Wrap Text
Audited results for the year ended 31 March 2013
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 2013
Highlights
- Profit for the year up 40% to a record high R880 million
- Operating margin up from 8,1% to 9,1%
- EPS up 40% to 1 332 cents per share
- Total dividend for the year up 50% to 420 cents per share
- Debt:equity ratio improves to 11,6%
Summary consolidated income statement
for the year ended 31 March 2013
Audited Audited
Rm 2013 % 2012
Revenue 13 543 24 10 945
Cost of sales (10 453) 22 (8 552)
Gross profit 3 090 29 2 393
Other operating income 69 (1) 70
Administrative expenses (744) 26 (591)
Distribution expenses (1 154) 24 (928)
Other operating expenses (27) (59)
Operating profit 1 234 39 885
Finance expenses (119) 49 (80)
Finance income 35 (3) 36
Share of loss of associate (2) (5)
Profit before taxation 1 148 37 836
Income tax expense (268) 29 (207)
Profit for the year 880 40 629
Attributable to:
Owners of Omnia Holdings Limited 883 630
Non-controlling interest (3) (1)
880 629
Earnings per share from profit attributable to owners of
Omnia Holdings Limited
Basic earnings per share (cents) 1 332,1 40 949,6
Diluted earnings per share (cents) 1 250,4 32 948,3
Summary consolidated statement of comprehensive income
for the year ended 31 March 2013
Audited Audited
Rm 2013 2012
Profit for the year 880 629
Other comprehensive income, net of tax
Currency translation differences 248 114
Cash flow hedge - (1)
Total comprehensive income for the year 1 128 742
Attributable to:
Owners of Omnia Holdings Limited 1 131 743
Non-controlling interest (3) (1)
1 128 742
Summary consolidated cash flow statement
for the year ended 31 March 2013
Audited Audited
Rm 2013 2012
Operating profit 1 234 885
Depreciation and amortisation 272 180
Adjustment for non-cash items 32 13
Cash generated from operations 1 538 1 078
Utilised by working capital (176) (448)
Interest paid (119) (79)
Interest received 35 36
Taxation paid (207) (58)
Net cash inflow from operating activities 1 071 529
Cash outflow from investing activities (653) (917)
Cash outflow from financing activities (315) (524)
Net increase/(decrease) in cash and cash equivalents 103 (912)
Net cash and cash equivalents at beginning of the year (433) 462
Exchange rate movements on cash and cash equivalents - 17
Net cash and cash equivalents at end of the year (330) (433)
Summary consolidated balance sheet
as at 31 March 2013
Audited Audited
Rm 2013 % 2012
ASSETS
Non-current assets 3 700 12 3 293
Property, plant and equipment 3 099 15 2 705
Intangible assets 516 (1) 522
Available-for-sale financial assets 21 17 18
Investment in associate 61 45 42
Deferred income tax assets 3 (50) 6
Current assets 5 354 27 4 226
Inventories 2 914 40 2 079
Trade and other receivables 2 170 12 1 943
Cash and cash equivalents 270 32 204
Total assets 9 054 7 519
Equity
Equity attributable to owners of Omnia Holdings Limited 4 954 23 4 027
Stated capital 1 289 1 289
Treasury shares (9) (15)
Other reserves 389 133
Retained earnings 3 285 25 2 620
Non-controlling interest in equity (2) 1
Total equity 4 952 23 4 028
Liabilities
Non-current liabilities 406 (14) 470
Deferred income tax liabilities 293 14 257
Debt 113 (47) 213
Current liabilities 3 696 22 3 021
Trade and other payables 2 907 31 2 224
Debt 130 131
Income tax liabilities 59 103 29
Bank overdrafts 600 (6) 637
Total liabilities 4 102 3 491
Total equity and liabilities 9 054 7 519
Net debt 573 777
Net asset value per share (Rand) 74,41 60,63
Capital expenditure
Depreciation 242 151
Amortisation 30 29
Incurred 646 993
Authorised and committed 234 322
Authorised but not contracted for 53 187
Summary consolidated statement of changes in equity
for the year ended 31 March 2013
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 2011 1 289 (19) 11 2 057 1 3 339
Recognised income and expenses
Profit for the year ended 31 March 2012 630 (1) 629
Cash flow hedge (1) (1)
Currency translation difference 114 114
Transactions with shareholders
Ordinary dividends paid (66) (66)
Treasury shares sold 4 4
Share-based payment- value of services provided 9 9
Transfer from non-controlling interest (1) 1 -
