2011 onwards.”
The pair concluded, “A number of sizeable one-off costs should not recur in 2011, and the Group is well geared to benefit from improved market conditions and growth opportunities.”