Afrox has produced another set of good results for the six months ended 31 March 2006 with headline earnings per share for the group at 93,7 cents and a 27 percent increase in HEPS for the ongoing industrial business.
Revenue increased by 19 per cent to R1,87bn, operating profit by 16 per cent to R360,3m and net profit attributable to shareholders was 15 per cent higher at R288,5m. These comparisons exclude the healthcare results.
Continued focus on working capital again produced a strong balance sheet, which has become an Afrox hallmark.
Rick Hogben, managing director of Afrox, said that he was satisfied with the results considering the high oil prices, which affected Handigas and company margins. In addition, closure of three oil refineries during the first quarter of Afrox's financial year led to a national shortage of liquefied petroleum gas (LPG). This had major cost implications for the business as Afrox kept large customers supplied by trucking product around the country.
In spite of these challenges the company again showed sound growth in its underlying businesses. This was bolstered by significant demand for industrial products and strong sales in the medical business, special gases, and exports. Handigas sales were adversely affected by the LPG shortages in the first quarter, but saw some recovery in the second quarter.
The bulk gas business performed well despite experiencing shortages of argon, carbon dioxide and nitrogen due to unprecedented demand for these products. Nevertheless, market share was maintained and the bulk gases business now enters an exciting growth phase having won and renewed several long-term gas contracts.
Afrox has an ongoing growth programme, which entails over R600m. This programme is currently under way and will add new gas producing plants, the upgrading of manufacturing facilities and replacement infrastructure to maintain and grow market share. At the same time the programme is designed to enhance our customer services and product quality, and will have both financial and environmental advantages.