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OMNIA HOLDINGS LIMITED - Unaudited Results For The Six Months Ended 30 September 2013

Release Date: 26/11/2013 07:05:00      Code(s): OMN     
(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 2013 

- Revenue up 25.7% to R7.5 billion
- Profit for the period up 16.8% to R424 million
- Operating margin down from 9.1% to 8.4%
- Earnings per share up 16.7% to 637.0 cents per share
- Debt:equity ratio improves from 42.5% to 35.7%
- Dividend up 23.3% to 185 cents per share

  Condensed consolidated income statement                                                                                  
  for the six months ended 30 September 2013                                                                                                                                                    
                                                                                          Restated*      Restated*      
                                                                 Unaudited                Unaudited        Audited   
                                                                  6 months                 6 months      12 months   
  Rm                                                            30/09/2013          %    30/09/2012     31/03/2013   
  Revenue                                                            7 499         26         5 967         13 432   
  Cost of sales                                                     (5 912)        27        (4 659)       (10 360)   
  Gross profit                                                       1 587         21         1 308          3 072   
  Other operating income                                                43        (39)           70             67   
  Administrative expenses                                             (336)        20          (280)          (744)   
  Distribution expenses                                               (640)        20          (535)        (1 137)   
  Other operating expenses                                             (26)        44           (18)           (27)   
  Operating profit                                                     628         15           545          1 231   
  Finance cost                                                         (70)        67           (42)          (117)   
  Finance income                                                        14         56             9             35   
  Share of profits/(losses) of associates and joint ventures             2                       (1)            (1)   
  Profit before taxation                                               574         12           511          1 148   
  Income tax expense                                                  (150)                    (148)          (268)   
  Profit for the period                                                424         17           363            880   
  Attributable to:                                                                                                   
  Owners of Omnia Holdings Limited                                     425         17           363            883   
  Non-controlling interest                                              (1)                       -             (3)   
                                                                       424         17           363            880   
  Earnings per share from profit attributable to owners                                                              
  of Omnia Holdings Limited during the period                                                                        
  Basic earnings per share (cents)                                   637.0         17         546.3        1 332.1   
  Diluted earnings per share (cents)                                 594.2         13         527.0        1 250.4   
  * 2013 earnings have been restated for the change in accounting policy relating to the adoption of IFRS 11. The 
  accounting treatment for our joint venture, Acol, changed from proportionate consolidation to equity accounting. 
  This restatement has not been audited and does not have a material impact on the Group.                                                               

  Condensed consolidated statement of comprehensive income                                                      
  for the six months ended 30 September 2013                                                                                                                                             
                                                     Unaudited         Unaudited        Audited   
                                                      6 months          6 months      12 months   
  Rm                                                30/09/2013        30/09/2012     31/03/2013   
  Profit for the period                                    424               363            880   
  Other comprehensive income, net of tax                                                          
  Currency translation difference                          158               103            248   
  Total comprehensive income for the period                582               466          1 128   
  Attributable to:                                                                                
  Owners of Omnia Holdings Limited                         583               466          1 131   
  Non-controlling interest                                  (1)                -             (3)   
                                                           582               466          1 128   

  Condensed consolidated cash flow statement                                                      
  for the six months ended 30 September 2013                                                                                                                                                
                                                                       Restated*      Restated*      
                                                     Unaudited         Unaudited        Audited   
                                                      6 months          6 months      12 months   
  Rm                                                30/09/2013        30/09/2012     31/03/2013   
  Operating profit                                         628               545          1 231   
  Depreciation and amortisation                            153               125            272   
  Adjustment for non-cash items                             39                (4)            33   
  Cash generated from operations                           820               666          1 536   
  Utilised by working capital                           (1 432)           (1 247)          (172)   
  Interest paid                                            (70)              (42)          (117)   
  Interest received                                         14                 9             35   
  Taxation paid                                           (152)              (51)          (207)   
  Net cash outflow from operating activities              (820)             (665)         1 075   
  Cash outflow from investing activities                  (352)             (309)          (653)   
  Cash outflow from financing activities                  (187)             (180)          (315)   
  Net (decrease)/increase in cash                       (1 359)           (1 154)           107   
  Net cash at beginning of the period                     (321)             (428)          (428)   
  Effects of exchange rate movements                         2                 -              -   
  Net cash and cash equivalents                         (1 678)           (1 582)          (321)   

