Afrox Interim Results 2018

Afrox_Interims_Booklet_20180908_V8_12742_LN.indd 1 2018/09/08 4:35 PM

Contents
Investor presentation 1
Commentary 23
Business review 25
Condensed consolidated interim income statement 31
Condensed consolidated interim statement of comprehensive income 32
Condensed consolidated interim statement of financial position 33
Condensed consolidated interim statement of cash flows 34
Condensed consolidated interim statement of changes in equity 35
Segmental report 36
Statistics and ratios 37
Notes to the condensed consolidated interim financial statements 38
Selected notes to the condensed consolidated interim financial statements 43
Corporate information 46

1Interim results presentation for the six months ended 30 June 2018
INTERIM RESULTS
PRESENTATION 2018

2 African Oxygen Limited
1. Performance Summary
2. Performance Drivers
3. Afrox Financial Results Analysed
4. Key Focus Areas
5. Appendices
Presentation Outline

PERFORMANCE SUMMARY
INTERIM RESULTS PRESENTATION 2018

2018 Financial Performance
Top 10 Highlights
 Reported revenue up 3.9% from volume & price; 2.1% excl. ∆ LPG market prices and effects from currency
 GPADE up 6.7% to R913m with margin improvement of 80bps compared to 1H 2017 (R856m; 30.6%)
 EBITDA of R620m up 7.3% (8.0% excl. effects from currency) with margin improvement 60bps to 21.3%
 Operating cash flow of R232m declined by 45.2%; working capital and non recurring gains from asset disposal
 HEPS increased by 11.5% to 104.0 cents vs. 93.3 cents in 1H 2017
 ROCE up to 22.7% vs. 22.4% in the previous reporting period from higher profits in the main
 Atmospheric Gases with growth in revenue of 2.7%from better volumes and pricing
 LPG revenue grew by 10.6% (6.9%1)) from higher volumes and change in LPG market price
 Hard Goods revenue reduced by -3.2% but with improved profitability from efficiencies and price
 Underlying Emerging Africa revenue was up 1.4% (-2.9% as reported) if adjusted for currency effects
1) Without effect from LPG
Commentsversus PY unless stated

Performance 30 June 2018
Highlights
1) Without effect from LPG market prices (+R35m), underlying revenueimprovement by 2.6%
2) Excl. effects from currency translation – Revenue(+R15m) +3.2%; GPADE (-R7m) +7.5%; EBITDA (-R4m) +8.0%
ZARm 2017 2018 YoY as reported (%)
Revenue 2 795 2 904 +3.9%1,2)
GPADE 856 913 +6.7%2)
EBITDA 578 620 +7.3%2)
EBITDA Margin 20.7% 21.3% +60bps
Operating Cash Flow 423 232 -45.2%
Headline EPS (cents) 93.3 104.0 +11.5%
Reported EPS (cents) 94.4 105.0 +11.2%
ROCE 22.4% 22.7% +30bps
▪ Revenue growth supported by positive LPG pass through effect from change in market price, positive price/volume mix
in LPG cylinder, Industrial Gases Bulk and increases in Healthcare volumes
▪ EBITDA improvement from better volumes, good cost inflation recovery and benefits from efficiencies generated across
the organisation
▪ Operating cash flow impacted by an increase in working capital at end of the reporting period
▪ HEPS/EPS increase from higher profits
▪ ROCE at 22.7% improved by 30bps vs. previous reporting period (22.4%)

Cash Flow 1H 2017 vs. 1H 2018
ZAR m 2017 2018 ∆ in %
Operating cash flows before W/C adj. 554 523 -5.6%
Working capital movement (131) (291) -122.1%
Operating Cash Flow 423 232 -45.2%
Interest, Tax and Dividends (317) (285) +10.1%
Investments and Financing (65) (160) -146.2%
Free cash flow 41 (213) -619.5%
Cash at the end of the period 1 194 1 131 -5.3%
0.6 0.6
0.3 0.3
0.2
12.9
16.6
18.6
22.4 22.7
Financial Performance: Key Indicators
Cash Flow impacted by ramped-up inventory, higher receivables at
end of period and prior year gain in disposal of asset
▪ Operating cash flow decreased from increase in working capital (R291m in 2018 compared to R131m in the PY) from
higher inventories for Hard Goods and LPG and increased receivables and lower payables at end of the reporting period
▪ Cash flows from Investments and financing increased as a result of share purchases for employee incentive programme
(R37m) and non-recurring proceeds of R93m from the sale of non-moveable assets
▪ Net debt continues to fall relative to EBITDA due to continued improvements in company’s EBITDA performance
▪ ROCE improved by 30bps compared to the same period in 2017 from higher profits in the main
ROCE
in %
Net Debt/
EBITDA
H1 Financial KPIs

Business Performance Operating Segments
GPADE better than PY with overall margin up by 80bps
1) GPADE is gross profit after distribution expenses
2) Excluding change in LPG market prices
3) Excluding impact of currency
1,131 1,162
2017 2018
Atmospheric Gases
+2.7%
947
1,047
2017 2018
LPG
+10.6%
341 330
2017 2018
Hard Goods
-3.2%
376 365
2017 2018
Emerging Africa
-2.9%
+6.9%2)
Revenue
378
414
2017 2018
+9.5%
184
221
2017 2018
+20.1%
132 129
2017 2018
-2.3%
162
149
2017 2018
-8.0%
GPADE1)
% Margin
+1.4%3)
-4.0%3)
33.4% 35.6% 19.4% 21.1% 38.7% 39.3% 43.1% 40.6%

