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Audited results for the year ended 31 March 2023
Omnia Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number 1967/003680/06
JSE code: OMN
LEI NUMBER: 529900T6L5CEOP1PNP91
ISIN: ZAE000005153
(Omnia or the Group)
SHORT FORM ANNOUNCEMENT: Audited results for the year ended 31 March 2023
STRATEGIC DELIVERY
- Strong financial position and cash generation underpinned by disciplined capital management
- Security of supply to customers maintained in a challenging operating environment
- Disciplined strategy execution delivers improved return on capital
- Progress achieved on international expansion
"Omnia delivered a strong and resilient set of results against a challenging operating backdrop. We leveraged our
competitive advantage and operating discipline resulting in revenue and operating profit growth, solid cash generation
and a robust financial position. Additionally, through focused initiatives aligned to our sustainability commitments,
we enhanced safety within our business and reduced our environmental footprint. We are proud of the progress our teams
have made and the milestones achieved. Looking ahead, as we celebrate seven decades of unwavering commitment to
excellence and staying true to our core values, we are confident in our ability to remain resilient and committed to
driving further growth and embracing innovation to enhance our performance and value creation."
Seelan Gobalsamy (CEO)
FINANCIAL HIGHLIGHTS (continuing operations including Zimbabwe)
- Revenue up 24% to R26 572 million (FY2022: R21 437 million)
- Operating profit up 19% to R1 899 million (FY2022: R1 597 million)
- Headline earnings per share up 10% to 742 cents (FY2022: 672 cents)
- Ordinary dividend declared* up 36% to 375 cents (FY2022: 275 cents)
- Earnings per share increased by 6% to 692 cents (FY2022: 653 cents)
- Net working capital to revenue ratio increased by 3% to 16.0% (FY2022: 15.6%)
- Net cash decreased by 23% to R1 818 million (FY2022: R2 352 million)
- Net asset value increased by 2% to R10 255 million (FY2022: R10 018 million)
* REPURCHASE OF SHARES
The board has approved a general repurchase of up to 10% of the shares in issue, which requires shareholder approval.
FINANCIAL INDICATORS (continuing operations excluding Zimbabwe)
- EBITDA increased by 8% to R2 665 million (FY2022: R2 478 million)
- Operating profit increased by 15% to R1 983 million (FY2022: R1 726 million)
- Adjusted headline earnings per share1 increased by 1% to 739 cents (FY2022: 730 cents)
- Adjusted earnings per share1 increased by 5% to 744 cents (FY2022: 711 cents)
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 year (FY23) and FY22.
ESG HIGHLIGHTS
Safety remains a key priority, with our Chemicals and Mining segments achieving Zero RCR. Our intent remains to move
towards a green and sustainable portfolio of products, technologies and services, with progress made across key ESG
metrics. Our measures for water use efficiency and carbon emissions continue to improve beyond our 2030 ESG goals. Our
energy-use efficiency progress has been impacted by increased use of diesel fuel for generators due to load shedding
and higher gas consumption in the granulation plants as a result of high humidity levels from higher rainfalls.
- Recordable Case Rate (RCR) (number of recordable cases or injuries relative to 200 000 working/exposure hours)
decreased to 0.16% (FY2022: 0.21%)
- Greenhouse gas emissions (tonnes C02e) decreased to 187 602 (FY2022: 336 908)
- Renewable energy - Solar generation (output) increased to 4 911 MWh (FY022: 183 MWh)
- B-BBEE rating Level 2 (FY2022: Level 2)
- Environmental incidents Zero (FY2022: Zero)
- Water recycled or reused increased to 140 megalitres (FY2022: 66 megalitres)
- Water use efficiency (kilolitres per tonne manufactured) decreased to 0.44 (FY022: 0.48)
- Energy use efficiency (gigajoules per tonne manufactured) increased to 0.30 (FY2022: 0.29)
SEGMENTAL HIGHLIGHTS (from continuing operations excluding Zimbabwe)
Omnia operates in primary sectors and remains resilient in a volatile macro-economic environment. We have effectively
leveraged the competitive advantage in our integrated manufacturing capability and supply chain practices by ensuring
security of supply to our customers.
Agriculture
- Revenue increased 31% to R14 694 million
- Operating profit increased 2% to R1 248 million
The Agriculture segment demonstrated a resilient financial performance for the year, despite operating in a highly
challenging environment. Initial favourable agronomic conditions in most key regions allowed us to capitalise on
opportunities, thereafter adverse weather conditions in Australia, Zambia and South Africa had a negative impact on
volumes.
Throughout the year, we encountered persistent supply chain challenges and experienced significant volatility in
commodity prices. In the first half of the year, we witnessed elevated commodity prices, while the second half of the
year saw a steady decline, with a particularly rapid drop in the last quarter. This acute drop in prices coincided with
adverse weather conditions and reduced demand for fertilizer. In South Africa and other parts of Africa, these
disruptions were further compounded by infrastructure challenges as well as ongoing power outages. Our optimised
planning and diversified supply chain enabled by our integrated manufacturing capability allowed us to maintain
security of supply to our customers in the African region.
Our solar energy plant at Sasolburg was commissioned in October 2022 to augment electricity supply at the facility. The
first phase of the solar plant produces five megawatts of electricity at peak performance while another five megawatts
is under construction. Together with our ability to generate electricity from excess process steam from the nitric acid
plants, the site's own energy generation will likely average between 35% and 50% of its annual electricity requirement.
