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Omnia Holdings Limited - Audited Results For The Year Ended 31 March 2014

Release Date: 24/06/2014 07:05:00      Code(s): OMN     
OMNIA HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1967/003680/06
JSE code OMN
ISIN ZAE000005153 
(?Omnia? or ?the Group?)
Audited results for the year ended 31 March 2014


Highlights
- Revenue at all-time record of R16,3 billion
- EBITDA up 21% to R1,9 billion
- Operating profit up 15,0% to R1 416 million after abnormally high LTIP expenses
- Operating profit up 22,3% to R1 495 million adjusting for abnormal portion of LTIP expense     
- Operating margin down to 8,7% from prior year?s 9,2%  
- Operating margin is 9,2% adjusting for abnormal portion of LTIP expense
- Profit for year up 12,7% at all-time record of R992 million  
- Profit for year up 20,2% to R1 049 million adjusting for abnormal portion of LTIP expense
- Basic earnings per share up 12,3% to R14,96 per share
- Debt:equity ratio of 5,7%


Condensed consolidated income statement                                                                             
for the year ended 31 March 2014                                                                                                                                                                          
                                                                                                         Restated*    
                                                                                    Audited               Audited      
Rm                                                                                     2014        %         2013                                                                                                                         
Revenue                                                                              16 259       21       13 432   
Cost of sales                                                                       (12 647)      22      (10 360)  
Gross profit                                                                          3 612       18        3 072   
Other operating income                                                                  115       72           67   
Administrative expenses                                                                (908)      22         (744)  
Distribution expenses                                                                (1 324)      16       (1 137)  
Other operating expenses                                                               ( 79)     193         ( 27)  
Operating profit                                                                      1 416       15        1 231   
Finance expenses                                                                       (143)      22         (117)  
Finance income                                                                           56       60           35   
Share of loss of investments accounted for using the equity method                        -                    (1)  
Profit before taxation                                                                1 329       16        1 148   
Income tax expense                                                                     (337)      26         (268)  
Profit for the year                                                                     992       13          880   
Attributable to:                                                                                                    
Owners of Omnia Holdings Limited                                                        996       13          883   
Non-controlling interest                                                                 (4)                   (3)  
                                                                                        992       13          880   
Earnings per share from profit attributable to owners of Omnia Holdings Limited                                     
Basic earnings per share (cents)                                                      1 496       12        1 332   
Diluted earnings per share (cents)                                                    1 344        8        1 250                                                                                                                      
* 2013 earnings have been restated for change in accounting policy relating to the adoption of IFRS 11. The 
accounting treatment for our joint venture, Acol Chemicals (Pvt) Limited, changed from proportionate consolidation 
to equity accounting. This restatement does not have a material impact on the Group.                                     


Condensed consolidated statement of comprehensive income                             
for the year ended 31 March 2014                                                                                                                                         
                                                            Audited        Audited   
Rm                                                             2014           2013                                                                                        
Profit for the year                                             992            880   
Other comprehensive income, net of tax                                               
Currency translation differences                                255            248   
Total comprehensive income for the year attributable to:      1 247          1 128   
Owners of Omnia Holdings Limited                              1 251          1 131   
Non-controlling interest                                         (4)           ( 3)  
                                                              1 247          1 128   
                                                                                     

Condensed consolidated cash flow statement                                         
for the year ended 31 March 2014                                                                                                                                      
                                                                          Restated*    
                                                            Audited        Audited      
Rm                                                             2014           2013                                                                                               
Operating profit                                              1 416          1 231   
Depreciation and amortisation                                   295            272   
Adjustment for non-cash items                                    58             33   
Cash generated from operations                                1 769          1 536   
Utilised by working capital                                     (52)          (172)  
Interest paid                                                  (169)          (117)  
Interest received                                                56             35   
Taxation paid                                                  (289)          (207)  
Net cash inflow from operating activities                     1 315          1 075   
Cash outflow from investing activities                         (791)          (653)  
Cash outflow from financing activities                         (337)          (315)  
Net increase in cash and cash equivalents                       187            107   
Net cash and cash equivalents at beginning of year             (321)          (428)  
Exchange rate movements on cash and cash equivalents              3              -   
Net cash and cash equivalents at end of year                   (131)          (321)  

