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Omnia Holdings Limited - Interim Results For The Six Month Period Ended

Release Date: 20/11/2001 11:59:33      Code(s): OMN
September 2001
(Incorporated in the Republic of South Africa)
(Registration number 1967/003680/06)
("Omnia" or "the Group")
(Share code: OMN)
(ISIN code: ZAE000005153)
INTERIM RESULTS for the six month period ended September 2001
CONSOLIDATED INCOME STATEMENTS
  Unaudited    Unaudited                          Unaudited         Audited
   6 months     6 months                          12 months       15 months
1/4/2000 to  1/4/2001 to                        1/4/2000 to     1/1/2000 to
  30/9/2000    30/9/2001                         31/03/2001      31/03/2001
                         R'000
    632 326      729 498 Revenue                  1 479 266       1 767 314
  (439 206)    (514 253) Cost of sales          (1 007 464)     (1 219 364)
    193 120      215 245 Gross profit               471 802         547 950
  (158 863)    (171 066) Operating costs          (371 338)       (466 199)
                         before depreciation
                         and net of other
                         income
     34 257       44 179 EBITDA                     100 464          81 751
   (18 796)     (19 471) Depreciation              (34 523)        (43 154)
     15 461       24 708 Operating profit            65 941          38 597
                         Finance costs
   (26 332)     (20 529) - Net interest paid       (47 859)        (55 278)
    (5 291)      (8 938) - Forward cover           (10 341)        (12 467)
                         costs
      6 530       16 716 - Net monetary gain         11 830          14 788
          -            - Income from                    797             842
                         associates
    (9 632)       11 957 Profit/(Loss)               20 368        (13 518)
                         before taxation
      5 641        (121) Taxation                     (346)          12 042
    (3 991)       11 836 Profit/(Loss) after         20 022         (1 476)
                         taxation
      (108)        (137) Minority interest            (147)           (183)
    (4 099)       11 699 Net profit/(loss)           19 875         (1 659)
                         for the period
     (10,7)         30,6 Headline, basic and           51,9           (4,3)
                         fully diluted
                         earnings/(loss) per
                         share (cents)
     38 292       38 292 Weighted average            38 292          38 292
                         number
                         of shares in issue
                         (`000)
          -            - Dividends per share              -              22
                         (cents)
       1,30         2,15 Interest cover                2,10            1,48
CONSOLIDATED BALANCE SHEETS
  Unaudited   Unaudited                                             Audited
  30/9/2000   30/9/2001                                          31/03/2001
                         R'000
                         Assets
    405 247     413 888  Fixed assets                               411 485
      1 780       1 284  Unlisted investments                         1 784
                         and loans
    766 113     764 986  Current assets                             534 931
  1 173 140   1 180 158                                             948 200
                         Equity and
                         liabilities
    270 826     327 038  Ordinary                                   310 759
                         shareholders' equity
      1 608       1 637  Minority interest                            1 683
      4 101       4 407  Deferred taxation                            4 291
     71 643      55 616  Long-term                                   49 336
                         liabilities
    824 962     791 460  Current liabilities                        582 131
  1 173 140   1 180 158                                             948 200
    358 662     342 869  Net interest-bearing                       250 603
                         debt
       7,11        8,58  Net asset value per                           8,16
                         share (Rand)
                         Capital expenditure
     21 686      15 833  Incurred                                    57 396
     17 847      22 342  Authorised and                              11 259
                         committed
     18 416       9 773  Authorised but not                           6 058
                         contracted for
CONSOLIDATED CASH FLOW STATEMENTS
  Unaudited   Unaudited                            Unaudited        Audited
   6 months    6 months                            12 months      15 months
1/4/2000 to 1/4/2001 to                          1/4/2000 to    1/1/2000 to
  30/9/2000   30/9/2001                           31/03/2001     31/03/2001
                         R'000
     50 064      56 793  Cash generated from         165 048        145 523
                         operations
   (32 769)    (29 235)  Finance costs and          (59 940)       (73 101)
                         taxation
   (87 302)    (99 149)  (Utilised                    86 783         28 308
                         by)/Generated from
                         working capital
