Afrox pays dividend amid healthy cash balance

Afrox, a supplier of gases and welding products, has proceeded with an interim dividend payment and is eyeing expansion in spite of a Covid-19 hit to volumes.

The group said it had managed its cash during its six months to end-June, proceeding with a 38c interim dividend — or a R117m payout — down about 31% from the prior comparative period.

Group revenue fell 10.2% to R2.7bn, with the group’s liquefied petroleum gas (LPG) under pressure from falling volumes, partially due to reduced demand from the steel and automotive industries.

Revenue for LPG decreased 11.6% to R1bn, while revenue in the group’s atmospheric gases business, about half of group revenue, fell 5.7%.

This was also hit by lower volumes to the steel and automotive industries, the group said, mitigated somewhat by increased demand in the health-care sector. This included additional proceeds from temporary field hospital installations for the treatment of Covid-19 patients, the group said.

The group had cash of about R1.16bn at the end of June, down 11% from the prior comparative period, while profit fell about 30% to R244m.

“Given the impact of the lockdown and subsequent reduced economic activities, Afrox will continue to focus on optimising revenue opportunities, effective price cost recoveries, fixed cost containment, cash preservation and liquidity to mitigate the lower level of economic activity,” the group said.

Afrox said its cash position puts it in “a strong position to take advantage of future opportunities.” — BDLive