                                                                                   
Condensed consolidated balance sheet                                                                          
as at 31 March 2014                                                                                                                                                                                                        
                                                                                 Restated*    
                                                            Audited               Audited      
Rm                                                             2014        %         2013                                                                                                                       
ASSETS                                                                                      
Non-current assets                                            4 270       15        3 714   
Property, plant and equipment                                 3 672       19        3 098   
Intangible assets                                               537        4          516   
Available-for-sale financial assets                              34       62           21   
Investment accounted for using the equity method                 17      (78)          76   
Deferred income tax assets                                       10      233            3   
Current assets                                                6 302       19        5 306   
Inventories                                                   3 213       11        2 892   
Trade and other receivables                                   2 751       28        2 144   
Cash and cash equivalents                                       338       25          270                                                                                               
Total assets                                                 10 572       17        9 020   
Equity                                                                                      
Capital and reserves attributable to the owners of        
Omnia Holdings Limited                                        5 918       20        4 954   
Stated capital                                                1 289                 1 289   
Treasury shares                                                  (6)                   (9)  
Other reserves                                                  655                   389   
Retained earnings                                             3 980       21        3 285   
Non-controlling interest                                         (6)                   (2)   
Total equity                                                  5 912       19        4 952   
Liabilities                                                                                 
Non-current liabilities                                         462       14          406   
Deferred income tax liabilities                                 342       17          293   
Debt                                                            120        6          113   
Current liabilities                                           4 198       15        3 662   
Trade and other payables                                      3 577       24        2 883   
Debt                                                             84                   130   
Income tax liabilities                                           68       17           58   
Bank overdrafts                                                 469      (21)         591                                                                                             
Total liabilities                                             4 660                 4 068   
Total equity and liabilities                                 10 572                 9 020   
Net debt                                                        335                   564   
Net asset value per share (Rand)                              88,67                 74,41   
Capital expenditure                                                                         
Depreciation                                                    264                   242   
Amortisation                                                     31                    30   
Incurred                                                        855                   646   
Authorised and committed                                        143                    53   
Authorised but not contracted for                               184                   234   
                                                                                            

Consolidated statement of changes in equity                                                                                     
for the year ended 31 March 2014                                                                                                                                                                                                          
                                                           Attributable to the owners of                                                                     
                                                              Omnia Holdings Limited                                                                     
                                                                                                       Non-               
                                                                                                       con-                     
                                                     Stated    Treasury       Other    Retained    trolling                     
Rm                                                  capital      shares    reserves    earnings    interest         Total                                                                                                                                   
At 31 March 2012                                      1 289         (15)        133       2 620           1         4 028       
Recognised income and expenses                                                                                                  
Profit for the year ended 31 March 2013                                                     883          (3)          880       
Currency translation difference                                                 248                                   248       
Transactions with shareholders                                                                                                  
Ordinary dividends paid                                                                    (220)                     (220)      
Treasury shares sold                                                  8                                                 8       
Share-based payment - value of services provided                                  8                                     8       
Share Appreciation Rights exercised                                  (2)                      2                         -       
At 31 March 2013                                      1 289          (9)        389       3 285          (2)        4 952       
Recognised income and expenses                                                                                                  
Profit for the year ended 31 March 2014                                                     996          (4)          992       
Currency translation difference                                                 255                                   255       
Transactions with shareholders                                                                                                  
Ordinary dividends paid                                                                    (301)                     (301)      
Treasury shares purchased                                             3                                                 3       
Share-based payment - value of services provided                                 11                                    11       
At 31 March 2014                                      1 289          (6)        655       3 980          (6)        5 912       
                                                                                                                                