  Condensed consolidated statement of changes in equity                                                                                    
  for the six months ended 30 September 2013                                                                                                                                         
                                                               Attributable to the owners of                                                                         
                                                                   Omnia Holdings Limited                                                                                                       
                                                         Stated    Treasury       Other    Retained   controlling                      
  Rm                                                    capital      shares    reserves    earnings      interest        Total       
  At 31 March 2012 (audited)                              1 289         (15)        133       2 620             1        4 028       
  Recognised income and expense for the period                                                                                       
  Profit for the period                                                                         363             -          363       
  Currency translation difference                                                   103                                    103       
  Transactions with shareholders                                                                                                     
  Ordinary dividends paid                                                                      (121)                      (121)       
  Treasury shares sold                                                    3                                                  3       
  Share-based payment - value of service provided                                     5                                      5       
  At 30 September 2012 (unaudited)                        1 289         (12)        241       2 862             1        4 381       
  Total recognised income and expense for the period                                                                                 
  Profit for the period                                                                         520            (3)         517       
  Currency translation difference                                                   145                                    145       
  Transactions with shareholders                                                                                                     
  Ordinary dividends paid                                                                       (99)                       (99)       
  Treasury shares sold                                                    5                                                  5       
  Share-based payment - value of services provided                                    3                                      3       
  Share appreciation rights exercised                                    (2)                      2                          -       
  At 31 March 2013 (audited)                              1 289          (9)        389       3 285            (2)       4 952       
  Total recognised income and expense for the period                                                                                 
  Profit for the period                                                                         425            (1)         424       
  Currency translation difference                                                   158                                    158       
  Transactions with shareholders                                                                                                     
  Ordinary dividends paid                                                                      (182)                      (182)       
  Treasury shares sold                                                    2                                                  2       
  Share-based payment - value of services provided                                    5                                      5       
  At 30 September 2013 (unaudited)                        1 289          (7)        552       3 528            (3)       5 359       

  Segmental analysis                                                                                
  for the six months ended 30 September 2013                                                                                                                                                    
                                                                              Restated*      Restated*     
                                                     Unaudited                Unaudited        Audited   
                                                      6 months                 6 months      12 months   
  Rm                                                30/09/2013        %      30/09/2012     31/03/2013   
  Revenue, net of intersegmental sales                   7 499       26           5 967         13 432   
  Mining                                                 2 750       37           2 007          4 379   
  Agriculture                                            2 701       24           2 181          5 399   
  Chemicals                                              2 048       15           1 779          3 654   
  Operating profit                                         628       15             545          1 231   
  Mining                                                   453       35             335            735   
  Agriculture                                              122      (35)            187            443   
  Chemicals                                                 53      130              23             53   

  Other reserves                                                                                               
  as at 30 September 2013                                                                                                                                                                       
                                                     Unaudited         Unaudited        Audited   
                                                      6 months          6 months      12 months   
  Rm                                                30/09/2013        30/09/2012     31/03/2013   
  Share-based payment reserve                              118               110            113   
  Foreign currency translation reserve                     431               128            273   
  Net discount arising on acquisition of                                           
  shares of subsidiaries                                     3                 3              3   
                                                           552               241            389   

  Reconciliation of headline earnings                                                                 
  for the six months ended 30 September 2013                                                                                                                                      
                                                     Unaudited         Unaudited        Audited   
                                                      6 months          6 months      12 months   
  Rm                                                30/09/2013        30/09/2012     31/03/2013   
  Net profit for the period                                425               363            883   
  Adjusted for profit on disposal                                                  
  of fixed assets                                           (2)                -             (1)   
  Headline earnings                                        423               363            882   
  Headline earnings per share                                                                     
  Headline earnings per share (cents)                    635.5             546.3        1 130.6   
  Diluted headline earnings per share (cents)            592.8             527.0        1 249.0                                            

