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Unaudited financial results for the six months ended 30 September 2022
OMNIA HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1967/003680/06
JSE code: OMN
ISIN: ZAE000005153
LEI NUMBER: 529900T6L5CEOP1PNP91
(Omnia or the Group)
SHORT FORM ANNOUNCEMENT - UNAUDITED FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2022
Strategic delivery
- Disciplined execution of strategy delivered robust financial performance
- Successful implementation of operating model underpinned enhanced operating performance
- Security of supply maintained to customers in a challenging operating environment
- Strong financial position maintained through prudent cash management and capital allocation
- Progress made on ESG objectives with the commissioning of reverse osmosis and solar energy plants
"Omnia delivered another set of exceptional financial results for HY2023, with growth in revenue, margin improvement
and prudent cash management. We have maintained the strength of our balance sheet, improved our return on capital and
are investing for the future. These results reflect the underlying strength of our operating model and the ongoing
disciplined execution of our strategy in a complex and challenging macro environment. We remain focused on ensuring
security of supply for our customers. Our capital discipline sustained a strong and flexible financial position,
providing strategic optionality for growth. By focusing on what is in our control and harnessing our drive, resilience,
and teamwork, we aim to create a stronger business that delivers sustainable value for all stakeholders; in line with
our purpose of innovating to enhance life, together creating a greener future." - Seelan Gobalsamy (CEO)
Financial Highlights (from continuing operations, excluding Zimbabwe operations)
- Adjusted headline earnings per share1 increased to 401 cents (HY2022: 304 cents)
- Adjusted earnings per share1 increased to 410 cents (HY2022: 300 cents)
- EBITDA (excluding impairments) increased to R1 412 million (HY2022: R1 084 million)
- Operating profit increased to R1 066 million (HY2022: R723 million)
1 The impact of hyperinflation on operations in Zimbabwe has necessitated the introduction of an adjusted earnings metric,
which excludes the Zimbabwean operations from the current and prior year periods.
Financial Indicators (from continuing operations, including Zimbabwe operations)
- Revenue increased to R12 164 million (HY2022: R9 902 million)
- Net working capital increased to R5 207 million (HY2022: R3 077 million)
- Net asset value increased to R9 809 million (HY2022: R9 323 million)
- Net cash2 decreased to R140 million (HY2022: R1 130 million net cash)
- Earnings per share increased to 304 cents (HY2022: 282 cents)
- Headline earnings per share increased to 295 cents (HY2022: 286 cents)
2 Excluding lease liabilities.
ESG Highlights
- Recordable case rate (Safety incidents reported against number of workers and hours worked) 0.20 (HY2022: 0.35)
- Group GHG emissions 78 143 tonnes of CO2e (HY2022: 113 830)
- Energy use efficiency 0.32 (HY2022: 0.31) gigajoules per tonne of product manufactured, with a production decrease of 10%
- Water use efficiency 0.46 (HY2022: 0.46) kilolitres per tonne of product manufactured, with a production decrease of 10%
Segmental Highlights (from continuing operations, excluding Zimbabwe operations)
Omnia operates in primary sectors and is well positioned to remain resilient in a volatile macro-economic environment.
The key driver of this performance has been our unrelenting focus on the successful execution of our strategy and the
continuous implementation of our operating model. A disciplined focus on costs, prudent capital expenditure and stringent
working capital management, has enabled the Group to maintain a robust financial position with a positive net cash balance
of R140 million. The Group generated an operating profit of R1 066 million for the period (HY2022: R723 million).
Agriculture
- Revenue increased 17% to R5 816 million
- Operating profit increased 33% to R658 million
The Agriculture segment's net revenue increased as a result of growth in AgriBio and speciality products, the value
proposition of the Omnia Nutriology model to customers, as well as supportive commodity prices. Volumes reduced
compared to the prior period largely due to South African farmers buying inputs later in the season in anticipation of
softening commodity prices, inclement weather delaying harvesting, and the deferred contract process in Zambia.
Operating profit increased due to our focused strategy to optimise volume-margin mix, which was supported by efficient
manufacturing facilities and an agile supply chain.
Volatility in commodity prices experienced since the Russia-Ukraine conflict escalated, compounding the already
challenging operating conditions faced by the agribusiness and fertilizer industries. Local supply chain disruptions
added to these pressures, making security of supply ever more critical for customers. Omnia's integrated supply chain
approach ensured the business was able to continue to meet customer demand.
Manufacturing's focus on quality products and optimisation enabled the business to market superior offerings at
competitive prices. Sustained offtake from the Mining segment, in combination with trade sales, contributed to higher
plant utilisation, positively impacting margins and profitability.
The operations in the SADC region benefited from a broader product offering targeting different customer segments.
The International business continued with its global distribution drive of AgriBio products, achieving increased
volumes in Brazil and Australia, and securing new volumes in South American markets.
Net working capital was well managed in a high commodity price environment. This is anticipated to unwind in the second
half of the financial year.
