DURBAN - African Oxygen (Afrox) surged 6.19percent to R20.43 on the JSE yesterday after the group reported a double-digit growth in earnings for the year to end December.
The group said its profits were bolstered by the R1billion health care contract it won to supply oxygen to the country’s public hospitals for five years and the recovery from equipment impairments during the prior year.
It said its earnings before interest and taxes rose 45.5percent to R867million from R596m last year on the public healthcare business, recovery of cost inflation through pricing, efficiencies from restructuring and improved plant performance.
The group said it would invest in high-tech equipment and installations to meet the growing demand within the public healthcare sector.
Afrox said it would return a 101cents dividend to shareholders in line with the 100c total dividend it had paid in its year to end-December 2017.
It said revenue increased 0.6percent to R6.09bn as a result of volume growth in certain sectors of the business and successful recovery of cost inflation from effective pricing management.
“Adjusted for the impact from the change in Liquefied Petroleum Gas market prices of R96m, total revenue growth was 2.3percent,” the group said.
Afrox managing director Schalk Venter said despite the deterioration in the socio-economic environment, load shedding in the late fourth quarter and a shortage in supply during the second quarter, the company showed its resilience during the year.
Afrox said it aimed to extend its installations in public hospitals in four other provinces.
The group said earnings per share increased by 41.2percent to 204.4c a share and the group declared a final cash dividend of 46c a share, up from last year’s 25c.