DURBAN – African Oxygen (Afrox) on Monday soared on the JSE after the gas and welding products company reported an improvement in earnings for the six months to end June benefited from a contract to supply all public hospitals and clinics in South Africa with medical gases.
The group said that its earnings before interest and taxes increased 4.8 percent to R457 million from R436m last year on the back of the multi-year contracts with the country’s public hospitals and further cost savings from restructuring activities.
The group said its earnings before interest and tax (Ebit) improved during the period from a 30.3 percent decline in the year to end December, mainly as a result of higher operational cost, additional plant breakdown cost of R56m, liquefied petroleum gas (LPG) stock devaluation, market price impact of R32m and increase in depreciation of R45m.
Overall business improved during the period in review with a 3.3 percent increase in revenue to R3 billion from R2.90bn during the comparative period last year.
The group attributed the increase to improvement of volumes in the atmospheric gases segment and healthcare business as well as growth in cylinder volumes within its LPG segment and the successful recovery of cost inflation across all three segments.