Mining
- Revenue increased 32% to R4 314 million
- Operating profit increased 44% to R359 million
The Mining segment's net revenue and operating profit increased due to securing of multiple contract extensions and new
business in both surface and underground mines, supported by higher commodity prices. This was partially offset by
above inflationary input cost increases and lower volumes, which were negatively affected by inclement weather,
industrial action, regulatory challenges and the intermittent availability of utility services.
Notwithstanding these challenges, the Group's integrated supply chain and manufacturing capabilities enabled the
segment to meet customer requirements, improve its competitive position, drive efficiencies and expand operating
margins.
Internationally, several new mining contracts were secured in the SADC region and in Namibia a sizeable customer
renewed its contract. An active growth strategy through a hybrid of partnering and direct access to market in Australia
continued to be pursued, while the Indonesian partnership is in its final stages of execution. Good progress has been
made in establishing manufacturing facilities in Canada and mobilising for a large contract.
In line with continuous technology improvement, test results from the latest electronic delay detonators confirmed
product stability. The first blast of these detonators was accomplished in Lesotho followed by market entry into Australia.
These achievements reaffirmed the resilience of these systems even in cold climates.
Protea Mining Chemicals delivered a strong set of results with volume and margin growth in SADC. The provision of
technical solutions to key markets combined with the business' ability to successfully overcome supply challenges
underpinned this strong performance.
Chemicals
- Revenue increased 0.3% to R1 436 million
- Operating profit increased 108% to R104 million
The Chemicals segment's net revenue was stable, while operating profit doubled compared to the prior period. This was
driven by product-mix improvement across the business and profit on the disposal of an asset which was partially off-set
by non-recurring expense items.
The implementation of the sector-specific business model designed to drive expertise-based unique customer and principal
relationships is progressing well. Emphasis has been placed on shifting the product portfolio towards high-performance
specialty and environmentally-friendly solutions. Success in this respect has been achieved in the agriculture, consumer
care and industrial sectors, with advances being made in biodegradable cleaning and coatings chemicals.
Reliability of supply to customers remained a key focus area and a core competence that mitigated the effects of supply chain
disruptions, service provision challenges and other sociopolitical factors. The ability of the business to reliably source
products through global partners and principals remains key to ensuring that customer requirements are consistently met.
Continued focus on customer service delivery coupled with expertise-based products and applications is expected to provide the
basis from which the business will maintain and improve operating margins.
SARS International tax audit update
On 30 September, SARS partially allowed our objection to the additional tax assessments raised in respect of the
Group's 2014 - 2016 years of assessment resulting in a nominal reduction in the original tax assessments raised by
SARS. The Group disagrees with SARS' findings and will lodge an appeal against the revised assessments following the
partial allowance of our objection. The Group remains committed to expeditiously bringing this matter to a close.
Restatements for the periods ended 30 September 2021 and 30 September 2020
On adoption of IFRS 16, certain leases were recognised that did not meet the recognition criteria of IFRS 16. In
addition, another lease was recognised over the incorrect lease term. Provisions have, in the past, been included in
trade and other payables in the consolidated statement of financial position and not set out on a separate line. The
release of restricted cash was also restated to reflect in investing activities and not operating activities in the
statement of cash flows. The comparative disclosures as at 30 September 2021 and 30 September 2020 have been restated
for these matters. The above restatements were already correctly applied in the 31 March 2022 annual financial
statements.
There was no material impact on the consolidated profit before or after tax, total earnings per share (basic, adjusted and
diluted), total headline earnings per share (basic, adjusted and diluted), net asset value of the Group or net asset value
per share.
Short form announcement
This announcement is a condensed version of the full announcement in respect of the unaudited financial results for the
six-month period ended 30 September 2022 of Omnia Holdings Limited and its subsidiaries, and as such, it does not
contain full or complete details pertaining to the Group's results. Any investment decisions should be made based on
the full announcement. The full announcement is available through the following link:
https://senspdf.jse.co.za/documents/2022/JSE/isse/OMN/OMNHY23.pdf and can also be found on the Group's website
(www.omnia.co.za/reports-and-results/financial-results/2023) or requested from Investor Relations at
omniaIR@omnia.co.za. It is also available for inspection at the registered office, Omnia House, Building H, Monte
Circle Office Park, 178 Montecasino Boulevard, Fourways, Sandton, 2191, and the offices of Omnia's sponsor Java Capital
Trustees and Sponsors Proprietary Limited, 6th Floor, 1 Park Lane, Wierda Valley, Sandton, 2196, from 09:00 to 16:00
weekdays at no charge. This condensed announcement is the responsibility of the board of directors of Omnia ("the board")
and has been approved.
Executive directors: T Gobalsamy (chief executive officer), S Serfontein (finance director)
Non-executive directors: T Eboka (chair), Prof N Binedell, R Bowen (British), G Cavaleros, S Mncwango, T Mokgosi-Mwantembe,
W Plaizier (Dutch), Z Swanepoel, R van Dijk (appointed 1 May 2022)
Company secretary: M Nana
JSE sponsor: Java Capital
22 November 2022
www.omnia.co.za
Date: 22-11-2022 07:05:00
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