Reconciliation of headline earnings                                                                             
for the year ended 31 March 2014                                                                                                                                                                                               
                                                                                    Audited           Audited   
Rm                                                                                     2014      %       2013                                                                                                                
Profit for the year attributable to owners of Omnia Holdings Limited                    996               883   
Adjusted for loss/(profit) on disposal of fixed assets                                    2                (1)  
Adjusted for profit on disposal of associate                                            (55)                -   
Adjusted for impairment of available-for-sale financial asset                            11                 -   
Adjusted for insurance proceeds for replacement of property, plant and equipment         (3)                -   
Headline earnings                                                                       951               882   
Headline earnings per share                                                                                     
Headline earnings per share (cents)                                                   1 428      7      1 331   
Diluted headline earnings per share (cents)                                           1 283      3      1 249   
                                                                                                                

Segmental analysis                                                       
for the year ended 31 March 2014                                                                                                                
                                                                     Restated*    
                                                Audited               Audited      
Rm                                                 2014        %         2013                                                                                 
Revenue, net of intersegmental sales             16 259       21       13 432   
Mining                                            5 458       25        4 379   
Agriculture                                       6 680       24        5 399   
Chemicals                                         4 121       13        3 654   
Operating profit                                  1 416       15        1 231   
Mining                                              829       13          735   
Agriculture                                         431       (3)         443   
Chemicals                                           156      194           53   
                                                                         

Other reserves                                                                            
as at 31 March 2014                                                                                                                                                                
                                                                 Audited        Audited   
Rm                                                                  2014           2013                                                                                           
Share-based payment reserve                                          124            113   
Foreign currency translation reserve                                 528            273   
Net discount arising on acquisition of shares of subsidiaries          3              3   
                                                                     655            389   
                                                                                          

Notes
Basis of preparation
The summarised financial statements have 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 summarised financial statements do not include 
all of the information required by IFRS for full annual financial statements. The preparation of these financial statements
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.

The accounting standards, amendments to issued accounting standards and interpretations, which are not yet effective
as at 31 March 2014, have not been early adopted by the Group.
 
Audit opinion
The Group?s auditors, PricewaterhouseCoopers Inc., have issued their opinion on the Group?s financial statements for
the year ended 31 March 2014.  The audit was conducted in accordance with International Standards on Auditing.  They have
issued an unmodified audit opinion.  These summarised financial statements have been derived from the Group financial
statements and are consistent in all material respects with the Group financial statements.  A copy of their audit report
is available for inspection at the company?s registered office.  Any reference to future financial performance included
in this announcement, has not been reviewed or reported on by the auditors.


Additional information                                                                 
for the year ended 31 March 2014                                                                                                                                             
                                                                 Audited     Audited   
                                                                    2014        2013                                                                                        
Weighted average number of shares in issue (?000)                 66 592      66 288   
Weighted average number of diluted shares in issue ('000)         74 128      70 615   
Number of shares in issue ('000) (excluding treasury shares)      66 678      66 543   
                                                                                      

Commentary
INTRODUCTION Omnia is a diversified provider of specialised chemical products and services used in the mining,
agriculture and chemicals sectors.  Omnia has been in business for 61 years and has its head office in Johannesburg, South
Africa.  The Group?s operations extend into broader Africa, Australasia and Brazil.  Omnia 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.  We strengthen our business model 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, Agriculture and
Chemicals divisions.  The Group?s proven business model makes us a market leader in chemical services.  We prosper through
offering extraordinary value to our customers by tailoring our solutions to their business needs through product and service
innovation, with the expert application of these.
 
MACRO ENVIRONMENT The macro environment for this year was good for our Mining and Agriculture divisions and difficult
for our Chemicals division. The global economy experienced a slow but gradual recovery, with growth moderating in
emerging economies, a firm recovery in the USA economy and a patchy but directionally positive recovery in the Eurozone
economies. The net impact was continued good demand for mining and agricultural  commodities, large fluctuations in mining
commodity prices, lower global prices for agricultural commodities and flat to reduced prices for chemical products. The
Rand was weaker against the US Dollar which positively impacted our profit performance. Rand inflation increased but did
not move materially outside the South African Reserve Bank?s target inflation band. Interest rates remained at historical
lows for the year. Despite low interest rates and a weaker rand exchange rate, economic activity levels in the South
African manufacturing sector remained muted which was not supportive of our Chemicals division, as its primary customer
base is drawn from the South African manufacturing sector. 