  Condensed consolidated balance sheet                                                                                           
  as at 30 September 2013                                                                                                                                                            
                                                                       Restated*      Restated*      
                                                     Unaudited         Unaudited        Audited   
                                                      6 months          6 months      12 months   
  Rm                                                30/09/2013        30/09/2012     31/03/2013   
  Non-current assets                                     3 928             3 485          3 714   
  Property, plant and equipment                          3 314             2 896          3 098   
  Intangible assets                                        512               517            516   
  Available-for-sale financial assets                       23                19             21   
  Investments in associates and joint ventures              77                52             76   
  Deferred income tax assets                                 2                 1              3   
  Current assets                                         7 005             5 872          5 306   
  Inventories                                            3 835             3 026          2 892   
  Trade and other receivables                            2 992             2 740          2 144   
  Cash and cash equivalents                                178               106            270                                                                                        
  Total assets                                          10 933             9 357          9 020   
  EQUITY AND LIABILITIES                                                                          
  Capital and reserves attributable to the 
  owners of Omnia Holdings Limited                       5 362             4 380          4 954   
  Stated capital                                         1 289             1 289          1 289   
  Treasury shares                                           (7)              (12)            (9)   
  Other reserves                                           552               241            389   
  Retained earnings                                      3 528             2 862          3 285   
  Non-controlling interest in equity                        (3)                1             (2)   
  Total equity                                           5 359             4 381          4 952   
  Non-current liabilities                                  479               433            406   
  Deferred income tax liabilities                          294               250            293   
  Debt                                                     185               183            113   
  Current liabilities                                    5 095             4 543          3 662   
  Trade and other payables                               3 134             2 630          2 883   
  Debt                                                      51                98            130   
  Current income tax liabilities                            54               127             58   
  Bank overdrafts                                        1 856             1 688            591                                                                                       
  Total liabilities                                      5 574             4 976          4 068   
  Total equity and liabilities                          10 933             9 357          9 020   
  Net debt                                               1 914             1 863            564   
  Net asset value per share (rand)                        80.5              65.8           74.4   
  Capital expenditure                                                                             
  Depreciation                                             135               110            242   
  Amortisation                                              18                15             30   
  Incurred                                                 355               309            646   
  Authorised and committed                                 274               182             53   
  Authorised but not contracted for                        288               183            234 
Basis of preparation
This interim report has been prepared in accordance with the framework concepts and the measurement and recognition
requirements of International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council,
presentation and disclosures as required by IAS 34 Interim Financial Reporting, the JSE Listings Requirements and the
requirements of the Companies Act of South Africa.  The preparation of this interim report was supervised by the Group Finance
Director, NKH Fitz-Gibbon CA(SA).

The financial statements have been prepared using accounting policies that comply with IFRS and which are consistent
with those applied in the preparation of the financial statements for the year ended 31 March 2013, with the exception of
the adoption of IFRS 11 Joint Arrangements, which  has resulted in changes in accounting policies effective for the
year commencing 1 April 2013 and has been applied retrospectively in line with the transitional requirements.
There has been no consequential impact or change to total comprehensive income, or shareholders? funds of the Group in
respect of these interim results.

The interim results have not been audited.