PERFORMANCE DRIVERS

1) Includes non-recurring items from LPG production & filling cost
LowMediumHigh
EBITDA Development 2017 to 2018
A combination of better price/volume with efficiencies
covering cost inflation
1H 2017 1H 2018
▪ Political & socio economic issues
▪ LPG & CO2 supply Chain issues
▪ ASU plant reliability
Headwinds 2018 results
Price/Volume
Cost Inflation1)
Efficiences
Currency
Headwinds
EBITDA 2018
EBITDA 2017 578
620
+42
(+7,3%)
[ZAR m]

88%
12%
Current LPG Sources
Namibia
Botswana
Namibia
Zambia
Zimbabwe
LPG Supply
Afrox LPG Business
A combination of strong supply schemes and a large footprint
across its subsidiaries¹)
1) Zimbabwe is not a subsidiary of Afrox but a managed country on behalf of The Linde Group and is not reported within this set of numbers
Subsidiaries/Exports
South African Consumption
FY 2017 total volumes sold
155 Kilo tons
1.135
1.230
1H 2017 1H 2018
Afrox LPG Revenue
+8.4%
76.031 78.045
1H 2017 1H 2018
Volumes
+2.6%

▪ Port Elizabeth plant
finalisation with on-
stream date June ’15
▪ Hydrogen facility
Pelindaba
▪ Roll out Afrox Individual
Cylinder Tracking system
▪ Build up new filling site
Riverhorse, Durban
▪ Emerging Africa –
Micro-filling plants
▪ > 100k LPG cylinders
Investments: CAPEX 2014 to 2018 Estimates
Focus on asset maintenance, profitable growth and implementation at
four new provinces for the state Healthcare tender
▪ Commission new state of
the art filling site at
Riverhorse, Durban
▪ Automated filling for
Healthcare cylinders
▪ Pretoria ASU upgrade
▪ New Mozambique Maputo
site
▪ Zambia micro-fill plant
▪ Witbank plant upgrade
▪ PetroSA Catox
▪ Columbus Argon tanks
▪ Integrated cylinder valves
▪ Various new customer
installations/bulk tanks
▪ IT software and hardware
upgrade
▪ Various ASU plant
upgrades
▪ Upgrade distribution fleet
for bulk and cylinders
▪ Various new customer
Installations/bulk tanks
▪ State tender incl. as
customer installations
2014-15 AVG 2016 2017
438
389
350
2018 Estimates
482
Customer Installations
Replacement & Maintenance
SHEQ
Afrox spent on average 6.9% CAPEX to its Sales between 2014 and 2017
[ZAR m]

SHEQ Performance
Recordable injuries continued to reduce since 2009
▪ The total number of recordable injuries (Lost time
& medical treatment) has continued to trend
downwards YTD 2018
▪ MIRs have reduced further significantly since
2012
▪ Focused risk based action plans and interventions
are positively impacting the results
▪ Our continued efforts in safety awareness training
risk assessment/management and SHEQ stand-
down days across the business support the
continuing positive trend
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
31
25
28
22
8 6 8
9
16
4
40 61 45 61 31 22 24 25 18
6
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Total Recordable injuries: 2009-2018 YTD
MIR trend1)
Security Other
1) A MIR is an incident with a major outcomeand consequences which represents a significant non-compliance with Afrox's Safety, Security, Health, Environment and Quality (SHEQ) Policy

FINANCIAL RESULTS ANALYSED

▪ Petrochemical with higher volumes to Engen and Chevron to
support plant maintenance
▪ Revenue in Steel and Mining sectors down
▪ Healthcare yoy decline driven by lower pricing for
government tender with underlying volumes up
▪ Other (incl. e.g. paper) grew by 17% from higher demand at
various Industrial Gas customers
▪ Bulk, Special Gases and Healthcare volume
improvement offset by on-site volume declines
due to plant refurbishments and late lost contract
in PY
▪ Healthcare state tender award improved volumes
but eroded margins due to competitive pricing
▪ Overall better pricing in Atmospheric Gases
378 414
+2.7%
192 224
33 37
193 183
102 99
352 348
91 100
170 172
Atmospheric Gases
Revenue and margin up from higher volumes
and better plant utilisation
Financials Sales by Market Sector
Revenue
GPADE
2017 2018
(33.4%) (35.6%)
1,131 1,162
+9.5%
+2%
2017 2018
-1%
-3%
-5%
+12%
+17%
Food & Beverages
Petrochemical
Steel Industry
Mining
Healthcare
Automotive
Other
1,131 1,162
+10%

Volume (KT) Development 2016-18
▪ Growth in demand from cylinder business for
the SA hospitality market resulted in higher
volumes
▪ Revenue increased from higher volumes and
positive change in LPG market price (R35m)
▪ GPADE incl. positive non-recurring items from
LPG production & filling cost
19%
69%
12%
H1 2017 H1 2018
16%
55%
29%
Import vs. Local Refineries H1 2017 vs H1 2018
184 221
LPG
Improved volumes from increase in demand and supply from imports
Financials
Revenue
GPADE
2017 2018
(19.7%) (21.1)
947
1,047
+10.6%
+20.1%
+6.9%1)
1) Excluding change in LPG market prices
ImportsRefineriesBulk Trader
24.5 25.4 26.6
35.7 39.1 42.6
60.3 64.6 69.3
1H 2016 1H 2017 1H 2018
CylinderBulk
+7.1% +7.3%

130 124
22 21
14 14
27 26
21
19
64
60
63
66
▪ Decline in revenue and GPADE from lower demand for
welding consumables, safety devices and gas equipment
▪ Volumes down in most market sectors, in particular mining
and automotive industries
▪ Improved margin from good cost management at plants and
inflation recovery in most markets
(38.7%) (39.3%)
53%40%
7%
132 129
Hard Goods
Despite lower volumes, margin improvement achieved
through effective pricing
Financials Imports vs. Local Manufacture & Sector Development
Revenue
GPADE
2017 2018
341
330
-3.2%
-2.3%
Imports
Local Sourced
Local Manufactured
+5%
2017 2018
-6%
-10%
-4%
0%
-4%
-5%
Metals Industry
Mining
Automotive
Petrochemical
Food & Beverages
Construction & Manufacturing
Other
341
330