FINANCIAL REVIEW 
Income statement  Group revenue rose 21,0% to R16 259 million (2013: R13 432 million) on the back of volume and sales
price increases in the Mining and Agriculture divisions and price increases in the Chemicals division.
  
Gross profit increased 17,6% to R3 612 million (2013: R3 072 million) and reduced marginally to 22,2% of revenue
(2013: 22,9%) due to reduced gross margins in the Mining and Agriculture divisions. 
 
Other operating income of R115 million (2013: R67 million) included a gain of R52 million on the disposal of the
interest in the Nalco Africa associate, and an insurance claim receipt of R12 million (2013: R21 million). 

Administration overheads increased by 22,0% to R908 million (2013: R744 million) due primarily to abnormally high
Long-Term Incentive Plan (LTIP) expenses. LTIP expenses included in administration expenses are IFRS 2 share-based payment
charges for equity settled LTIPs of R10,6 million (2013: R8,4 million), charges for cash settled LTIPs (these being
Partner 4 and Phantom Share Scheme) of R127,9 million (2013: R34,3 million) and the sharp increase in the provision for Share
Appreciation Rights of R61,7 million (2013: R29,8 million). The total charge for this year for these three items is
R200,2 million, a substantial increase on the R72,5 million of FY2013. The reason for the current year charges being
regarded as abnormal and the effects thereof are dealt with below. The remuneration report, in the corporate governance
section of our 2014 integrated annual report, which will be distributed in due course, provides full details on Omnia?s
employee participation schemes. Excluding the three aforementioned LTIP costs, other administration costs increased by 5,4%.
Distribution overheads increased by 16,4% to R1 324 million (2013: R1 137 million), primarily due to higher volumes in
the Mining and Agriculture divisions. 

Other operating expenses comprise a foreign exchange loss of R48 million (2013: R3 million gain) and amortisation of
intangible assets of R31 million (2013: R30 million).

Operating profit increased 15,0% to a new record high of R1 416 million (2013: R1 231 million), on the back of the
improved operating profit of our Mining and Chemicals divisions, the operating profit of the Agriculture division being on
par with the previous year. The Mining division?s operating margin reduced to 15,2% (2013: 16,8%) as a result of a lower
gross margin and abnormally high LTIP expenses. The Agriculture division?s operating margin reduced to 6,5% (2013:
8,2%) due to the effect of the new low margin wholesale business, the unfavourable ammonia to urea ratio and the production
problems experienced by the downstream granulation plant which necessitated the import of low margin fertilizer product
to make up for the production shortfall. Overhead costs were tightly controlled. The Chemicals division?s operating
margin improved to 3,8% (2013: 1,5%) due to increased sales prices and a gain on the disposal of the investment in Nalco
Africa, partially offset by the abnormally high LTIP expenses - other overheads being well controlled. 
  
Finance expenses increased to R143 million (2013: R117 million) due to higher levels of intra-year working capital,
marginally higher funding costs and much higher Kwacha cost of funding for the Zambia operations following the Zambian
Government decision that all local business must be conducted in local currency. Finance expense of R143 million was after
capitalisation of R26 million (2013: Nil) of interest costs relating to capital projects.  Finance income increased to
R56 million (2013: R35 million) due to increased finance levels to farmers.  

Income tax expense increased to R337 million (2013: R268 million), incurring an effective tax rate of 25,4% (2013:
23,3%). Income tax expense was reduced by R12 million (2013: R14 million) due to Sect12i tax investment allowances. The
previous year tax charge was affected by the reversal of overprovisions in prior years of R21 million.  
   
Profit after tax increased by 12,7% from R880 million to R992 million. 

Basic earnings per share increased by 12,3% to 1 496 cents per share. The dilutive effects of the LTIPs being the
Executive Plan (?Nanotron?) and the two Sakhile Initiative BBBEE schemes result in the fully diluted basic earnings per
share increasing by 7,5% to 1 344 cents per share. The remuneration section of our 2014 integrated annual report sets out
the details of these schemes as well as the likely timing of when these dilutions will take place. The actual dilution
pertaining to the two Sakhile schemes may only take place between 2017 and 2021.
 
