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Omn - Omnia Holdings Limited - Unaudited Results For The Six Months Ended 30

Release Date: 07/12/2010 07:05:05      Code(s): OMN
OMN - Omnia Holdings Limited - Unaudited results for the six months ended 30    
September 2010                                                                  
OMNIA HOLDINGS LIMITED                                                          
(Incorporated in the Republic of South Africa)                                  
Registration number 1967/003680/06                                              
JSE code OMN                                                                    
ISIN ZAE000005153                                                               
("Omnia" or "the Group")                                                        
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2010                    
OMNIA BENEFITS FROM STRATEGIC POSITIONING IN DIVERSE SECTORS                    
Major features:                                                                 
Profit after tax of R167 million (2009: Loss R99 million)                       
Improved operating profit margin                                                
Lower finance costs                                                             
Successful completion of R1 Billion Rights Offer                                
Key drivers                                                                     
Strong demand for mining commodities                                            
Stable but low commodity prices                                                 
Strong Rand                                                                     
Low activity levels SA Manufacturing Sector                                     
CONDENSED CONSOLIDATED INCOME STATEMENT                                         
for the six months ended 30 September 2010                                      
                                                                                
Rm                      Unaudited   %          Unaudited  Audited               
                      6 months              6 months   12 months                
                      30/9/2010             30/9/2009  31/3/2010                
Continuing operations                                                           
Revenue                 4 268        -         4 249      8 827                 
Cost of sales           (3 394)     (10)       (3 789)    (7 438)               
Gross profit            874         90         460        1 389                 
Other operating income  35          (10)       39         77                    
Distribution expenses   (345)       13         (305)      (674)                 
Administrative expenses (247)       4          (238)      (487)                 
Other operating         (24)                    (8)       (26)                  
expenses                                                                        
Operating profit/(loss) 293         664        (52)       279                   
Finance cost            (59)        (37)       (93)       (217)                 
Finance income          8           -          8          44                    
Share of post tax       (3)                     2         3                     
(losses)/ profits of                                                            
associates                                                                      
Profit/(loss) before    239         277        (135)      109                   
income tax                                                                      
Income tax              (72)                   36         (51)                  
(expense)/credit                                                                
Profit/(loss) for the   167         269        (99)       58                    
period                                                                          
Profit/(loss)                                                                   
attributable to:                                                                
Equity holders of the   165         267        (99)       56                    
company                                                                         
Minority interest        2                      -          2                    
                       167         269        (99)       58                     
Basic earnings per      341,4       256        (218,2)    122,0                 
share (cents)                                                                   
Fully diluted basic     340,5       256        (217,8)    121,7                 
earnings per share                                                              
(cents)                                                                         
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME                        
for the six months ended 30 September 2010                                      
                                                                                
Rm                           Unaudited     Unaudited      Audited               
                         6 months      6 months      12 months                  
30/9/2010     30/9/2009     31/3/2010                  
Profit/(loss) for the        167           (99)           58                    
period                                                                          
Other comprehensive                                                             
income,                                                                         
net of tax                                                                      
Movement in foreign          (43)          (263)          (228)                 
currency translation                                                            
reserve                                                                         
Movement in cash flow         -             -             (8)                   
hedge                                                                           
Total comprehensive         124           (362)          (178)                  
income/(loss) for the                                                           
period attributable to:                                                         
Equity holders of the        122           (362)          (180)                 
company                                                                         
Minority interest            2              -              2                    
                                                                                
                            124           (362)          (178)                  
CONDENSED CONSOLIDATED CASH FLOW STATEMENT                                      
for the six months                                                              
ended 30 September 2010                                                         
                                                                                
Rm                          Unaudited     Unaudited        Audited              
6 months    6 months       12 months                    
                        30/9/2010   30/9/2009      31/3/2010                    
Operating profit/(loss)     293           (52)             279                  
Depreciation and            73            61               142                  
amortisation                                                                    
Adjustment for non-cash     (42)          (186)            106                  
items                                                                           
(Utilised)/generated by     (1 403)       (32)             805                  
working capital                                                                 
                           (1 079)        (209)            1 332                
Interest paid               (59)          (93)             (217)                
Interest received           8             8                44                   
Taxation paid               (44)          (85)             (111)                
(Utilised)/generated by     (1 174)        (379)            1 048               
operations                                                                      
Cash outflow from           (478)         (140)            (466)                
investing activities                                                            
Cash inflow from            928           511              180                  
financing activities                                                            
Dividends paid               -            (41)             (40)                 
Net (decrease)/increase     (724)         (49)             722                  
in cash                                                                         
Net cash/(overdraft) at     508           (214)            (214)                
beginning of period                                                             
Net cash and cash           (216)         (263)            508                  
equivalents                                                                     
CONDENSED CONSOLIDATED BALANCE SHEET                                            
as at 30 September 2010                                                         