Emerging Africa
Performance impacted by currency movement,
LPG pass through effects and volume losses from lower demand
Underlying Performance
▪ Reported financials impacted by currency effects, LPG
pass through and lower volumes in some areas
▪ Underlying Revenue (excl. impact of LPG pass through,
currency translation) down 1.4% & GPADE down 4.0%
162 149
-4.0%1)
+1.4%1)
▪ Namibia: Revenue impacted by lower LPG and
CO2 volumes from lower demand
▪ Zambia: Revenue declined from pass through
effect of lower LPG market prices and GPADE
impacted by higher production cost
▪ Botswana: LPG supply was constraint and
impacted volumes sold and GPADE from higher
logistics cost
▪ Malawi: Good volumes from growth at most
customers
▪ Mozambique: Growth from
new customers in the emerging
Tete region
1) Adjusted for translation impact of currency
Revenue
GPADE
2017 2018
376
365
-2.9%
-8.0%

AFROX KEY FOCUS AREAS

▪ Strengthen Industrial Gas business
▪ Recover cost inflation
▪ Improve asset utilisation
▪ Continue growth in bulk Atmospheric Gases and LPG
▪ State healthcare business implementation engineering process
Key Focus Areas
Not confident Very confident
▪ Strengthen Hard Goods

INTERIM RESULTS
PRESENTATION 2018

Summary | Investment Case
✓ Stable and efficient operating model enabling
our business strategy
✓ Strongest footprint of all gas companies in Africa
especially SADC
✓ Part of global leader in industrial gases –
exposure to technology and best practise
✓ Secured LPG supply chain covering last mile to
the customer
✓ Well adjusted cost base plus ability to recover
cost inflation via combined product offering
✓ Diverse, less cyclical portfolio realising pockets
of growth despite tough economy
✓ Strong balance sheet, cash generative business
and net debt positive
✓ Attractive dividend policy
✓ Geared for growth with low cost- and
consolidated asset-base delivering economies of
scale
Integrated Offer around
our applications, products & services
African brand with strong footprint
in Sub-Saharan Africa
Atmospheric
Gases
LPG
Hard Goods Emerging Africa

Notes

Commentary
PERFORMANCE AT A GLANCE
EBIT (R’million)
0
100
200
300
400
500
20172018
436
399
+9.3%
EBITDA (R’million)
0
100
200
300
400
500
600
700
800
20172018
620
578
+7.3%
EPS (cents)
0
20
40
60
80
100
120
20172018
105
94.4
+11.2%
GPADE (R’million)
0
200
400
600
800
1 000
20172018
913
856
+6.7%
HEPS (cents)
0
20
40
60
80
100
120
20172018
104
93.3
+11.5%
Operating cashflow (R’million)
0
100
200
300
400
500
20172018
232
423
-45.2%
Revenue (R’million)
0
500
1 000
1 500
2 000
2 500
3 000
20172018
2904
2795
+3.9%

Commentary continued
PERFORMANCE HIGHLIGHTS
Afrox managed to increase both revenue and earnings before interest,
taxation, depreciation and amortisation (EBITDA) as a result of volume
increases in Liquefied Petroleum Gas (LPG), Healthcare and Bulk Industrial
Gases in combination with good cost control management and the impact
from efficiencies across the organisation. Emerging Africa was impacted by
fluctuations in currency and subdued economic growth in some countries.
Decline in volume in our Hard Goods business and marginal volume increases
in our Industrial Packaged Gas business was a result of low economic growth in
South Africa. Gross profit after distribution expenses (GPADE) for operations as
a whole improved by 6.7% to R913 million (2017: R856 million) or 7.5%
excluding currency effects. Our focus on cost containment resulted in only a 3%
increase in operating expenses during the period under review.
Due to the improvement in volumes in certain sectors of the business and
successful recovery of cost inflation by effective pricing mechanisms, revenue
increased by 3.9% to R2 904 million (2017: R2 795 million) or 2.1% excluding
effects from currency and LPG market price changes. The volume
improvement assisted by the continued drive to manage costs resulted in an
increase of 7.3% in EBITDA to R620 million (2017: R578 million). The EBITDA
margin improved by 60 bps to 21.3% (2017: 20.7%). The improvement in
EBITDA contributed to headline earnings per share increasing by 11.5% to
104 cents (2017: 93.3 cents) and basic earnings per share increasing by
11.2% to 105 cents (2017: 94.4 cents). Diluted earnings per share increased
by 10.0% to 103.8 cents (2017: 94.4 cents).
The increase in Trade Working Capital was as a result of increased inventory
build-up from overseas suppliers and an increase in Trade Receivables. Despite
the increased investment in Trade Working Capital, Afrox ended with a net cash
position of R131 million (December 2017: R344 million, impacted by proceeds
from property sales in 2017).
The lower level of capital expenditure of R140 million (2017: R169 million)
is indicative of the continued uncertainty in the economic climate and the
current overcapacity in the production facilities of the Group. Return on
capital employed (ROCE) improved marginally by 30 bps to 22.7%
(2017: 22.4%) reflecting the current weak economic environment.