   (70 007)    (71 591)  (Utilised                   191 891        100 730
                         by)/Available from
                         operations
    (8 959)           -  Dividends paid              (8 959)       (17 368)
   (78 966)    (71 591)  Cash (outflow)              182 932         83 362
                         /inflow from
                         operating activities
   (23 584)    (20 674)  Cash outflow from          (47 730)       (55 040)
                         investing activities
    (1 393)     (2 027)  Cash outflow from          (27 639)       (41 543)
                         financing activities
  (103 943)    (94 292)  Net (increase)              107 563       (13 221)
                         /decrease in bank
                         overdrafts
  (251 502)   (167 637)  Net bank overdrafts       (275 200)      (154 416)
                         at beginning of
                         period
  (355 445)   (261 929)  Net bank overdrafts       (167 637)      (167 637)
                         at end of period
SEGMENTAL ANALYSIS
  Unaudited   Unaudited                            Unaudited        Audited
   6 months    6 months                            12 months      15 months
1/4/2000 to 1/4/2001 to                          1/4/2000 to    1/1/2000 to
  30/9/2000   30/9/2001                           31/03/2001     31/03/2001
                         R'000
    632 326     729 498  Revenue                   1 479 266      1 767 314
    510 023     571 598  Fertilizer                1 241 772      1 474 093
   (31 770)    (42 663)  - Less: Inter-             (90 534)      (113 698)
                         segmental sales
    154 073     200 563  Explosives and              328 028        406 919
                         Chemicals
     15 461      24 708  Operating profit             65 941         38 597
      1 325       6 981  Fertilizer                   34 885          8 197
     14 136      17 727  Explosives and               31 056         30 400
                         Chemicals
STATEMENT OF CHANGES IN ORDINARY SHAREHOLDERS' EQUITY
                              Share           Non-      Retained      Total
                            capital  distributable      earnings
                        and premium       reserves
Unaudited (R'000)
At 31 December 1999          66 388         23 938       211 018    301 344
Change in accounting
policy
- Leave pay provision             -              -       (4 318)    (4 318)
net of taxation
At 31 December 1999          66 388         23 938       206 700    297 026
restated
Net loss for the                  -              -      (21 534)   (21 534)
period 1/1/2000 to
31/3/2000
Ordinary dividends                -              -       (8 959)    (8 959)
paid
Decrease in foreign               -        (1 363)             -    (1 363)
currency translation
reserve
At 31 March 2000             66 388         22 575       176 207    265 170
Net loss for the                  -              -       (4 099)    (4 099)
period 1/4/2000 to
30/9/2000
Increase in foreign               -         10 220             -     10 220
currency translation
reserve
Treasure shares               (465)              -             -      (465)
At 30 September 2000         65 923         32 795       172 108    270 826
Net profit for the                -              -        23 974     23 974
period 1/10/2000 to
31/3/2001
Increase in foreign               -         16 369             -     16 369
currency translation
reserve
Transfer to retained              -          (268)           268          -
income of post-
acquisition
retained earnings and
reserves of associate
Treasury shares               (410)              -             -      (410)
At 31 March 2001             65 513         48 896       196 350    310 759
Net profit for the                -              -        11 699     11 699
period
Increase in foreign               -          4 580             -      4 580
currency translation
reserve
At 30 September 2001         65 513         53 476       208 049    327 038
COMMENTS
OPERATING PERFORMANCE
The turnaround in the fertilizer industry, mooted in our previous
communication, is becoming evident. Market conditions are stable, good rains
have fallen and the raw material input costs remain at acceptable levels.
This turnaround is evidenced by both the improvement of some R22 million in
profit before tax for the Group and the 1% improved margin at the operating
profit line compared to the comparable six-month period last year.
It is pleasing to note that the interest cover at the half-year mark has
improved from 1,30 times to 2,15 times.
The insurance claim for loss of profits, relating to a component failure in
September 2000 has now been formulated and the response from the assessor is
being awaited. The claim has not been recognised in the results to the end
of September 2001.
FERTILIZER
Net revenue has increased by 10% over the comparable period last year, the
result of growth in the Group's value-added speciality products coupled with
price increases. The results are in line with the seasonality of the
business although slightly better than expectations.
Production at the no 3 granulation plant is running well, delivering
excellent quality product. The Speciality Fertilizer product range has found
growing popularity both in the local as well as export markets, resulting in
increased sales volumes and contributions.
