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Audited Results - Omnia

Release Date: 19/03/1998 08:04:21      Code(s): OMN
OMNIA HOLDINGS LIMITED (REG. NO. 67/03680/06)
HIGHLIGHTS
HEADLINE EARNINGS UP 18%
DEBT : EQUITY DOWN FROM 73% TO 13%
CASH FLOW FROM OPERATIONS OF R117 MILLION
THE AUDITED RESULTS OF THE GROUP FOR THE YEAR ENDED 31 DECEMBER 1997 COMPARED
WITH THE AUDITED RESULTS FOR THE PREVIOUS YEAR APPEAR BELOW:
AUDITED RESULTS
FOR THE YEAR ENDED 31 DECEMBER 1997
CONSOLIDATED INCOME STATEMENTS
                                                1997        1996
                                                R000        R000         %
SALES                                           1 066 213   1 062 996    0%
CONTINUING OPERATIONS                           1 064 803   1 002 729    6%
DISCONTINUED OPERATIONS                         1 410       60 267
OPERATING PROFIT                                124 742     107 834      16%
CONTINUING OPERATIONS                           118 495     100 363      18%
DISCONTINUED OPERATIONS                         6 247       7 471
FINANCIAL COSTS                                 33 989      38 687      -12%
PROFIT BEFORE TAXATION                          90 753      69 147       31%
TAXATION                                        18 322      8 684
PROFIT BEFORE RETAINED PROFIT OF ASSOCIATES     72 431      60 463       20%
SHARE OF RETAINED PROFIT OF ASSOCIATES          1 285       1 763
PROFIT AFTER TAXATION                           73 716      62 226       18%
ATTRIBUTABLE TO OUTSIDE SHAREHOLDERS            614         897
NET PROFIT                                      73 102      61 329       19%
ORDINARY DIVIDENDS                              28 686      24 034       19%
RETAINED EARNINGS FOR THE YEAR                  44 416      37 295
DEPRECIATION                                    20 782      21 022
EARNINGS PER SHARE (CENTS)                      188,6       158,2        19%
SHARES IN ISSUE (000`S)                         38 765      38 765
DIVIDENDS PER SHARE (CENTS)                     74          62           19%
DIVIDEND COVER                                  2,5         2,6
HEADLINE EARNINGS PER SHARE (CENTS)             171,9       145,5        18%
FULLY DILUTED EARNINGS                          73 716      62 226       18%
FULLY DILUTED NO. OF SHARES IN ISSUE (000`S)*   40 745      40 867
FULLY DILUTED EARNINGS PER SHARE (CENTS)        180,9       152,3        19%
RETURN ON ORDINARY SHAREHOLDER'S EQUITY         31,5%       32,9%
* FULLY DILUTED NO. OF SHARES IN ISSUE IS AFTER TAKING INTO ACCOUNT THE
DILUTION ARISING ON THE POTENTIAL ISSUE OF 1,5 MILLION SHARES IN TERMS OF THE
PARTNERSHIP WITH MANAGEMENT SCHEME  AND
0,48 MILLION SHARES FOR SHARE OPTIONS GRANTED BUT NOT PROVIDED FOR IN THE SHARE
INCENTIVE SCHEME.
CONSOLIDATED ABRIDGED BALANCE SHEETS
                                                1997        1996
                                                R000        R000
CAPITAL EMPLOYED
ORDINARY SHAREHOLDERS EQUITY                    255 852     207 632
OUTSIDE SHAREHOLDERS` INTEREST                  1 500       1 500
LONG-TERM LIABILITIES                           32 798      55 950
DEFERRED TAXATION                               528         613
                                                290 678     265 695
EMPLOYMENT OF CAPITAL
FIXED ASSETS AND INVESTMENTS                    208 130     207 862
NET CURRENT ASSETS                              82 548      57 833
CURRENT ASSETS                                  427 700     456 965
CURRENT LIABILITIES                             345 152     399 132
                                                290 678     265 695
CURRENT RATIO                                   1,24        1,14
NET INTEREST BEARING DEBT                       33 309      153 333
DEBT TO EQUITY                                  13%         73%
NET WORTH PER SHARE (CENTS)                     660         536
CAPITAL EXPENDITURE - INCURRED                  46 840      67 147
- AUTHORISED AND NOT
COMMITTED                                       98 808      21 693
- AUTHORISED AND
COMMITTED                                       32 835      1 5121
CONSOLIDATED ABRIDGED CASH FLOW
                                                1997        1996
                                                R000        R000
GENERATED BY OPERATIONS                         142 568     117 796
FINANCIAL COSTS AND TAXATION                   (45 309)    (35 301)
GENERATED FROM / (RETAINED FOR)
WORKING CAPITAL                                 20 158     (55 641)
AVAILABLE FROM OPERATING ACTIVITIES             117 417     26 854
DIVIDENDS PAID                                 (24 581)    (20 556)
CASH FLOW FROM OPERATING ACTIVITIES             92 836      6 298
GENERATED FROM / UTILISED IN
INVESTMENT ACTIVITIES                           27 188     (49 242)
NET CASH INFLOW / (OUTFLOW) FOR YEAR            120 024    (42 944)
COMMENT
OPERATING PERFORMANCE
THE YEAR WAS CHARACTERISED BY CONSIDERABLE UNCERTAINTY CAUSED BY THE NEGATIVE
PUBLICITY SURROUNDING THE EL NINO PHENOMENA AND BY A DECLINE IN THE PRICE OF
NITROGENOUS FERTILIZER. AGAINST THIS BACKGROUND, THE ATTAINMENT OF ATTRIBUTABLE
EARNINGS OF R73 MILLION AND THE REDUCTION IN TOTAL DEBT FROM R153 MILLION TO
R33 MILLION IS PLEASING.