BUSINESS REVIEW
Segmental analysis
The operating segments revenue and GPADE numbers in millions are included in the graphs below.
2017 Revenue (R’million)
232.0
423.0
2 795
1 131
376
341
947
2018 Revenue (R’million)232.0
423.0
2 904
1 162
365
330
1 047
2017 GPADE (R’million)
232.0
423.0
856
378
162
132
184
2018 GPADE (R’million)
232.0
423.0
913
414
149
129
221
Atmospheric Gases
LPG
Hard Goods
Emerging Africa

Overall revenue increased by 2.7% to R1 162 million (2017: R1 131 million),
reflecting revenue growth in all business areas of this operating segment.
There was encouraging volume growth from Healthcare and Bulk products
combined and overall effective price cost management in this segment. This
growth in revenue was achieved despite prevailing challenging economic
conditions, impacting our compressed gas cylinder business. The diverse
portfolio from a broad range of products and solutions within the Afrox
industrial gas business has shown high levels of resilience. The unique Afrox
offering led to an increase in market share and positive nominal growth
within most sectors and demonstrated Afrox’s ability to successfully compete
in its core segment. Within Industrial Gases (acetylene, oxygen, nitrogen
and argon) the demand for our Bulk products was above the comparative
period resulting in increased volumes at customer installations. On-site
revenue improved from pass through of higher electricity cost, volume
growth from various customers, compensating for the loss of a large
customer in the mining sector.
Packaged Gases volumes were below prior year levels. Improved recovery
of cost inflation via effective pricing management supported the improvement
in revenue. The continued growth in revenue from Medical Gases was as a
result of increased demand in the public and private hospital sector as well
as the growing Homecare market. Afrox was awarded the State Healthcare
tender and the implementation of further installations has commenced and
is expected to come onstream during 2019. The total revenue of this five-year
contract is estimated at approximately R1 billion.
Special Gases experienced reduced volumes from various customers. CO2
Bulk supply was constrained, resulting in lower than expected revenue.
GPADE improved by 9.5% to R414 million (2017: R378 million). Atmospheric
Gases GPADE margin further improved by 220bps through efficiencies and a
reduction in non-recurring cost in operations and distribution.
Atmospheric Gases
GPADE (R’million)
0
100
200
300
400
500
20172018
414
378
+9.5%
0
200
400
600
800
1 000
1 200
20172018
1162
1131
+2.7%

LPG
Revenue increased by 10.6% to R1,047 million (2017: R947 million) or 6.9%
on a comparable basis (adjusted for the change in LPG market prices). Higher
volumes enabled economies of scale and improved levels of supply
combined with non-recurring positive effects from improved cylinder
management resulted in strong GPADE growth of 20.1% to R221 million
(2017: R184 million). Production from local refineries was below the
comparative period which resulted in an increase in imported product.
Overall LPG product supply remains key in growing the domestic market as
imported product has become more competitive as a direct result of Afrox’s
efforts to offer a more reliable supply scheme.
The continued investment in additional LPG cylinders and the implementation
of an import programme to address short supply added to this positive
development. New business partnerships with selected BBBEE distributors
unlocked growth in the domestic and hospitality markets.
GPADE (R’million)
0
100
200
300
400
500
20172018
221
184
+20.1%
0
200
400
600
800
1 000
1 200
20172018
1047
947
+10.6%

Revenue decreased by 3.2% to R330 million (2017: R341 million) from lower
volumes as a result of reduced business activity in the South African mining
sector and lower than prior year production in the manufacturing industry.
Despite the overall negative trend in the related sectors of the economy,
revenue growth was supported by inflationary price increases and the
currency effects from imported products. We experienced a reduction in
volumes in welding, gas equipment and our Self Rescue Pack business area,
which were all negatively impacted upon by the continued downturn in
mining, iron and steel and manufacturing. Afrox is exploring various options
to strengthen supply, production and logistics of the operating segment,
continued focus on cost containment, efficiencies in our factories and
improved, just-in-time price management assisted the overall business
to mitigate the negative market trends.
GPADE decreased by 2.3% to R129 million (2017: R132 million). The
improvement in GPADE margin by 60bps to 39.3% is due to further efficiency
improvements, improved price cost recovery and long-term import contracts
with global suppliers.
Hard Goods
GPADE (R’million)
0
50
100
150
200
20172018
129
132
-2.3%
0
50
100
150
200
250
300
350
400
20172018
330
341
-3.2%

Emerging Africa
Revenue increased by 1.4% (adjusted for the negative effect from currency),
as reported revenue decreased by 2.9% to R365 million (2017: R376 million)
from higher volumes in some countries and adjustments for inflation in our
pricing. Emerging Africa experienced persistent weaker economic
conditions. Supply constraints in LPG and CO2
from South Africa to the
Emerging Africa subsidiaries exacerbated the reduction in volumes.
Mozambique reported volume growth and in Malawi volumes increased due
to an improved performance from LPG into the agricultural sector. GPADE,
excluding currency effects, decreased by 4.0% or 8.0% as reported to
R149 million. Emerging Africa’s GPADE margin reduced by 250bps to 40.6%
compared to June 2017.
GPADE (R’million)
0
50
100
150
200
20172018
149
162
-8.0%
0
50
100
150
200
250
300
350
400
20172018
365
376
-2.9%

