African Oxygen Limited: Audited results for the year ended 30 September 2003

African Oxygen Limited: Audited results for the year ended 30 September 2003


Johannesburg, October 30 /PRNewswire/ -- South Africa's best governed company

Afrox received the Deloitte & Touche and Moneyweb Good Governance Award for the
best governed company in the country. It was placed first in two of the four
categories, namely Board Effectiveness and Corporate Integrity and Ethics.

- Net profit up 42%

- Industrial business grows by 61%

- Earnings per share up 38%

- With dividends up 38%

- Cash generated from operations increases by 24% to R1,4 billion

DEAR SHAREHOLDERS

Performance summary

African Oxygen Limited (Afrox) posted excellent results for the year ended 30
September 2003. The results reflect the company's ability to grow all its
businesses profitably while focusing on improved efficiencies and asset
management. Headline earnings per share have increased by 33 per cent, and this
enabled the company to increase its total dividend for the year by 38 per cent
to 83 cents per share.

Industrial & Special Products (ISP) and Process Gas Solutions (PGS), which
constitute the industrial businesses, showed marked increases in revenue,
earnings and cash flow, as did Healthcare.

Afrox increased its net profit attributable to shareholders by 42 percent. On a
segmental basis the industrial business now represents 62 per cent of net
profit, and Healthcare 38 percent.

Financial results

Revenue increased by 13 per cent to R7,3 billion (2002: R6,5 billion) with
operating profits increasing by 22 per cent to R1,1 billion, exceeding R1
billion for the first time (2002: R896 million).

ISP, PGS and Healthcare, all benefited from improved operating profit margins.
Within ISP, the AfroxPac safety product, in its first full year of trading,
contributed to the overall operating profits' improvement. PGS benefited from a
lower cost base owing to its focus on operating efficiencies, while Healthcare's
improved operating profits were directly the result of increased activity levels
and overhead efficiencies.

Net interest paid reduced by 22 per cent to R122 million (2002: R157 million).
This was mainly due to excellent working capital management, but was aided by
the lower interest rates experienced in the latter part of the financial year.

The improved tax rate of 30 per cent (2002: 33 percent) resulted from the
utilisation of assessed losses in both the industrial and healthcare
businesses.

At a segmental reporting level, the industrial business increased its share of
group net profit by 61 percent to R345,1 million (2002: R214,7 million), while
the healthcare business increased its share of net profit by 19 percent to
R209,3 million (2002: R175,5 million).

Funding requirements decreased by R258 million (2002: R141 million) in spite of
robust growth, capital expenditure, and acquisitions worth R552 million. Once
again sound asset management resulted in a reduction of working capital of R115
million. This contributed to the record low gearing level of 13 per cent (2002:
21 percent).

Accounting policies

These results have been prepared in accordance with South African Statements of
Generally Accepted Accounting Practice including AC133, which became applicable
for the first time this year. The accounting policies for the year ended 30
September 2003 are consistent with those applied at 30 September 2002, except
for a change with regard to Financial Instruments: Recognition and Measurement -
AC133. Comparative figures have not been restated.

Audit report

The auditors, PricewaterhouseCoopers Inc, have issued their opinion on the
group's financial statements for the year ended 30 September 2003. A copy of
their unqualified report is available for inspection at the company's registered
office.

Business review

The industrial businesses of ISP and PGS performed well in spite of a downturn
in the manufacturing sector over the past six months. New initiatives to improve
marketing focus and customer relationships contributed to the excellent results
in ISP. During the past two years, the ISP business has achieved strong market
penetration by developing new markets, extending its global customer base, and
adding to its product offering to existing and new customers. This strategy has
translated into sound and sustainable growth, accompanied by excellent working
capital management.

PGS's strong performance was enhanced by its application of advanced technology
to produce and improve new and existing processes. Firm pricing trends and a
focus on operating efficiencies, added to revenues to ensure that PGS exceeded
its targets for the year.

Healthcare had another year of good organic growth, with increased activity
levels and performance excellence. The company acquired increased shareholdings
in the Little Company of Mary Hospital in Pretoria and Joint Medical Holdings in
Durban. Construction of the new 124-bed Roseacres Clinic in Germiston was
completed in September 2003. The total investment in building initiatives and
equipment upgrades during the financial year amounted to R270 million, and is
part of a continuous programme to meet and exceed the expectations of doctors
and patients, as well as to expand capacity.

Outlook

Over many years Afrox has developed a solid business base, providing essential
products and services to key markets. The industrial business is now offering
new products to a broader market sector. The company has optimised its human
capital, technology and facilities to increase its productivity and global
competitiveness. This gives Afrox the resilience to perform well in all economic
cycles, as evidenced in these excellent results.

Afrox has a strong balance sheet and is well positioned for future growth.