Understanding the effects of the abnormally high LTIP expense on this year?s results 
As mentioned above, this year?s results have been impacted by the abnormally high cash settled LTIP expenses of R127,9 million
(2013: R34,3 million) and the sharp increase in the provision for Share Appreciation Rights of R61,7 million(2013: R29,8 million). 

The total expense for the cash settled LTIP (being Partner 4 and the Phantom Share Scheme) incurred in FY2013 and
FY2014 of R162,2 million related to the five-year period ended 31 March 2014 and would, under a more normal yearly earnings
pattern, have been spread over each of the five years in proportion to the normal profit in each of those five years. 
Due to the poor profit in the first year of this five-year plan and its catch-up occurring in the last two years of the
period, the expense was, in accordance with IFRS rules, only accounted for in the last 18 months of the five-year period,
after the target minimum earnings threshold was achieved. Accordingly, a more normalised cash settled LTIP charge for
FY2013 would have been R43 million (actual charge R34,3 million) and for FY2014 would have been R49 million (actual
charge of R127,9 million).  Adjusting the FY2013 and FY2014 results for this would mean that the operating profit for FY2013
would have been R9 million lower at R1 222 million (actual R1 231 million), and for FY2014 would have been R79 million
higher at R1 495 million (actual: R1 416 million) - an increase of 22,3% compared to the actual increase of 15,0%.
Applying the same principle, the profit after tax for FY2013 would have been R7 million lower at R873 million (actual 
R880 million), and for FY2014 would have been R57 million higher at R1 049 million (actual R992 million) - an increase of 20,2%
compared to the actual increase of 12,7%. The operating margin for FY2014 would have been 9,2%, on par with the 9,2% of
FY2013. The FY2015 charge for cash settled LTIP expenses and for Share Appreciation Rights are expected to be materially
lower than FY2014.

Balance sheet  Total assets increased by 17,2% from R9 020 million to R10 572 million due to capital expenditure on
plant and equipment and higher receivables.

Property, plant and equipment increased by R574 million to R3 672 million. This was due to capital expenditure of 
R838 million (2013: R623 million) on new and replacement assets; offset by depreciation of R264 million 
(2013: R242 million). 
     
Inventory increased only 11,1% from R2 892 million to R3 213 million on a 21,0% rise in revenue, due to improved
supply chain management.

Trade and other receivables increased by 28,3% to R2 751 million on the back of a 21,0% revenue increase. This was
mainly due to the Chemicals division receivables increasing by 30,0% on revenue growth of 12,7%. The Mining and Agriculture
divisions? receivables increased in line with the revenue increase.
 
Equity increased by 19,5% from R4 954 million to R5 918 million as a result of retained current-year earnings of
R992 million and an increase of R255 million in our foreign currency translation reserve due to the impact of the weaker
Rand:US Dollar year-end rate of 10,53 (2013: 9,23) on our US Dollar-denominated equity, partially offset by the dividend
payments of R301 million.

The year ended with a pleasingly strong balance sheet, net debt of R335 million (2013: R564 million) and a net
debt:equity ratio of 5,7% (2013: 11,4%). This position is particularly pleasing given the substantial growth experienced in and
high level of capital expenditure over the last four years.

Cash flow statement  Cash flow generated from operating activities improved to R1 315  million (2013: R1 075 million)
due to increased cash generated from operations and lower investment in net working capital. Overall year-end net
working capital was reasonably well controlled resulting in a cash outflow of R52 million compared to the  previous year cash
outflow on working capital of R172 million. Cash outflow from investing activities of R791 million (2013: R653 million)
comprises mainly expansion capital expenditure of R622 million. After taking into account the cash outflow from finance
activities of R337 million (2013: R315 million) to which dividends paid contributed R301 million, there was a net cash
inflow of R187 million (2013: inflow R107 million).

DIVISIONAL REVIEW
Mining Omnia?s 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 and geologists advise and support customer
operations, particularly in using its unique and proprietary BlastMap? software solutions combined with the accuracy of
the AXXIS? electronic delay detonators.