  Additional information                                                                                         
  for the six months ended 30 September 2013                                                                                                                                          
                                                                     Unaudited         Unaudited       Audited   
                                                                      6 months          6 months     12 months   
                                                                    30/09/2013        30/09/2012    31/03/2013   
  Weighted average number of shares in issue (?000)                     66 559            66 448        66 288   
  Weighted average number of diluted shares in issue (?000)             71 359            68 885        70 615   
  Number of shares in issue excluding treasury shares (?000)            66 588            66 480        66 543


Omnia is a diversified provider of specialised chemical products and services used in the mining, agricultural and
chemical sectors. The Group differentiates itself from commodity chemical providers by adding value at every stage of the
supply and service chain through technological innovation and by deploying our intellectual capital. The business model
is made sustainable by targeted backward integration through installing technologically-advanced plants to manufacture
core materials such as nitric acid and explosives emulsions. Besides securing sources of supply, this enables us to
improve operational efficiencies throughout the product development and production chain. 
Omnia provides customised, knowledge-based solutions through our Mining, Agricultural and Chemicals divisions. The
Group?s proven business model makes us a market leader in chemical services. The Group prospers through offering
extraordinary value to our customers by tailoring our solutions to their business needs through product and service innovation 
and expert application of these.

Omnia celebrates its 60th birthday and has built an excellent understanding of not only its core markets here in South
Africa but also in the fundamental industries of mining and agriculture in Africa. 

Macro environment
The macro environment for this period was positive for our Mining division, and mixed for our Agriculture and
Chemicals division. Global economic performance was varied, with moderate growth in emerging economies and a steady recovery in
the USA economy being offset by subdued conditions in the Eurozone economies. The net impact was continued good demand
for mining commodities, lower international mining commodity prices, stable international agricultural commodity prices
and fairly flat international prices for chemical products. A significant decrease was seen in the international ammonia
and urea prices and the unfavourable urea to ammonia ratio continued although at a slightly improved ratio compared to
the prior year. The rand was weaker against the US dollar which positively impacted all our divisions? selling prices.
Economic activity levels in the South African manufacturing sector remained muted which hindered our Chemicals division,
as its primary customer base is drawn from the South African manufacturing sector.
Financial review
Group revenue rose 25.7% to R7 499 million (2012: R5 967 million) on the back of strong volume growth in the Mining
division and good sales price increases in all divisions. 
Gross profit increased 21.3% to R1 587 million (2012: R1 308 million) and the gross profit percentage was slightly
lower at 21.2% of revenue (2012: 21.9%) due to lower gross margins in the Mining and Agriculture divisions, Chemicals
division?s margins being on par with the previous year.  

Other operating income of R43 million (2012: R70 million) included an insurance claim receipt of R9 million 
(2012: R21 million).

Administration overheads increased by 20.0% to R336 million (2012: R280 million). Included in administration expenses
are share-based payment and long-term incentive scheme charges of R49 million (2012: R10 million). Taking these into
account, administration costs were well controlled. Distribution overheads increased by 19.6% to R640 million (2012: R535
million), primarily due to higher volumes in the Mining and Agriculture divisions. Other operating expenses comprise
foreign exchange loss of R8 million (2012: R3 million) and amortisation of intangible assets of R18 million
(2012: R15 million).

Operating profit increased 15.2% to R628 million (2012: R545 million), on the back of the improved operating profit of
our Mining and Chemicals divisions, offset by a reduction in the operating profit of the Agriculture division. The
operating margin reduced from 9.1% to 8.4%. The Mining division maintained its operating margin at 16.5% (2012: 16.7%). The
Agriculture division?s operating margin reduced to 4.5% (2012: 8.6%) due to reduced gross margins caused by the
unfavourable urea to ammonia ratio and under recovery of production plant overheads. The Chemicals division?s operating margin
improved to 2.6% (2012: 1.3%) due to higher rand margins on the back of higher rand sales prices whilst overhead costs
were contained at the prior year level. 
Net finance expense increased from R33 million to R56 million due to much higher monthly levels of net working capital
compared to the prior period which was caused by rand weakness. Finance expense was also impacted by the higher cost of
financing the Zambia operations in kwacha borrowings following the Zambia Government directive that all local trading
had to be in kwachas and that local trading in US dollars was no longer permitted. 
Income tax expense increased to R150 million (2012: R148 million), incurring an effective tax rate of 26.1% 
(2012: 29.0%).
Profit for the period increased by 16.8% from R363 million to R424 million.