ALTHOUGH TOTAL SALES INCREASED MARGINALLY, SALES FROM CONTINUING OPERATIONS
INCREASED BY 6% TO R1,07 BILLION. TOTAL OPERATING INCOME IMPROVED BY 16% WITH
OPERATING INCOME FROM CONTINUING OPERATIONS REACHING A NEW HIGH OF
R118,5 MILLION, 18% UP ON 1996. ALL THREE CORE BUSINESSES CONTRIBUTED TO THIS,
WITH THE GREATEST PERCENTAGE IMPROVEMENT COMING FROM EXPLOSIVES AND INDUSTRIAL
CHEMICALS. FINANCE COSTS REDUCED BY R4,7 MILLION, AIDED BY CASH REALISED FROM
THE SALE OF NON CORE ASSETS. PROFIT BEFORE TAX INCREASED BY 31% TO R90,7
MILLION, BUT AN INCREASE IN THE TAX RATE FROM 13% TO 20% RESULTED IN EARNINGS
PER SHARE SHOWING AN INCREASE OF 19% TO 188,6 CENTS PER SHARE.
REFINEMENT OF FOCUS
THE GROUP HAS REFINED ITS FOCUS TO CONCENTRATE ON THE THREE CORE BUSINESSES OF
FERTILIZER, EXPLOSIVES AND INDUSTRIAL CHEMICALS AND TO GROW THESE
GEOGRAPHICALLY IN AFRICA. AS A CONSEQUENCE OF THIS REFOCUS, THE SEED AND
FARMING OPERATIONS WERE DISPOSED OF IN THE YEAR.
FERTILIZER
THE BARRAGE OF NEGATIVE PUBLICITY SURROUNDING EL NINO LED TO A REDUCTION OF 14%
IN THE SIZE OF MAIZE PLANTINGS WHICH RESULTED IN A REDUCTION OF 8% IN OVERALL
DOMESTIC FERTILIZER DEMAND AND HENCE LOWER SALES VOLUMES FOR OMNIA FERTILIZER.
MAIZE PRICES RESPONDED BY REACHING RECORDED HIGHS. THE EFFECTS OF EL NINO ARE,
HOWEVER, LESS ONEROUS THAN HAD BEEN PREDICTED AND THOSE FARMERS WHO HAVE
PLANTED STAND TO BENEFIT FROM A NEAR NORMAL YIELD AT RECORD PRICES.
A SUPPLY/DEMAND IMBALANCE IN THE GLOBAL NITROGENOUS FERTILIZER MARKET LED TO
DRAMATIC PRICE REDUCTIONS WHICH IN TURN CAUSED A DROP IN BOTH AMMONIA INPUT
COSTS AND FERTILIZER SELLING PRICES. THE DECREASE IN DOMESTIC SALES PRICES WAS
OFFSET BY THE LOWER COSTS OF PURCHASED NITROGENOUS INPUTS SO THAT OVERALL
MARGINS WERE MAINTAINED. THE SPECIALITY DIVISION CONTINUES TO SHOW STRONG
GROWTH. THE BOARD APPROVED THE CONSTRUCTION OF A STATE OF THE ART GRANULATION
PLANT TO REPLACE AN AGED EXISTING UNIT AT A TOTAL COST OF R96 MILLION.
OVERALL, FERTILIZER RECORDED A GROWTH IN PROFIT OVER THE PREVIOUS YEAR.
MINING EXPLOSIVES
BULK MINING EXPLOSIVES PRODUCED FURTHER GROWTH IN NET INCOME AS VOLUMES IN THE
TRADITIONAL OPEN CAST BULK EXPLOSIVES MARKET IMPROVED AND MARGINS BENEFITTED
FROM A REDUCTION IN AMMONIA PRICES.