Protea Mining Chemicals provides a suite of value-added services to complement a wide range of chemicals that it
distributes to the mining industry in Africa mainly for the processing of ore. These include Protea Process?, a comprehensive
service that covers the design of equipment, logistics and on-site management and make up of chemicals.

Revenue increased 24,6% to R5 458 million (2013: R4 379 million) on the back of volume growth of 12,7% and an average
sales price increase of 11,9%. Price increases are mainly due to the weaker Rand. Operating margins reduced from 16,8%
to 15,2% as margins came under pressure from increased competitor pricing, high cost of bought-in replacement product
after illegal industrial action reduced production capacity at Losberg, abnormally high cash settled LTIP expenses and a
steep increase in the provision for Share Appreciation Rights. 
 
LTIP expenses included in operating profit are IFRS 2 share-based payment charges for equity settled LTIPs of R2,4 million 
(2013: R2,2 million), charges for cash settled LTIPs (these being Partner 4 and Phantom Share Scheme) of R25,6 million 
(2013: R9,1 million) and provision for Share Appreciation Rights of R31,6 million (2013: R14,8 million). Adjusting
for the abnormal portion only of the cash settled LTIP expenses (not for Share Appreciation Rights), operating margin
increased to 15,5%.

Net working capital increased to R1 052 million (2013: R796 million), due to higher volumes and the longer supply
chain process of our central and West Africa operations, which require higher levels of inventory. 

Agriculture Omnia?s Agriculture division comprises Omnia Fertilizer and Omnia Specialities and is the market leader in
southern Africa in its field. The division produces and trades in granular, liquid and speciality fertilizers for a
broad customer base of farmers, cooperatives 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  resulting in products and services that assist
customers to optimise crop yield and quality for maximised returns, while managing farming and environmental risk. The
Omnia Nutriology? brand is highly regarded in the regional market and its core concept of value-added products and services
is being increasingly recognised. 

Omnia Fertilizer services the South African market through regional sales offices and a comprehensive network of
agents and representatives supported by qualified agronomists. The rest of southern Africa is supported from regional offices
located in Angola, Mauritius, Mozambique, Zambia and Zimbabwe, while other markets such as Botswana, the Democratic
Republic of the Congo (DRC), Ethiopia, Kenya, Lesotho, Malawi, Namibia and Swaziland are serviced from South Africa.
 
Omnia Specialities supplies a comprehensive range of water soluble and foliar products, trace elements and organic
soil conditioners to the southern African market and through offices in Australia, New Zealand and Brazil and exports
products to Europe, Asia and South America.
 
Revenue increased 23,7% to R6 680 million (2013: R5 399 million) on the back of a 12,4% volume increase and an average
11,3% improvement in sales prices. The overall gross profit percentage weakened due to the even more unfavourable
ammonia to urea ratio, production problems on the granulation plants in the first half of the year which necessitated the
import of over 100 000 tons of fertilizer which sold at low margins, and the effect of the new lower margin wholesale
business that was started in the year. These were partially offset by the effects of the weaker Rand, increased production
volumes achieved on the new nitric acid complex, and improved sales margins mainly through product diversification and the
execution of the Nutriology? concept.  
  
The lower gross margin performance, well controlled overheads but abnormally high LTIP expenses caused operating
profit to decrease by 3% to R431 million (2013:  R443 million) and the operating margin reduced to 6,5% (2013: 8,5%).

LTIP expenses included in operating profit were IFRS 2 share-based payment charges for equity settled LTIPs of 
R3,7 million (2013: R2,7 million), charges for cash settled LTIPs, (these being Partner 4 and Phantom Share Scheme) of 
R67,7 million (2013: R15,1 million) and provision for Share Appreciation Rights of R21,1 million (2013: R8,4 million).

The new lower margin wholesale business and the abnormally high LTIP expenses had a significant impact on the
division?s results. Excluding the results of the new lower margin wholesale business, the division?s overall volumes were flat,
overall sales prices increased 11,3% and the operating margin improves from 6,5% to 6,9%. Adjusting further for the
abnormal portion only of the cash settled LTIP expense (not the Share Appreciation Rights), operating margin increases from
6,9% to 7,6%.