Shares may not be dematerialised or rematerialised between Wednesday,
3 October 2018 and Friday, 5 October 2018, both days inclusive.
The local net dividend amount is 41.6 cents (2017: 36.8 cents) per share for
shareholders liable to pay Dividends Tax and 52.0 cents (2017: 46.0 cents)
per share for shareholders exempt from Dividends Tax.
In terms of the Dividends Tax, the following additional information is
disclosed:
– the dividend has been declared out of income reserves;
– the local Dividends Tax rate is 20%, subject to double tax agreement;
– Afrox currently has 308 567 602 ordinary shares (excluding treasury shares
of 34 285 308) in issue; and
– Afrox’s income tax reference number is 9350042710.
By order of the Board
Cheryl Singh 7 September 2018
Company Secretary Johannesburg
BOARD OF DIRECTORS
Mr R Gearing, a non-executive director (and member of the Safety, Health,
Environment and Quality Committee) resigned effective 18 February 2018.
DIVIDEND
It is the Company’s policy to consider dividends twice annually. The Board
has declared a cash dividend of 52.0 cents per share (2017: 46.0 cents),
declared out of the after-tax income for the six months ended 30 June 2018.
Based on Afrox’s policy the dividend is covered two times by headline
earnings per share.
OUTLOOK
The low economic growth is likely to continue for the rest of the financial
year. However, Afrox will focus on specific growth opportunities especially
the Healthcare Tender award, and continue with cost containment and
effective price cost recoveries.
NOTICE OF INTERIM DIVIDEND DECLARATION NUMBER 183
AND SALIENT FEATURES
Notice is hereby given that a gross cash dividend of 52.0 cents per ordinary
share, being the interim dividend for the six months ended 30 June 2018,
has been declared payable to all shareholders of Afrox recorded in the
register on Friday, 5 October 2018.
The salient dates for the declaration and payment of the interim dividend
are as follows:
Last day to trade ordinary shares “cum” dividend Tuesday, 2 October 2018
Ordinary shares trade “ex” the dividend Wednesday, 3 October 2018
Record date Friday, 5 October 2018
Payment date Monday, 8 October 2018

R’million
30 June
2018
6 months
reviewed
30 June
2017
6 months
reviewed
31 December
2017
12 months
audited
Revenue 2 904 2 795 5 693
Operating expenses (2 284) (2 217) (4 510)
Earnings before interest, taxation, depreciation and amortisation (EBITDA) 620 578 1 183
Depreciation and amortisation (184) (179) (328)
Earnings before interest and taxation (EBIT) 436 399 855
Finance expense (55) (53) (108)
Finance income 76 66 133
Profit before taxation 457 412 880
Taxation (126) (116) (242)
Profit for the period 331 296 638
Attributable to:
Owners of the Company 324 291 628
Non-controlling interests 7 5 10
Earnings per share – cents
Basic earnings per ordinary share – cents 105.0 94.4 203.6
Diluted earnings per ordinary share – cents 103.8 94.4 201.8
Condensed consolidated interim income statement
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
for the six months ended 30 June 2018

Condensed consolidated interim statement of comprehensive income
R’million
30 June
2018
6 months
reviewed
30 June
2017
6 months
reviewed
31 December
2017
12 months
audited
Other comprehensive income net of taxation 1 41 45
Items that are or may be reclassified to profit or loss 24 28 9
Translation differences on foreign operations 18 25 9
Translation differences relating to non-controlling interests 3 1 (1)
Cash flow hedges – effective portion of changes in fair value 3 2 1
Items that will not be reclassified to profit or loss (23) 13 36
Actuarial (losses)/gains on retirement benefit assets (23) 13 36
Total comprehensive income for the period 332 337 683
Total comprehensive income attributable to:
Owners of the Company 322 331 674
332 337 683

Condensed consolidated interim statement of financial position
R’million Note
30 June
2018
reviewed
30 June
2017
reviewed
31 December
2017
audited
ASSETS
Property, plant and equipment 4 2 933 2 945 2 964
Retirement benefits assets 473 439 484
Deferred taxation assets 13 14 13
Lease receivables 65 71 66
Other non-current assets 35 47 39
Non-current assets 3 519 3 516 3 566
Inventories 733 610 710
Trade and other receivables 1 299 1 138 1 094
Lease receivables 12 12 12
Derivative financial instruments 27 1 -
Receivables from fellow subsidiaries of holding company 131 90 130
Taxation receivable 65 53 57
Cash and cash equivalents 1 131 1 194 1 387
Current assets 3 398 3 098 3 390
Total assets 6 917 6 614 6 956
EQUITY AND LIABILITIES
Shareholders equity 4 119 3 804 4 001
Total equity 4 160 3 837 4 034
Long-term borrowings 1 000 400 1 000
Other long-term financial liability 21 24 20
Deferred taxation liability 613 571 591
Non-current liabilities 1 634 995 1 611
Trade, other payables and provisions 1 018 1 110 1 126
Taxation payable 37 21 26
Payables to fellow subsidiaries of holding company 68 51 96
Derivative financial instruments - - 20
Short-term portion of long-term borrowings - 600 -
Bank overdrafts - - 43
Current liabilities 1 123 1 782 1 311
Total equity and liabilities 6 917 6 614 6 956

Condensed consolidated interim statement of cash flows
R’million
30 June
2018
6 months
reviewed
30 June
2017*
6 months
reviewed
31 December
2017*
12 months
audited
Adjustments for:
Depreciation and amortisation 184 179 328
Movements in trade receivable allowances, inventory write-downs and provisions* (18) (33) (58)
Movement in valuation (gain)/loss on derivative financial instruments* (43) (9) 11
Other non-cash movements* (36) 18 (37)
Operating cash flows before working capital adjustments 523 554 1 099
Working capital adjustments (291) (131) (102)
Cash generated from operations 232 423 997
Interest paid (54) (51) (105)
Interest received 39 31 74
Taxation paid (100) (124) (235)
Dividends received - - 1
Cash available from operating activities 117 279 732
Dividends paid to owners of the parent (167) (173) (315)
Dividends to non-controlling interests (3) - (3)
Net cash (outflow)/inflow from operating activities (53) 106 414
Additions to property, plant and equipment (140) (169) (350)
Intangible assets acquired - (1) -
Proceeds from disposal of property, plant and equipment 6 93 106
Other investing activities 11 12 28
Net cash outflow from investing activities (123) (65) (216)
Incentive share scheme shares purchased on behalf of employees (37) - (7)
Net cash outflow from financing activities (37) - (7)
Net (decrease)/increase in cash and cash equivalents (213) 41 191
Cash and cash equivalents at the beginning of the period 1 344 1 153 1 153
Cash and cash equivalents at the end of the period 1 131 1 194 1 344
* Restated. Refer to note 10.