PRODUCTION PROBLEMS WERE EXPERIENCED AT THE LOSBERG CARTRIDGE EXPLOSIVES PLANT
WHICH HAVE LARGELY BEEN RESOLVED. ACCESSORY SALES VOLUMES INCREASED AS DID
MARGINS RESULTING IN FIRST TIME CONTRIBUTION TO EARNINGS FROM THIS DIVISION.
OVERALL, MINING EXPLOSIVES RECORDED A SUBSTANTIAL IMPROVEMENT IN PROFITS.
INDUSTRIAL CHEMICALS
INTABA CHEMICALS RECORDED A HEALTHY IMPROVEMENT IN PROFITS. IT'S CONTRIBUTION
TO GROUP PROFITS IS BECOMING SIGNIFICANT AND IS EXPECTED TO BECOME INCREASINGLY
SO. THE R9,5 MILLION ALLUMINIUM TRIHYDRATE PLANT IS EXPECTED TO BE COMMISSIONED
IN LATE 1998.
INTERNATIONAL
CHEMICAL HOLDING INTERNATIONAL, THE GROUP'S INTERNATIONAL INVESTMENT, TRADING
AND FINANCING ARM CONTINUED TO DEVELOP INTO AFRICAN MARKETS IN 1997 INCREASING
ITS PRESENCE IN ZIMBABWE AND COMMISSIONING A FERTILIZER BLENDING PLANT THERE,
AND INTO KENYA, WITH THE LAUNCH OF THE GROUPS RANGE OF SPECIALITY FERTILIZERS.
PROSPECTS
THE 1997 AGRICULTURAL YEAR HAS BEEN A REASONABLY GOOD ONE FOR MOST AREAS OF
SOUTHERN AFRICA WITH GOOD RAINS AND HIGH PRICES FOR MAIZE. THIS SHOULD IMPROVE
FARMING INCOME WHICH WILL BENEFIT FERTILIZER DEMAND IN THE COMING SEASON.
GLOBAL NITROGENOUS FERTILIZER PRICES ARE EXPECTED TO REMAIN LOW WHICH WILL
ASSIST IN MAINTAINING FERTILIZER MARGINS.
AN IMPROVEMENT IN PERFORMANCE AT THE CARTRIDGE EXPLOSIVES PLANT, AS WELL AS
EXPECTED HIGHER EARNINGS FROM THE BULK EXPLOSIVES AND ACCESSORIES OPERATIONS
SHOULD LEAD TO A SIGNIFICANT IMPROVEMENT IN THE MINING EXPLOSIVES PROFIT. THE
OTHER DIVISIONS ARE ALSO EXPECTED TO IMPROVE THEIR PROFITS. THE GROUP EXPECTS
TO AGAIN PRODUCE REAL EARNINGS GROWTH IN 1998.
DIVIDENDS
THE TOTAL DIVIDEND FOR 1997 HAS BEEN INCREASED BY 19% TO 74 CENTS PER SHARE
BY ORDER OF THE BOARD
J G PRETORIUS - CHAIRMAN N J CROSSE - MANAGING DIRECTOR
17 MARCH 1998 DECLARATION OF FINAL DIVIDEND
A FINAL DIVIDEND OF 42 CENTS PER ORDINARY SHARE IN RESPECT OF THE FINANCIAL
YEAR ENDED 31 DECEMBER 1997 HAS BEEN DECLARED PAYABLE TO SHAREHOLDERS
REGISTERED IN THE BOOKS OF THE COMPANY AT THE CLOSE OF BUSINESS ON 3 APRIL
1998. DIVIDEND CHEQUES WILL BE POSTED BY 4 MAY 1998 TO SHAREHOLDERS AT THEIR
REGISTERED ADDRESSES OR IN ACCORDANCE WITH INSTRUCTIONS GIVEN TO THE TRANSFER
SECRETARIES AND RECEIVED BY THEM ON OR BEFORE 3 APRIL 1998.
BY ORDER THE BOARD P R JANSE VAN RENSBURG - COMPANY SECRETARY 17 MARCH 1998
TRANSFER SECRETARIES: OPTIMUM REGISTRARS (PTY) LIMITED, 40 COMMISSIONER STREET,
JOHANNESBURG, 2001. PO BOX 62391, MARSHALLTOWN, 2107.
DIRECTORS: J G PRETORIUS (CHAIRMAN), N J CROSSE (MANAGING DIRECTOR), N K H
FITZ-GIBBON, A G FLETCHER, W T MARAIS (DEPUTY CHAIRMAN), W T MARAIS JR.
(ALTERNATIVE), J C ROBBERTZ, P A SPRINGETT, T G WAGNER, DR. R K J WINKLER*, O J
WINKLER*, (DEPUTY CHAIRMAN)  *GERMAN



                                        
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