Rm                             Unaudited      Unaudited      Audited            
                           6 months     6 months     12 months                  
                           30/9/2010    30/9/2009    31/3/2010                  
Assets                                                                          
Non-current assets             2 347          1 766          1 944              
Property, plant and            1 715          1 202          1 295              
equipment                                                                       
Intangible assets              524            505            537                
Available-for-sale             18              1             19                 
financial assets                                                                
Investments in associates      86              48            84                 
Deferred income tax assets     4              10             9                  
Current assets                 3 962          3 323          3 243              
Inventories                    1 913          1 597          1 315              
Trade and other receivables    1 865          1 691          1 365              
Current income tax assets       -              4              -                 
Cash and cash equivalents      184            31             563                
                                                                                
Total assets                   6 309          5 089          5 187              
Equity                                                                          
Equity attributable to         3 075          1 745          1 973              
owners of the company                                                           
Stated capital                 1 303          317            318                
Treasury shares                (20)           (10)           (8)                
Other reserves                 18             (15)           54                 
Retained earnings              1 774          1 453          1 609              
Minority interest in equity     -             (2)            (2)                
Total equity                   3 075          1 743          1 971              
Liabilities                                                                     
Non-current liabilities        828            802            885                
Interest-bearing borrowings    752            787            804                
Deferred income tax            75             14             80                 
liabilities                                                                     
Provisions                      1              1             1                  
Current liabilities            2 406          2 544          2 331              
Trade and other payables       1 861          1 787          2 166              
Current portion of interest-    116            461            108               
bearing borrowings                                                              
Current income tax              29             -              2                 
liabilities                                                                     
Bank overdrafts                400             296           55                 
Total liabilities              3 234          3 346          3 216              
Total equity and               6 309          5 089          5 187              
liabilities                                                                     
Net interest-bearing debt      1 084          1 513          404                
Net asset value per share      46,4           37,5           42,4               
(Rand)                                                                          
Capital expenditure                                                             
Depreciation                   59             53             119                
Amortisation                   14             9              23                 
Incurred                       478            140            385                
Authorised and committed       1 052          137            9                  
Authorised but not             162            341            420                
contracted for                                                                  
OTHER RESERVES                                                                  
Unaudited     Unaudited      Audited            
                             6 months    6 months     12 months                 
                             30/9/2010   30/9/2009    31/3/2010                 
Share-based payment reserves     88            39             81                
Foreign currency translation     (65)          (57)           (22)              
reserve                                                                         
Cash flow hedge                  (8)            -             (8)               
Net discount arising on          3             3              3                 
acquisition of shares of                                                        
subsidiaries                                                                    
                                18            (15)           54                 
RECONCILIATION OF HEADLINE EARNINGS                                             

                                                                                
                                 Unaudited      Unaudited     Audited           
                              6 months     6 months    12 months                
30/9/2010    30/9/2009   31/3/2010                
Net profit/(loss) for the         165            (99)          56               
period                                                                          
Adjusted for loss on disposal      -              -             1               
of fixed assets                                                                 
Adjusted for profit on             -              -            (20)             
businesses contributed to                                                       
associate                                                                       
Headline earnings/(loss)          165            (99)          37               
HEADLINE EARNINGS                                                               
Headline earnings are 341,4 cents per share (2009: 218,2 cents loss per         
share)                                                                          
Diluted headline earnings are 340,5 cents per share (2009: 217,8 cents loss     
per share).                                                                     
SEGMENT ANALYSIS                                                                
for the six months ended 30 September 2010                                      

Rm                      Unaudited   %          Unaudited  Audited               
                      6 months              6 months   12 months                
                      30/9/2010             30/9/2009  31/3/2010                