Condensed consolidated interim statement of changes in equity
for the six months ended 30 June 2018 Attributable to owners of the Company
R’million
Share
capital
and share
premium
FCTR* and
hedging
reserves
Retained
earnings
Non-
controlling
interests
Total
equity
Balance at 1 January 2017 552 (97) 3 202 27 3 684
Total comprehensive income - 27 304 6 337
Profit for the year - - 291 5 296
Other comprehensive income, net of taxation - 27 13 1 41
Transactions with owners
Share based payments, net of taxation - - (11) - (11)
Dividends - - (173) - (173)
Balance at 30 June 2017 552 (70) 3 322 33 3 837
Balance at 1 January 2017 552 (97) 3 202 27 3 684
Profit for the period - - 628 10 638
Other comprehensive income, net of taxation - 10 36 (1) 45
Shares purchased on behalf of employees - - (7) - (7)
Dividends - - (315) (3) (318)
Balance at 31 December 2017 552 (87) 3 536 33 4 034
Balance at 1 January 2018, as previously reported ** 552 (87) 3 536 33 4 034
Adjustment on initial application of IFRS 9 (net of taxation) - - 8 1 9
Adjusted balance at 1 January 2018 552 (87) 3 544 34 4 043
Profit for the period - - 324 7 331
Other comprehensive income, net of taxation - 21 (23) 3 1
Transactions with owners
Shares purchased on behalf of employees#
- - (37) - (37)
Dividends - - (167) (3) (170)
Balance at 30 June 2018 552 (66) 3 633 41 4 160
* Foreign currency translation reserve.
** The group has initially adopted IFRS 15 and IFRS 9 at 1 January 2018. Under the transition method chosen, comparative information is not restated.
#
Shares purchased in respect of the employee share incentive scheme.

Segmental report
R’million
30 June
2018
6 months
reviewed
30 June
2017
6 months
reviewed
31 December
2017
12 months
audited
Revenue* 2 904 2 795 5 693
Atmospheric Gases 1 162 1 131 2 283
LPG 1 047 947 1 994
Hard Goods 330 341 660
Emerging Africa 365 376 756
Gross profit after distribution expenses (GPADE) 913 856 1 770
Atmospheric Gases 414 378 777
LPG 221 184 425
Hard Goods 129 132 242
Emerging Africa 149 162 326
Reconciliation of GPADE to EBIT
GPADE for business segments 913 856 1 770
Other operating expenses (477) (457) (915)
Geographical representation
Revenue 2 904 2 795 5 693
South Africa 2 539 2 419 4 937
Emerging Africa^
365 376 756
Non-current assets 3 519 3 516 3 566
South Africa 3 255 3 283 3 311
Emerging Africa^
264 233 255
* Revenue from external customers.
^The revenue and non-current assets foreign country geographical split has been aggregated as Emerging Africa. The individual amounts are considered to be immaterial.

Business segments are identified on the basis of internal reports that are regularly reviewed by the Group’s and Company’s chief operating decision making
body, the executive directors, in order to allocate resources to the segments and assess its performance. The performance of the segments is managed and
evaluated using revenue and gross profit after distribution expenses only. Assets and liabilities are centrally managed at a corporate level and therefore not
used in the decision to allocate resources to operating segments. Business segments have been determined based on: Atmospheric Gases, LPG, Hard Goods
and Emerging Africa.

Statistics and ratios
30 June
2018
6 months
reviewed
30 June
2017
6 months
reviewed
31 December
2017
12 months
audited
Average number of shares in issue during the period (‘000) 308 568 308 568 308 568
Shares in issue (‘000) 308 568 308 568 308 568
Dividends per share (cents) 52.0 46.0 100.0
Final 54.0
Interim 52.0 46.0 46.0
Ratios
EBITDA margin (%) 21.3 20.7 20.8
Return on capital employed 22.7 22.4 23.7
Effective taxation rate (%) 27.6 28.2 27.5
Gearing (%) (3.3) (5.4) (10.0)
Dividend cover on headline earnings (times) 2.0 2.0 2.0

African Oxygen Limited (‘Afrox’ or the ‘Company’) is a South African registered company. The condensed consolidated interim financial statements of the Company comprise
the Company and its subsidiaries (together referred to as the ‘Group’) and the Group’s interest in an associate and a trading trust.

1. BASIS OF PREPARATION
The condensed consolidated interim financial statements are prepared in accordance with and containing the information required by the International Financial
Reporting Standard (IAS) 34 Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial
Pronouncements as issued by Financial Reporting Standards Council and the requirements of the Companies Act of South Africa. The accounting policies applied in the
preparation of these interim financial statements are in terms of International Financial Reporting Standards and, except as described in note 2, are consistent with
those applied in the annual financial statements for the year ended 31 December 2017.
The condensed consolidated interim financial statements are prepared on the historical cost basis except for the following items which are measured using an
alternative basis at each reporting date:
– Derivative financial instruments measured at fair value through other comprehensive income;
– Retirement benefit assets measured at the fair value of the planned assets less the present value of the defined benefit obligation; and
– Share-based payment awards are measured at fair value. The fair value of the equity instruments granted is estimated using industry-accepted techniques.
The directors take full responsibility for the preparation of the these condensed consolidated interim financial statements. The condensed consolidated interim financial
statements were compiled under the supervision of Matthias Vogt, Group Financial Director, and were approved on 7 September 2018.
2. NEW ACCOUNTING STANDARDS AND RELATED CHANGES IN SIGNIFICANT ACCOUNTING POLICIES
The Group has adopted the following new standards and amendments to standards, including any consequential amendments to other standards, with a date of initial
application at 1 January 2018:
- Foreign Currency Transactions and Advance Consideration (IFRIC 22); and
- Clarifying Share-Based Payment Accounting (Amendment to IFRS 2).
The adoption of the amendments to standards listed above did not have a significant impact on the Group’s condensed consolidated interim financial statements.
The Group has adopted IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments from 1 January 2018.
IFRS 15 Revenue from Contracts with Customers
IFRS 15 established a comprehensive framework for determining whether, how much and when revenue is recognised. It replaces IAS 18 Revenue, IAS 11 Construction
Contracts and related interpretations. The Group has adopted IFRS 15 using the cumulative effect method (without practical expedients), with the effect of initially
applying this standard recognised at the date of initial application (1 January 2018). Accordingly, the information presented for 2017 has not been restated.
(i) Overall financial effect
When compared to IAS 18, there is no quantitative impact on the adoption of IFRS 15 on the statement of profit and loss, financial position, cash flows, changes in equity
and the segmental analysis.
Notes to the condensed consolidated interim financial statements