John Walsh          Rick Hogben         Johannesburg
Chairman            Managing Director   30 October 2003


Notice of final dividend declaration and salient features

Notice is hereby given that a final cash dividend of 50 cents (2002: 37 cents)
per ordinary share, being the final dividend for the year ended 30 September
2003, has been declared payable to all shareholders of Afrox recorded in the
register on Friday, 23 January 2004.

The salient dates for the declaration and payment of the final dividend are as
follows:

                                            2004
Last day to trade ordinary shares 
'cum' dividend                              Friday, 16 January
Ordinary shares trade 'ex' the dividend     Monday, 19 January
Record date                                 Friday, 23 January
Payment date                                Monday, 26 January


Share certificates may not be dematerialised/rematerialised between Monday, 19
January 2004 and Friday, 23 January 2004, both days inclusive.

By order of the Board
Johannesburg                                30 October 2003


CAUTIONARY

Afrox and Afrox Healthcare are currently trading under a joint cautionary
announcement, which states that Afrox is in the process of considering its
strategic options with regard to its shareholding in Afrox Healthcare Limited.
This may or may not lead to a change in Afrox's shareholding. As soon as this
process is finalised, there will be a full communications exercise to inform
stakeholders.

AFROX

Afrox is one of South Africa's best known industrial brands. It is a leader in
all its businesses - gases, welding products and healthcare.

AFROXMEDICAL

Afrox medical gases are used in most state and private hospitals, emergency
units, ambulances, and for home therapy.

HANDIGAS

The majority of restaurants and fast-food outlets cook with Handigas, and almost
all hotels, pubs and casinos use Handigas.

AFROXHEALTHCARE

Afrox Healthcare is the country's leading Healthcare provider with 88 acute care
and long-stay chronic hospitals.

VITEMAX

Most metals in South Africa are joined using Afrox electrodes or welding wires.
SA's top selling electrode is Vitemax, with 293 million sold annually.

FOODGRADECO2

Afrox's FoodGrade CO2 puts the fizz in nearly every single softdrink made in
South Africa.

SUREMIX

Suremix puts the head on most draught beers poured in South Africa.

SUMMARISED BALANCE SHEET
                                       30 September   30 September
R'000                                  2003           2002
ASSETS
Non-current assets                     3 269 920      2 988 843

Property, plant and equipment          2 857 588      2 687 938
Other non-current assets               412 332        300 905

Current assets                         1 942 527      1 691 211

Inventories                            416 647        404 319
Trade and other receivables            1 265 328      1 206 905
Cash and cash equivalents              260 552        79 987

Total assets                           5 212 447      4 680 054

EQUITY AND LIABILITIES   
Capital and reserves                   2 377 131      1 892 528

Share capital                          17 143         16 515
Share premium                          537 314        360 478
Accumulated profits and reserves       1 822 674      1 515 535

Minority interest                      626 165        560 342
Non-current liabilities                783 873        794 673

Borrowings                             623 735        550 365
Other non-current liabilities          160 138        244 308

Current liabilities                    1 425 278      1 432 511

Current portion of borrowings          87 278         201 067
Provisions                             178 616        113 347
Other current liabilities              1 158 007      1 089 312
Bank overdraft                             1 377         28 785
Total equity and liabilities           5 212 447      4 680 054


STATISTICS AND RATIOS
                                       30 September   30 September
                                       2003           2002
Statistics
Total number of shares in issue ('000) 342 853        330 301
Number of ordinary shares on which
earnings per share are based ('000)    335 767        326 363
Dividends and capitalisation share 
award, per share (cents)               83,0           62,5

- Final                                50,0           37,0
- Interim                              33,0           25,5

Ratios
Interest cover (times)                 8,9            5,6
Effective tax rate (%)                 29,5           32,5
Gearing (%)                            13             21
Dividend cover - net profit (times)    2,0            2,0

SUMMARISED INCOME STATEMENT
                               30 September  %        30 September
R'000                          2003          Change   2002

Revenue                        7 325 895     13       6 511 510
Cost of sales                  (5 266 760)            (4 732 843)

Gross profit                   2 059 135     16       1 778 667
Other operating income         897                    --
Administration and other 
expenses                       (970 196)              (882 191)

Operating profit               1 089 836     22       896 476
Exceptional items              --                     (15 034)

Profit from operations         1 089 836     24       881 442
Finance costs                  (121 944)              (157 275)
Income from associates         42 841                 27 139

Profit before taxation         1 010 733     35       751 306
Income tax expense             (298 324)              (244 018)

Profit after taxation          712 409       40       507 288
Minority interest              (157 971)              (117 040)

Net profit for the year        554 438       42       390 248

Adjustments for headline 
earnings
- Exceptional items            --                     15 034
- Taxation effect              --                     (1 370)
- Goodwill amortised           8 689                  5 916 
- Profit on disposal of 
property, plant and equipment  (4 029)                (2 622)