Total assets increased by 16.8% from R9 357 million to R10 933 million due to higher levels of inventories,
receivables and capital expenditure. 

Property, plant and equipment increased by R418 million to R3 314 million mainly as a result of capital expenditure
spend of R632 million on various projects, of which R291 million was spent in the second half of FY2013 and R341 million
in the current period. The major items of capital expenditure in the current period were on the expansion at BME
production sites and customer sites, the new chlorine packing plant and additional ammonia rail tankers.
Inventory increased by R809 million from R3 026 million to R3 835 million, primarily due to an increase of R626
million in the Agriculture division?s inventory as a result of higher physical stock levels and raised unit costs caused by
rand weakness. Trade and other receivables remain well controlled increasing only 9.2% from R2 740 million to R2 992
million, well below the 25.7% rise in revenue. 

Equity increased by 22.3% from R4 381 million to R5 359 million as a result of retained earnings of R945 million, an
increase of R303 million in foreign currency translation reserve, offset by R281 million dividend payments. 

Cash utilised by operating activities of R820 million was in line with the R665 million utilised by operations in the
prior year taking into account the increase in revenue. Cash outflow from investing activities of R352 million (2012:
R309 million) is due primarily to capital expenditure as described above. After taking into account the cash outflow from
finance activities of R187 million (2012: R180 million), which included a dividend payment of R182 million (2012: R121
million), there was a net cash outflow of R1 359 million (2012: R1 154 million).

The period ended with net debt of R1 914 million (2012: R1 863 million) and an improved net debt:equity ratio of 35.7%
(2012: 42.5%).

Divisional review
The Mining division services the mining industry through BME and Protea Mining Chemicals.

BME operates throughout Africa with a strong presence in southern and west Africa. BME is a market leader in bulk
emulsion and blended bulk explosives formulations for the opencast mining industry; produces electronic delay detonators and
shocktube initiating systems; has its own range of boosters, and manufactures packaged explosives for underground
mining and specialised surface blasting operations. BME adds value to its products through its world class blasting
consultancy service, through which industry experts and experienced mining engineers advise and support customer operations,
particularly in using its unique and proprietary AxxiSoft? and BlastMap? software solutions.

In southern Africa, Protea Mining Chemicals offers value-added services to complement a wide range of chemical
products. These include Protea Process?, a comprehensive service that covers the handling, logistics and on site formulation of

Revenue increased 37.0% to R2 750 million (2012: R2 007 million) on the back of strong volume growth especially
outside of South Africa and higher sales prices on the back of the weaker rand. Revenue was negatively impacted by strikes at
BME?s mining customers and at its Losberg site. Gross margins reduced due to price reductions passed to Protea Mining
Chemicals? customers but with well controlled overhead costs, operating profit increased 35.2% to R453 million (2012: R335
million) and the operating margin at 16.5% was in line with the 16.7% for the prior period.

The Agriculture division comprises Omnia Fertilizer and Omnia Specialities and is the market leader in southern Africa
in its field. This division produces granular, liquid and speciality fertilizers for a broad customer base of farmers,
co-operatives and wholesalers throughout southern and east Africa, Australasia and Brazil. 

The Agriculture division?s range of specialised products and services are coordinated through its pioneering
Nutriology? offering, which incorporates leading edge research and development of new products and services to assist customers
to optimise crop yield and quality for maximised returns. The Omnia Nutriology? brand is highly regarded in the regional
market and its core concept of value-added service is being increasingly recognised. 