Revenue, net of         4 268        -         4 249      8 827                 
intersegmental sales                                                            
Chemicals               1 748       (5)        1 844      3 340                 
Mining                  1 081       20         899        1 776                 
Agriculture             1 439       (4)        1 506      3 711                 
Operating profit        293         664        (52)       279                   
Chemicals               32          (46)       59         152M                  
Mining                  172         61          107       212                   
Agriculture             89          141        (218)      (85)                  
                                                                                
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY                           
for the six months ended 30 September 2010                                      
                                                                                
                                                                                
                 Ordinary shareholders` equity                                  
Stated    Treasury  Other      Retained Minority               
Rm                capital   shares    reserves   earnings interest  Total       
At 31 March 2009  201       (11)      286        1 663    (2)       2 137       
(audited)                                                                       
Total recognised                      (263)      (99)               (362)       
income and                                                                      
expense for the                                                                 
period                                                                          
Loss for the                                     (99)               (99)        
period                                                                          
Decrease in                           (263)                          (263)      
foreign currency                                                                
translation                                                                     
reserve                                                                         
Ordinary          26                             (66)               (40)        
dividends paid                                                                  
and                                                                             
capitalisation                                                                  
shares issued                                                                   
Treasury shares             1                                       1           
sold                                                                            
Share-based                           7                             7           
payment - value                                                                 
of services                                                                     
provided                                                                        
Share-based       91         -        (45)       (44)     (2)       -           
payment -                                                                       
ordinary shares                                                                 
issued                                                                          
At 30 September   318       (10)      (15)       1 454    (4)       1 743       
2009 (unaudited)                                                                
Total recognised                      27         155      2         184         
income and                                                                      
expense for the                                                                 
period                                                                          
Profit for the                                   155       2        157         
period                                                                          
Increase in                           35                            35          
foreign currency                                                                
translation                                                                     
reserve                                                                         
Cash flow hedge                       (8)                           (8)         
Treasury shares             2                                       2           
sold                                                                            
Share-based                           42                            42          
payment - value                                                                 
of services                                                                     
provided                                                                        
At 31 March 2010  318       (8)       54         1 609    (2)       1 971       
(audited)                                                                       
Total recognised                      (43)       165      2         124         
income and                                                                      
expense for the                                                                 
period                                                                          
Profit for the                                   165       2        167         
period                                                                          
Decrease in                           (43)                          (43)        
foreign currency                                                                
translation                                                                     
reserve                                                                         
985       (12)                                    973          
Ordinary shares                                                                 
issued                                                                          
Share-based                           7                             7           
payment - value                                                                 
of services                                                                     
provided                                                                        
At 30 September   1 303     (20)      18         1 774     -        3 075       
2010 (unaudited)                                                                
Directors        NJ Crosse (Chairman), FD Butler, JJ Dique, NKH Fitz-Gibbon*    
               (Finance Director), R Havenstein, HH Hickey, RB Humphris*        
               (Managing Director), Prof SS Loubser, Dr WT Marais, Mr HP        
Marais (Alternate Director to Dr WT Marais), S Mncwango, J       
               Dique                                                            
               *Executive Directors                                             
Registered       1st Floor, Omnia House, 13 Sloane Street, Epsom Downs,         
office           Bryanston, Sandton                                             
               PO Box 69888, Bryanston 2021                                     
               Telephone (011) 709 8888                                         
Transfer         Link Market Services South Africa (Pty) Ltd,                   
secretaries      11 Diagonal Street, Johannesburg 2001                          
               PO Box 4844, Johannesburg 2000                                   
Sponsor          One Capital                                                    
NOTES                                                                           
Accounting policies                                                             
The consolidated condensed financial statements for the six months ended 30     
September 2010 were prepared in accordance with International Financial         
Reporting Standards (IFRS), IAS 34 - Interim Financial Reporting, AC 500        
Standards as issued by the Accounting Practices Board and in compliance with    
the Listing Requirements of the JSE Limited. The consolidated condensed         
interim financial statements do not include all of the information required     
by IFRS for full annual financial statements.                                   
The principal policies used in the preparation of the results for the six       
months ended 30 September 2010 are consistent with those applied in the         
annual financial statements for the year ended 31 March 2010.                   
Commitments                                                                     
The future minimum lease payments under non-cancellable operating leases are    
R15 million (2009: R4 million) within one year and R50 million (2009: R1        
million) between two and five years and R0 million (2009: R0 million) beyond    
five years, giving a total of R65 million (2009: R5 million).                   
ADDITIONAL INFORMATION                                                          
                                                                                