Headline earnings              559 098       37       407 206

Basic earnings per ordinary 
share (cents)                  165           38       120 
Headline earnings per ordinary 
share (cents)                  167           33       125

Segmental Information
                                               Corporate
R'000             PGS      ISP      Healthcare costs      Group
Year ended 
30 September 2003 
Revenue           408 067  2 442 999 4 474 829  --         7 325 895

Operating profit  90 630   454 680   550 521    (5 995)    1 089 836

Year ended 
30 September 2002
Revenue           369 314  2 256 160 3 886 036  --         6 511 510

Operating profit  79 638   391 511   429 266    (3 939)    896 476   

SUMMARISED CASH FLOW STATEMENT
                                          30 September  30 September
R'000                                     2003          2002

Cash generated from operations            1 444 738     1 168 010 
Finance costs and taxation paid           (489 570)     (374 370)
Dividends received                        897           -- 

Cash available from operations            956 065       793 640
Dividends paid                            (55 850)      (123 221)

Net cash inflow from operating activities 900 215       670 419

Acquisition of business                   (68 624)      (227 653)
Disposal of shares                        2 000         111 097 
Purchase of property, plant and equipment (485 261)     (380 804)
Other investing cash flows, net           48 027        6 334 

Net cash used in investing activities     (503 858)     (491 026)

Minorities                                (75 711)      (38 375)
Decrease in borrowings                    (49 946)      (136 422)
Movement on retirement benefit obligation (62 727)      (387)

Net cash utilised in financing activities (188 384)     (175 184)

Net increase in cash and cash equivalents 207 973       4 209
Cash and cash equivalents at beginning 
of period                                 51 202        46 993

Cash and cash equivalents at end 
of period                                 259 175       51 202

SUMMARISED STATEMENT OF CHANGES IN EQUITY
               Issued    Share    Other       Accumulated
R'000          capital   premium  reserves    profits     Total
Balance at 
1 October 2002 16 515    360 478  104 371     1 411 163   1 892 527
Change in 
accounting 
policy         --        --       1 061       15 911      16 972 
Restated 
balance        16 515    360 478  105 432     1 427 074   1 909 499
Surplus on 
revaluation of 
properties     --        --       2 016       --          2 016
Other 
movements      --        --       (611)       (8 018)     (8 629)
Currency 
translation 
difference     --        --       (4 424)     (19 919)    (24 343)
Net profit for 
the period     --        --       --          554 438     554 438
Dividends      --        --       --          (233 314)   (233 314)
Issue of share 
capital        628       176 836  --          --          177 464

Balance at 
30 September 
2003           17 143    537 314  102 413     1 720 261   2 377 131

Balance at 
1 October 2001 16 277    298 756  87 807      1 182 407   1 585 247
Surplus on 
revaluation of
properties     --        --       15 940      --          15 940 
Other 
movements      --        --       624         10 104      10 728 
Currency 
translation 
difference     --        --       --          13 585      13 585
Net profit for 
the period     --        --       --          390 248     390 248
Dividends      --        --       --          (185 181)   (185 181)
Issue of share 
capital        238       61 722   --          --          61 960

Balance at 
30 September 
2002           16 515    360 478  104 371     1 411 163   1 892 527


This is a summarised commentary and results announcement. A full annual report
will be published on the Internet and a hard copy will be mailed to shareholders
in the first week of December 2003. The annual general meeting will be held on
27 February 2004 and notice thereof will be given in the annual report. The
results can be viewed on the website http://www.afrox.com/.

AFRICANOXYGENLIMITED

African Oxygen Limited (Incorporated in the Republic of South Africa).
Registration number: 1927/000089/06.

ISINCode: ZAE000030920. South African share code: AFX. Namibian share code: AOX.
("Afrox" or "the Company").

Registered office: Afrox House, 23 Webber Street, Selby, Johannesburg 2001. PO
Box 5404, Johannesburg 2000. Telephone [phone]. Transfer secretaries:
Computershare Limited, 70 Marshall Street, Johannesburg 2001. PO Box 61051,
Marshalltown 2107. Telephone [phone]. Sponsor in South Africa: Nedbank
Corporate.

Sponsor in Namibia: Namibia Equity Brokers (Pty)Limited.

Directors: JLWalsh(4) (Chairman), RLHogben (Managing Director), RGCottrell, N
Deeming (1), CMDFlemming, AE Isaac(1), LAMacNair, R Médori (2), GL Sedgwick
(3), GS Sibiya, CB Strauss.

Alternate director: RK Lourey (3)

(1) British, (2) French, (3) Australian, (4) American.  


Company Secretary: MGRowell

http://www.afrox.com/

Contact: Mr Chris Fieldgate, Tel No. [phone], Cell No. [phone]
1481, e-mail address : 

DATASOURCE: Afrox Oxygen Limited



Mr Chris Fieldgate, Tel No. [phone] Cell No. [phone],
e-mail address : 

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