(ii) Disclosure effect regarding accounting policies
The adoption of IFRS 15 did not have a disclosure impact on the Group’s condensed consolidated interim financial statements.
IFRS 9 Financial Instruments
IFRS 9 sets out requirements for recognising and measuring financial assets, financial liabilities and some contracts to buy or sell non-financial items. This standard
replaces IAS 39 Financial Instruments: Recognition and Measurements.
(i) Overall financial effect
The transition to IFRS 9 resulted in an increase to retained earnings and non-controlling interest as follows:
R’million
Retained
earnings
Non-controling
interest
Recognition of expected credit losses under IFRS 9 11 2
Related tax (3) (1)
Impact at 1 January 2018 8 1
(ii) Effect of classification and measurement of financial assets and financial liabilities
IFRS 9 largely retains the existing requirements in IAS 39 for the classification and measurement of financial liabilities. However, it eliminates the previous IAS 39
categories for financial assets of held to maturity, loans and receivables and available for sale assets. The adoption of IFRS 9 has not had a significant effect on the
Group’s accounting policies related to financial liabilities and derivative financial instruments. The impact of IFRS 9 on the classification and measurement of financial
assets is set out below.
Initial recognition
Under IFRS 9, on initial recognition, a financial asset is classified as measured at:
- amortised cost;
- fair value through other comprehensive income (‘FVOCI’) – debts investment; and
- fair value through profit and loss (‘FVTPL’).
The classification of financial assets under IFRS 9 is generally based on the business model in which a financial asset is managed and its contractual cash flow
characteristics.
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
- it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
- its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial
recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost, or at FVOCI as at FVTPL if
doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
Notes to the condensed consolidated interim financial statements continued

A financial asset (unless it is a trade receivable without a significant financing component that is initially measured at the transaction price) is initially measured at fair
value plus, for items not at FVTPL, transaction costs that are directly attributable to at acquisition.
Subsequent recognition
The following accounting policies apply to the subsequent measurement of financial assets.
Financial assets at FVTPL
These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss.
Financial assets at amortised cost
These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income,
foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
Financial assets FVOCI
These assets are subsequently measured at fair value. On maturity, any fair value gain or loss is capitalised to the cost of the asset for which the derivative financial
instrument was acquired.
The effects of adopting IFRS 9 on the carrying amounts of financial assets at 1 January 2018 relates solely to the impairment requirements. The table below explains the
original measurement categories under IAS 39 and the new measurement categories under IFRS 9 for each class of the Group’s financial assets as at 1 January 2018.
R’million
Financial assets
Original classification
under IAS 39
New classification
under IFRS 9
Original carrying
amount under IAS 39
New carrying amount
under IFRS 9 Difference
Trade receivables Loans and receivables Amortised cost 1 094 1 105 11
Receivables from fellow subsidiaries
of holding company Loans and receivables Amortised cost 130 130 –
When compared to the accounting policies as disclosed for the year ended 31 December 2017, the adoption of IFRS 9 did not have an impact on the Group’s derivative
financial instruments.
(iii) Effect of impairment of financial assets
IFRS 9 replaces the ‘incurred loss’ model in IAS 39 with an ‘expected credit loss’ (ECL) model. The new impairment model applies to financial assets measured at
amortised cost, contract assets and debt investments at FVOCI, but not to investments in equity instruments. Financial assets at amortised costs consist of trade
receivables and cash and cash equivalents.

Under IFRS 9, loss allowances are measured on either of the following bases:
- 12-month ECLs: there are ECLs that result from possible default events within the 12 months after the reporting date; and
- lifetime ECLs: these are ECLs that result from all possible default events over the expected life of a financial instrument.
The Group measures loss allowances at an amount equal to the lifetime ECLs, except for bank balances for which credit risk (i.e. the risk of default occurring over the
expected life of the financial instrument) has not increased significantly since initial recognition. The loss allowance for trade receivables is measured at an amount
equal to the lifetime ECL.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Group considers
reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and
analysis, based on the Group’s historical experience and informed credit assessment and includes forward-looking information.
Current period loss allowance adjustments are not considered to be material.
Financial effect of the new impairment model
The Group has determined that the application of IFRS 9 impairment requirements as 1 January 2018 has resulted in a decrease in the impairment allowance as follows:
R’million
Loss allowance at 31 December 2017 under IAS 39 87
Decreased impairment recognised as at 1 January 2018 on:
– Trade receivable as at 31 December 2017 (11)
Loss allowance at 1 January 2018 under IFRS 9 76

3. FORTHCOMING CHANGES IN ACCOUNTING POLICIES
IFRS 16 Leases
The Group is continuing with its assessment of the potential impact of the adoption of IFRS 16 on the financial statements. Based on this assessment, the Group is
expecting to recognise significant right of use assets and lease liabilities relating to current properties and vehicle operating leases. The Group is in the process of
evaluating whether certain items of property, plant and equipment, that are not leased items in terms of IAS 17 and IFRC 4, may qualify as leased items in terms of
IFRS 16. The standard is effective for annual periods beginning on or after 1 January 2019.
This standard will not be adopted early.
IFRIC 23 Uncertainty over Income Tax Treatment
IFRIC 23 clarifies the accounting for income tax treatments that have yet to be accepted by tax authorities. Specifically, IFRIC 23 provides clarity on how to incorporate
this uncertainty into the measurement of tax as reported in the financial statements. IFRIC 23 does not introduce any new disclosures but reinforces the need to comply
with existing disclosure requirements about judgments made, assumptions and other estimates used, and the potential impact of uncertainties that are not reflected.
No significant impact is expected on disclosures. IFRIC 23 applies for annual periods beginning on or after 1 January 2019.
This standard will not be adopted early.