Net working capital decreased 20% to R765 million (2013: R959 million).

Chemicals The Chemicals division?s main business, Protea Chemicals is a long established and well known manufacturer
and distributor of specialty, functional and effective chemicals and polymers. It has a significant presence in every
sector of the broader chemical distribution market throughout southern and eastern Africa. Protea Chemicals represents many
leading domestic and international chemical producers, providing a cost efficient and effective distribution channel
for their products into the African market. Protea Chemicals continues to be rated as the largest chemical distributor in
Africa by the respected industry journal, ICIS Chemical Business. Subsidiary business, Zetachem, manufactures and
distributes chemicals for the treatment of potable water. 

Revenue increased by 12,8% to R4 121 million (2013: R3 654 million) due primarily to higher unit selling prices and a
small increase in volumes sold. With a maintained gross margin percentage, operating overheads being well controlled, a
capital gain on the sale of the Nalco Africa investment and abnormally high cash settled LTIP costs, the operating
margin improved to 3,8% (against a target of 4,5 - 5,5%). 

A capital gain of R52 million is included in operating profit in relation to the disposal of the investment in Nalco
Africa.  LTIP expenses included in operating profit were IFRS 2 share-based payment charges for equity settled LTIPs of
R4,4 million (2013: R3,5 million), charges for cash settled LTIPs (these being Partner 4 and Phantom Share Scheme) of
R34,5 million (2013: R10,1 million) and provision for Share Appreciation Rights of R9,1 million (2013: R7,3 million).
Adjusting for the profit on the sale of Nalco Africa and the abnormal portion only of the cash settled LTIP expenses (not the
Share Appreciation Rights), operating margin would have been 3,0%.
 
PROSPECTS The macro environment for next year appears positive and will be strongly influenced by the direction of the
Rand. Interest rates are expected to increase by no more than 50 bps while inflation is expected to move a little
outside the 6% limit set by the SARB, though probably only for a short period. 
 
Our Mining division anticipates further volume growth across its entire product range at growth rates similar to that
of FY2014. Our Agriculture division anticipates stable sales volume conditions as plantings are expected to remain at
high levels while operating profit is expected to be enhanced through better production volumes and efficiencies. The
unfavourable ammonia to urea ratio is not expected to revert to historical normal range in the year ahead. Our Chemicals
division anticipates improving its performance aided by the significant structural reorganisation implemented in April 2014
and a weaker Rand.
 
The Group?s operating cash flow is likely to remain strong, but net cash flow will be impacted by any further
weakening of the Rand which - while positive for earnings - would necessitate an increase in working capital funding. Continued
elevated levels of capital expenditure, albeit at lower levels than FY2014, will be incurred to support the growing
volumes and geographical spread of the Mining division and to further strengthen the security of the ammonia and ammonium
nitrate supply chain.

DIVIDENDS The Board has declared a final gross cash dividend of 290 cents (2013:  270 cents) per ordinary share
payable out of income in respect of the year ended 31 March 2014, which, together with the interim dividend of 185 cents
(2013: 150 cents) per share provides shareholders with a total dividend this year of 475 cents (2013: 420 cents) per ordinary
share. 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 246,50 cents per share for those shareholders 
subject to local dividends tax and 290 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 final dividend are as follows:
Last day to trade cum dividend            Friday, 11 July 2014
Shares trade ex-dividend                  Monday, 14 July 2014
Record date                               Friday, 18 July 2014
Payment date                              Monday, 21 July 2014
 
Share certificates may not be dematerialised or materialised between Monday, 14 July 2014 and Friday, 18 July 2014,
both dates inclusive.

NJ Crosse            RB Humphris                        NKH Fitz-Gibbon
Chairman             Group managing director            Group finance director
19 June 2014

Directors: 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, Epsom Downs Office Park, 13 Sloane Street,
Epsom Downs, Bryanston, 2021. 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: Merchantec Capital, 2nd Floor, North Block, Hyde Park Office Tower, corner 6th Road and
Jan Smuts Avenue, Hyde Park, 2196

www.omnia.co.za
Date: 24/06/2014 07:05:00 Supplied by www.sharenet.co.za                     
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