As is generally known, there has been a considerable contraction of farming
activities in Zimbabwe. Despite these difficult conditions, earnings have
improved over the previous period. The Group's operations represent less
than 10% of the Zimbabwe fertilizer market and the impact of the contraction
has not been severe on the Group. Nevertheless, the Group is applying
caution and conservatism in its approach to Zimbabwe.
The situation in Zambia continues to improve with the Group's operations
having been rationalised and a number of new contracts being gained.
EXPLOSIVES AND CHEMICALS
Demand for both surface and underground explosives products of the company
has grown over the comparable six-month period last year. Export volumes of
explosives have also increased.
In line with the volume increases referred to above, revenue has increased
by 30% over the comparable period last year. Although the margin of 8,8% is
some 1,3% higher than that achieved for the 15 months to March 2001, they
are marginally lower than the margins achieved for the six months to
September 2000. This slight reduction is due to margins in the Industrial
Chemical industry having weakened.
Work on the aluminium trihydrate plant continued and the commercial size
reactor has now produced its first batch of saleable product. However,
further work is still required to resolve some quality issues.
PROSPECTS
The optimism expressed in the annual report is reconfirmed based upon the
favourable status of several fundamentals. These are, as mentioned above,
the stabilisation of raw material input costs at lower levels while the
price of urea, which is the basic selling price determinant for fertilizers,
also stabilised at levels that augur well for a recovery in fertilizer
margins. Furthermore maize prices are almost double those that prevailed
last year and, with the excellent soil moisture following steady rainfalls,
an increase in maize plantings is anticipated.
The drop in the ammonia price of course also impacts favourably on the
margins achieved in the explosives business paving a way to a recovery in
these, which, when combined with the growth in volumes being experienced
both locally and in other parts of Africa, augurs well for this business.
The Group is on track to achieve a substantial improvement in earnings for
the full year and it is anticipated that positive cash flows, after capital
expenditure, will be generated, which will be applied to the further
reduction of debt.
DIVIDENDS
No dividends have been declared. The dividend per share shown in the audited
15 months to 31 March 2001, were declared in respect of the year ended 31
December 1999 and paid out during the 15 month period ended 31 March 2001.
NOTES
These condensed consolidated interim financial statements are prepared in
accordance with AC127 - "Interim Financial Reporting" - and schedule 4 of
the South African Companies Act. The accounting policies used in the
preparation of the interim financial statements are consistent with those
used in the annual financial statements for the period ended 31 March 2001,
except as described below.
The Group adopted AC116 - "Employee Benefits". This has resulted in a change
in accounting policy and the recognition of a provision for leave pay not
previously accounted for. The effect of the restatement of comparative
figures has been included in the statement of changes in ordinary
shareholder's equity. The comparatives have accordingly been restated.
The future minimum lease payments under non-cancellable operating leases are
R3,463 million within one year and R13,388 million between two and five
years, giving a total of R16,851 million.
Taxation is disproportionate to the profit before taxation, mainly as a
result of the different treatment of interest for tax and accounting
purposes and the preferential tax treatment of certain projects, which have
been offset by hyperinflation adjustments.
These hyperinflation adjustments, as required by the accounting standard
AC124, result from the continued devaluation in the Zambian Kwacha and the
Zimbabwean Dollar. As in the past the most significant adjustment is that
which reduced the gross profit for the period by R15,7 million which is
offset by the net monetary gain of R16,7 million as disclosed. The net
impact on the Group results of all the hyperinflation adjustments is a net
loss of R1 million.
By order of the Board
NJ Crosse                                  RB Humphris
Chairman                                   Managing Director
Johannesburg
20 November 2001                           Website: www.omnia.co.za
Registered Office: 1st Floor, Omnia House, 13 Sloane Street, Epsom Downs,
Bryanston
Transfer Secretaries: Ultra Registrars (Pty) Limited, 11 Diagonal Street,
Johannesburg 2001. PO Box 4844, Johannesburg 2000
Directors: NJ Crosse (Chairman), RB Humphris (Managing Director),
DL Eggers, MM Doyle, DJ King (alternate), NKH Fitz-Gibbon,
WT Marais (Deputy Chairman), Dr WT Marais (alternate), JG Pretorius,
PA Springett
Company Secretary: PR Janse van Rensburg



                                        
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