                                                                                
                                   Unaudited  Unaudited   Audited               
6 months   6 months    12 months              
                                  30/9/2010  30/9/2009   31/3/2010              
Final dividend paid per share        -         150*        150*                 
(cents) in respect of prior year                                                
Interim dividend declared per share  -          -           -                   
(cents) in respect of current year                                              
Weighted average number of shares   48 336     45 094      45 904               
in issue (`000)                                                                 
Weighted average number of fully    48 456     45 176      46 027               
diluted shares in issue (`000)                                                  
Number of shares in issue (`000)    66 278     46 430      46 491               
* Includes a capitalisation award of 150 cents as a final dividend              
for the year. Shareholders could elect to receive a cash dividend               
of 145 cents instead of the capitalisation award.                               
COMMENTARY                                                                      
INTRODUCTION                                                                    
Omnia is a diversified, specialist chemical services provider with business     
interests balanced across chemical, mining and agricultural markets. The        
Group`s model, which leverages its intellectual capital and technology,         
differentiates it from commodity chemical companies.                            
The Group`s three business divisions (chemical, mining and agriculture)         
continue to provide value add customised solutions built on a continually       
expanding knowledge base. Omnia`s business model places it at the forefront     
of the chemical services industry and involves uniquely matching customer       
needs to product innovation and application expertise to add extraordinary      
value to its customer`s businesses.                                             
MARKET CONDITIONS                                                               
Overall market conditions were more stable than in 2009. Commodity prices in    
general were marginally higher, albeit off low levels but the benefit           
thereof was negated by the strong Rand such that Rand margins came under        
pressure.                                                                       
Significant different demand conditions existed in the markets of the three     
divisions. Mining experienced buoyant conditions due to increased               
international demand for coal, iron ore, copper and platinum. Chemicals         
experienced tough trading conditions as low levels of activity persisted in     
the South Africa manufacturing sector and selling prices came under pressure    
due to the strong rand and relatively subdued commodity prices. Agriculture     
conditions were mixed in that there was a poor winter wheat season, a bumper    
maize harvest and lower domestic maize prices prevailed. The strong Rand and    
subdued international fertilizer prices led to a small reduction in local       
fertilizer prices.                                                              
FINANCIAL REVIEW                                                                
Revenue at R4 268 million was the same as the previous year and reflected       
the effect of marginally lower sales prices offset by marginally higher         
overall volumes.                                                                
Operating profit improved to R293 million (2009: R52 million loss).             
Adjusting for the 2009 R350 million downward valuation of inventory,            
operating profit was in line with the previous year.                            
Finance cost reduced by 37% due mainly to lower average working capital in      
2010 compared to 2009 and further aided by lower interest rates.                
Net working capital of R1?917 million (2009: R1?501 million) is in line with    
the traditional peak seasonal requirements of the Agriculture division. The     
Group`s net working capital requirements reach a peak in September/October      
each year, and so does net interest bearing debt. The R1 billion equity         
raising programme was completed on 14 September 2010 on which date the funds    
were received. R467 million of the R1 billion has been utilised to fund         
capital expenditure on the new Nitric Acid Complex and expenses associated      
with the equity raising programme, and the balance of R533 million has been     
applied to repay short term bank facilities resulting in net interest           
bearing debt at R1 084 million being lower than the R1 513 million recorded     
in 2009.                                                                        
DIVISIONAL REVIEW                                                               
Chemicals                                                                       
Protea Chemicals is a well established distributor and manufacturer of          
speciality, functional and effect chemicals and polymers in southern and        
eastern Africa. It was recently rated the 13th largest chemical distribution    
company in a worldwide survey by the respected industry journal, ICIS           
Chemical Business.                                                              
The tough trading conditions experienced saw revenue decline by 5% to R1?748    
million (2009: R1 844 million) as selling prices reduced on the back of the     
strong rand and volumes were flat year on year. Operating profit declined       
46% to R32 million (2009: R59 million). Given the largely fixed nature of       
overheads, an improvement in the gross margin percentage and a strong focus     
on cost control were insufficient to compensate for the effect of the           
reduced revenue but assisted in limiting the decline in operating profit.       
Mining                                                                          
The Mining division offers a broad range of services to the mining industry     