Revenue increased 23.8% to R2 701 million (2012: R2 181 million) on the back of higher volumes and higher fertilizer
sales prices. The increase in volume was entirely due to the lower margin new wholesale business that was started at the
beginning of 2013 and this business contributed R276 million of the R520 million increase in revenue. Volumes in the
traditional Agriculture division were a little behind that of the prior period. Operating profit reduced by 34.8% to R122
million (2012: R187 million), due to lower gross margins caused by the unfavourable urea to ammonia ratio, a R38 million
under recovery of production plant overheads and the effect of the volumes of the lower margin new wholesale business.
The under recovery of production plant overheads was caused by unexpected start-up problems experienced in the Sasolburg
granulation plants following the annual maintenance shut down in April 2013. These plants are now running well and a
part recovery of the R38 million is expected in the second half. Overhead costs included were well controlled and in line
with the increase in revenue.

Protea Chemicals, active throughout southern and eastern Africa, is a well-established manufacturer and distributor of
specialty, functional and effect chemicals and polymers, with a major presence in every sector of the broader chemical
distribution market. It represents a large number of domestic and international principals, counting among its suppliers
many of the world?s leading chemical producers. 

Revenue increased by 15.1% to R2 048 million (2012: R1 779 million) on the back of increased selling prices as a
result of the weaker rand, whilst volumes were on a par with the prior period. The gross margin percentage was at the same
level as the prior period and with overheads being well controlled and on par with the previous year, the operating profit
increased by 130.4% to R53 million (2012: R23 million). The operating margin at 2.6% was double the 1.3% of the prior

The macro environment for the second half is positive but will be strongly influenced by the summer planting season.  
Our Mining division anticipates a small increase over first half volumes in the second half and the continued benefit
of the weaker rand. Our Agriculture division anticipates favourable planting conditions in most of the region as
agriculture produce prices are expected to remain at high levels. Margins will continue to be negatively affected by the
unfavourable urea to ammonia ratio. Ammonia is the key feedstock used to produce nitrogen fertilizer, whereas the sales price
of nitrogen fertilizer is determined by the urea price. When this ratio deviates unfavourably from its long-term
historical relationship, gross margins are squeezed. Our Chemicals division is expecting to continue the improved first half
performance in the second half but is not likely to achieve the operating margin target of 4.5% to 5.5%.
The Board has declared an interim gross cash dividend of 185 cents per ordinary share (2012: 150 cents per ordinary
share) payable out of income in respect of the period ended 30 September 2013. The number of ordinary shares in issue at
the date of this declaration is 67 249 825. As the company does not have any STC credits to utilise, the gross dividend
is subject to local dividends tax of 15% for those shareholders to which local dividends tax is applicable. The resultant
net dividend amount is 157.25 cents per share for those shareholders subject to local dividends tax and 185 cents per
share for those shareholders not subject to local dividends tax. The company?s tax reference number is 9400087715.
The salient dates for the interim dividend are as follows:
Last day to trade cum dividend             Friday, 10 January 2014
Shares trade ex-dividend                   Monday, 13 January 2014
Record date                                Friday, 17 January 2014
Payment date                               Monday, 20 January 2014 

Share certificates may not be dematerialised or materialised between Monday, 13 January 2014 and Friday, 17 January 2014, 
both dates inclusive. 
NJ Crosse               RB Humphris                        NKH Fitz-Gibbon
Chairman                Group Managing Director            Group Finance Director
26 November 2013

RC Bowen (British), FD Butler, NJ Crosse (Chairman), NKH Fitz-Gibbon* (Finance Director), R Havenstein, HH Hickey, 
RB Humphris* (Managing Director), Prof SS Loubser, Dr WT Marais, HP Marais (alternate), SW Mncwango, D Naidoo, 
KP Shongwe
*Executive Directors

Registered office: 2nd Floor, Omnia House, 13 Sloane Street, Epsom Downs, Bryanston, Sandton
PO Box 69888, Bryanston 2021  Telephone: (011) 709 8888

Transfer secretaries: Link Market Services South Africa (Pty) Ltd
13th Floor, Rennie House, 19 Ameshoff Street, Braamfontein

Sponsor: One Capital Advisory (Pty) Ltd, 17 Fricker Road, Illovo 2196 


Date: 26/11/2013 07:05:00 Supplied by www.sharenet.co.za                     
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