R’million
30 June
2018
6 months
reviewed
30 June
2017
6 months
reviewed
31 December
2017
12 months
audited
4. PROPERTY, PLANT AND EQUIPMENT
Opening carrying value 2 964 2 952 2 952
Additions, net of transfers from assets under construction 140 169 350
Disposals (1) (3) (8)
Depreciation (181) (172) (316)
Translation differences 11 (1) (14)
Closing carrying value 2 933 2 945 2 964
5. FAIR VALUE CLASSIFICATION AND MEASUREMENT
Accounting classification and fair value
The classification of each class of financial assets and liabilities, and their fair values are:
R’million Fair Value
30 June 2018
Financial asset measured at fair value
Derivative financial instruments 27
31 December 2017
Financial liability measured at fair value
30 June 2017
Financial asset measured at fair value
The derivatives are a level 2 measurement and the fair value of the derivative financial instruments is based on broker quotes. Similar contracts are traded in an active
market and the quote reflect the actual transactions in similar instruments. The carrying value of all other financial instruments closely approximates their fair value
due to the short-term nature or market related terms.
Selected notes to the condensed consolidated interim financial statements

6. EARNINGS AND HEADLINE EARNINGS PER SHARE
Headline earnings per share is calculated on headline earnings of R321 million (2017: R288 million) and a weighted average number of ordinary shares of
308 567 602 (2017: 308 567 602) in issue during the period was used to calculate headline earnings per share and 312 155 764 (2017: 308 567 602) for dilutive
earning per share as 3 588 162 (2017: Nil) shares had a dilutive impact.
Reconciliation between earnings and headline earnings
R’million
30 June
2018
6 months
reviewed
30 June
2017
6 months
reviewed
31 December
2017
12 months
audited
Profit for the period attributable to the owners of the Company 324 291 628
Adjusted for the effects of:
Profit on disposal of property, plant and equipment (5) (5) (11)
Taxation on profit on disposal of property, plant and equipment 2 2 3
Headline earnings 321 288 620
Basic earnings per share – cents 105.0 94.4 203.6
Diluted earnings per share – cents 103.8 94.4 201.8
Headline earnings per share – cents 104.0 93.3 201.0
Diluted headline earning per share – cents 102.8 93.3 199.2
Selected notes to the condensed consolidated interim financial statements continued

Selected notes to the condensed consolidated interim financial statements continued
7 RELATED PARTY TRANSACTIONS
During the year, Afrox, in the ordinary course of business, entered into various sale, purchase and service transactions with associate, receivables from fellow
subsidiaries of holding company, receivables from group companies, payables to fellow subsidiaries of holding company and payables to group companies.
8 UPDATE ON KEY LITIGATION MATTERS
Afrox was a respondent in an investigation by the Competition Commission of South Africa with respect to the LPG sector. Afrox fully cooperated with the Commission’s
investigation. As at the date of this report, there is no other outstanding litigation of a material nature against the Group.
9 SUBSEQUENT EVENTS
Other than the matter referred to in note 8 above, the directors are not aware of any matter or circumstance arising between 30 June 2018 and the date of this report.
10 RESTATEMENT OF PRIOR PERIODS
The 30 June 2017 interim statement of cash flows and the 31 December 2017 annual statement of cash flows were restated to separately disclose the following:
- Movements in trade receivable allowances, inventory write-downs and provisions;
- Movement in valuation of derivative financial instruments; and
- Other non-cash movements.
The restatement did not have any impact on the condensed consolidated statement of cash flows for the six months ended 30 June 2017 and for the year ended
31 December 2017.
11 INDEPENDENT REVIEW BY THE AUDITORS
The condensed consolidated interim financial statements for the six months ended 30 June 2018 have been reviewed by KPMG Inc., who expressed an unmodified
review conclusion. The auditor’s report does not necessarily report on all of the information contained in these financial results. Shareholders are therefore advised that
in order to obtain a full understanding of the nature of the auditor’s engagement they should obtain a copy of the auditor’s report together with the accompanying
financial information from the issuer’s registered office.

Corporate information
African Oxygen Limited
(Incorporated in the Republic of South Africa)
Registration number: 1927/000089/06
ISIN: ZAE000067120 JSE code: AFX
NSX code: AOX
Transfer secretaries: Computershare Investor Services (Pty) Limited
Sponsor in South Africa: One Capital
Sponsor in Namibia: Namibia Equity Brokers (Pty) Limited
Directors: S Venter (Managing Director), M Vogt* (Group Financial Director ), B Eulitz* (Chairman), M von Plotho*, Dr KDK Mokhele, CF Wells**, NVL Qangule,
GJ Strauss, VN Fakude
*German **British
Company Secretary: C Singh
Auditors: KPMG Inc.
Registered office
Afrox House, 23 Webber Street, Selby
Johannesburg 2001
PO Box 5404, Johannesburg 2000
Telephone +27 (11) 490 0400

GREYMATTER FINCH # 12742

Afrox Interim Results 2018

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