through BME and Protea Mining Chemicals. BME is a market leader in              
manufacture and supply of blended bulk explosives for surface mines and also    
manufactures and supplies packaged explosives for underground mines and         
shock tube and electronic delay detonators initiation systems. BME operates     
throughout Africa. Protea Mining Chemicals operates in southern Africa and      
offers value added services to complement its wide range of chemical            
products.                                                                       
Revenue increased by 20% to R1 081 million (2009: R899 million) on the back     
of strong volume growth in surface and underground mining. Operating profit     
improved 61% to R172 million (2009: R107 million) even with the strong rand     
negatively impacting the translation of improved earnings from foreign          
operations.                                                                     
The new shock tube initiation system manufacturing facility is functioning      
well and throughput increases month by month. The results of the most recent    
trials of the latest generation Electronic Delay Detonator system are very      
promising and commercialisation will commence in the near future.               
Protea Mining Chemicals achieved volume increases but operating profit was      
marginally below that of 2009. Anticipated growth continues to be affected      
by delays in a number of customer`s expansion projects.                         
Agriculture                                                                     
The Agriculture division produces and supplies granular, liquid and             
speciality fertilizers to farmers, co-operatives and wholesalers throughout     
southern and eastern Africa, Australasia and Brazil.                            
Revenue reduced by 4% to R1 439 million (2009: R1 506 million) on the back      
of a small reduction in selling prices due to the strong rand whilst volumes    
were at similar levels to the previous year. Operating profit of R89 million    
was substantially ahead of the 2009 R218 million operating loss as the 2009     
results included a downward valuation in inventory amounting to R350            
million. Adjusting for this R350 million, operating profit was R43 million      
below 2009 levels due to the impact on margins of the reduction in sales        
prices and the additional input cost attributable to the purchase of more       
expensive nitrogen materials, as internal nitric acid production capacity       
was increasingly utilised to supply BME`s volume growth.                        
Construction of the new Nitric Acid Complex is proceeding according to plan.    
The Phosphate plant at Phokeng has been placed on care and maintenance.         
Omnia`s defence against the Competition Commission`s charges is progressing.    
The seven year investigation into the alleged collusion within the              
fertilizer industry continues.                                                  
PROSPECTS                                                                       
Overall domestic commodity prices have stabilised, albeit at lower levels,      
but the strong rand will negatively impact operating profit. The Group          
expects to benefit from substantially lower finance costs.                      
The Chemical division is not expecting any material improvement in volumes      
and prices and is therefore focusing on aggressive cost reductions and          
efficiency improvements to improve operating profit.                            
The Mining division expects the favourable conditions of the first half to      
continue in the second half reflecting strong demand for its products.          
The Agricultural division performance will be influenced by fertilizer sales    
volumes in the summer planting season. International fertilizer prices have     
increased significantly as demand improves following the upward move in         
agriculture produce prices. Some turbulence in the market is being              
experienced because of the withdrawal by Yara from South Africa and the         
Competition Commission ruling that requires Sasol to withdraw from the          
fertilizer retail market, the effects of which are difficult to predict.        
Overall, the Group expects effects to revert to the normal pattern of higher    
second half earnings. This information has not been reviewed and reported on    
by Omnia`s auditors.                                                            
CHANGES TO THE BOARD                                                            
Mr HP (Helgaard) Marais was appointed as a non-executive director in his        
capacity as an alternate director to Dr WT Marais with effect from 3            
December 2010.                                                                  
Ms D Radley and Mr TR Scott resigned as independent non-executive directors     
of the Company with effect from 3 December 2010.                                
DIVIDENDS                                                                       
Shareholders were advised in the 2010 annual report that a dividend was not     
likely to be declared this year in the light of the equity that was raised      
to fund the Nitric Acid Complex. The board has confirmed this approach and      
no dividend has been proposed.                                                  
NJ CROSSE                RB HUMPHRIS              NKH FITZ-GIBBON               
Chairman                 Managing Director        Finance Director              
                                                                                
www.omnia.co.za                                                                 
Bryanston                                                                       
7 December 2010                                                                 
Sponsor                                                                         
One Capital                                                                     
Date: 07/12/2010 07:05:03 Supplied by www.sharenet.co.za                     
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