We will continue to focus on expanding our distribution on the African continent. We aim to grow brand awareness and
reputation with a strong focus on risk management to limit investment exposure and leverage partnerships where
possible. Agriculture International will continue to grow its wholesale distribution footprint and expand its customer
proposition through the AgriBio product offerings backed by solid agronomic acumen and proven scientific solutions. The
growth strategy will target our distribution in new geographical markets identified.
Mining
- Revenue increased 28% to R8 533 million
- Operating profit increased 54% to R790 million
The Mining segment saw revenue and operating profit increase due to higher average commodity prices, which were
partially offset by lower volumes and above-inflationary input cost increases. The operating performance was
constrained by several challenges, including volatile commodity prices, currency fluctuations and unprecedented levels
of load shedding in South Africa, while geopolitical tensions created prolonged supply chain and logistic challenges,
and unprecedented weather patterns created operational disruptions. Despite these challenges, the Mining segment
ensured that continuous supply to customers was prioritised. This included implementing alternate power supplies to
mitigate the risk of lost production and sourcing from alternate international suppliers.
Our Indonesian partnership was concluded in May 2023 with PT. Multi Nitrotama Kimia (MNK), the second largest
explosives company in Indonesia with complete explosives business licences. MNK is an established ammonium nitrate
manufacturer and has an existing services base to leverage a complementary technology fit to mining. We made good
progress in infrastructure build and mobilisation in Canada.
Mining Chemicals achieved an improvement in operating profit and margins. This was due to an improved sales mix and
increase in sales volume in the copper and precious metals sectors. Our agile supply chain and competitive
manufacturing capabilities enabled us to secure new customers in constrained markets.
Our focus remains on strategic partnerships to enable the creation of a holistic value proposition to catalyse
long-term growth. By becoming more embedded in the mining cycle and diversifying into technology solutions, mining will
deliver greater value through enhanced efficiencies and operating margins.
Chemicals
- Revenue decreased 8% to R2 746 million
- Operating profit decreased 7% to R132 million
Protea Chemicals' net revenue and operating profit decrease was mainly due to headwinds in the manufacturing sector, as
well as once-off cost adjustments relating to inventory management and accelerated amortisation of IT software, offset
by a profit from the sale of the Jacobs site. The implementation of the Strategic Business Sector (SBS) model designed
to drive expertise based unique customer and principal relationships has progressed well. Emphasis has been placed on
building a portfolio of high-performance specialty and environmentally friendly products and solutions to supplement
traditional chemistries.
Focus on our strategic growth sectors enabled the business to shift towards an improved value proposition for
customers. Although supply chains generally reverted to more normalised levels post-COVID19, structural market changes
have been evident. Security of supply has become an essential aspect of customer procurement strategies with heightened
emphasis on improved service delivery. General inflationary pressures also continued to be problematic during the year,
compounded by the impact of increased load shedding which resulted in an overall decline in the manufacturing sector.
Ongoing engagements with new principals are yielding results with a number of new customers acquired. We continue to
focus management actions on curbing costs and optimising business processes with the supply of green and
environmentally friendly alternative chemistries and solutions being a key strategic focus area in the medium term.
South African Revenue Service (SARS) international tax dispute update
On 30 September 2022, SARS partially allowed our objection to the additional tax assessments raised in respect of the
Group's 2014 to 2016 years of assessment, resulting in a nominal reduction in the original tax assessments raised by
SARS. The Group disagrees with SARS' findings and lodged an appeal against the revised assessments indicating our
willingness to partake in Alternative Dispute Resolution (ADR) proceedings. On 17 February 2023, SARS confirmed the
matter was appropriate for ADR which the parties are currently engaged in. We remain committed to expeditiously
bringing this matter to a close.
SHORT FORM ANNOUNCEMENT - This announcement is a summarised version of the full announcement in respect of the audited
financial results for the year ended 31 March 2023 of Omnia Holdings Limited and its subsidiaries and, as such, it does
not contain full or complete details pertaining to the Group's financial statements. The results have been audited by
the company's external auditor, Deloitte & Touche who expressed an unmodified opinion on the summarised and
consolidated financial statements. Shareholders are advised that, in order to obtain a full understanding of the nature
of the auditor's engagement and more specifically the nature of the information that has been audited, they should
obtain a copy of the auditor's report (available through the following link):
https://www.omnia.co.za/downloads/send/90-2023/340-yearend-march2023-long-form. The auditor's report on the
consolidated financial statements sets out a key audit matter, being the accounting for uncertain tax positions, and
the basis for the unmodified opinion together with the accompanying audited Group consolidated annual financial
statements which are available on the following link.
https://www.omnia.co.za/downloads/send/90-2023/341-omnia-holdings-afs-31march2023. Both documents are available for
inspection at the company's 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. Any investment decisions
should be made based on the full announcement. This announcement is itself not audited, but is extracted from audited results.
The full announcement is available through the following link:
https://senspdf.jse.co.za/documents/2023/JSE/ISSE/OMN/FY23.pdf
and can also be found on the Group's website www.omnia.co.za or requested from Investor Relations at omniaIR@omnia.co.za.
This announcement is the responsibility of the board of directors of Omnia 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), R van Dijk, Z Swanepoel (resigned 31 March 2023)
Company secretary: M Nana
JSE sponsor: Java Capital
19 June 2023
www.omnia.co.za
Date: 19-06-2023 07:05:00
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