South African industrial gas supplier African Oxygen (Afrox) reported a 31% drop in half-year earnings on Friday as lower sales volumes and higher sourcing costs for liquefied petroleum gas (LPG) weighed on profits.
The welding and gas products supplier said its headline earnings per share, the main profit gauge in South Africa, fell to 76.5 cents, or 31.3%, for the six months ended June 30, compared with 111.3 cents during the same period a year earlier.
Revenue during the period fell to R2.694 billion ($161 million) from R3.0 billion a year earlier.
Afrox said its healthcare business and recovery of cost inflation in its atmospheric gases and hard goods segments helped to offset lower sales volumes due to restrictions during the coronavirus lockdown that began in March.
“We achieved satisfactory revenue in our Medical Gases business despite non-critical operations being postponed at hospitals during the Covid-19 pandemic leading to lower oxygen off-take,” the company said in a statement.
Afrox, which operates in countries across Africa, supplies welding and gas products, including those used in the healthcare, mining and hospitality industries.
It said its cash balance of R1.167 billion places it in a strong position to take advantage of future opportunities.
The company declared an interim dividend of 38 cents per share compared with 55 cents a year earlier.