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 purchased 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
Reconciliation of headline earnings for the year ended 31 March 2013
Audited Audited
Rm 2013 2012
Profit for the year attributable to owners of
Omnia Holdings Limited 883 630
Adjusted for (profit)/loss on disposal of fixed assets (1) 3
Adjusted for insurance proceeds for replacement of
property, plant and equipment - (5)
Adjusted for profit on disposal of investment - (2)
Adjusted for impairment of property, plant and equipment - 10
Headline earnings 882 636
Headline earnings per share
Headline earnings per share (cents) 1 330,6 958,6
Diluted headline earnings per share (cents) 1 249,0 957,3
Summary segmental analysis
for the year ended 31 March 2013
Audited Audited
Rm 2013 % 2012
Revenue, net of intersegmental sales 13 543 24 10 945
Mining 4 379 44 3 051
Agriculture 5 399 21 4 476
Chemicals 3 765 10 3 418
Operating profit 1 234 39 885
Mining 735 54 476
Agriculture 443 37 323
Chemicals 56 (35) 86
Other reserves
as at 31 March 2013
Audited Audited
Rm 2013 2012
Reserves comprise of:
Share-based payment reserve 113 105
Foreign currency translation reserve 273 25
Net discount arising on acquisition of shares of subsidiaries 3 3
389 133
NOTES
ACCOUNTING POLICIES
The summary consolidated financial statements for the year ended 31 March 2013 were prepared in accordance with the
requirements of the JSE Limited Listings Requirements for provisional reports and the requirements of the Companies
Act applicable to summary financial statements. The Listings Requirements require provisional reports to be prepared
in accordance with the framework concepts, 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 Reporting Pronouncements (FRPs) as issued by the Financial Reporting Standards Council (FRSC)and must also
contain the information required by IAS 34 Interim Financial Reporting. The accounting policies applied in the
preparation of the consolidated financial statements from which the summary consolidated financial statements were
derived are in terms of IFRS and are consistent with the accounting policies applied in the preparation of the previous
consolidated annual financial statements. The summary consolidated financial statements do not include all of the
information required by IFRS for full annual financial statements.
The accounting standards, amendments to issued accounting standards and interpretations, which are not yet effective
at 31 March 2013, have not been early adopted by the Group.
DIVIDENDS
An interim dividend of 150 cents was declared on 22 November 2012 in respect of the current year.
A final dividend of 270 cents per share was declared on 20 June 2013 bringing the dividend for the year to 420 cents
per share.
AUDIT OPINION
The Groups auditors, PricewaterhouseCoopers Inc., have issued their opinion on the Groups financial statements for
the year ended 31 March 2013. The audit was conducted in accordance with International Standards on Auditing. They
have issued an unmodified audit opinion on the Group's financial statements. These summarised financial statements have
been derived from the Group financial statements and are consistent in all material respects with the Group financial
statements. PricewaterhouseCoopers Inc. have also issued an unmodified audit opinion on these summarised financial
statements. Copies of these audit reports are available for inspection at the Companys registered office. The auditors
report does not necessarily cover all of the information contained in this announcement. Shareholders are therefore
advised that in order to obtain a full understanding of the nature of the auditors work they should obtain a copy of that
report together with the accompanying financial information from the registered office of the company.
Any reference to future financial performance included in this announcement, has not been reviewed or reported on by the
Group's independent auditors.
Additional information
for the year ended 31 March 2013
Audited Audited
2013 2012
Final dividend paid per share (cents) in respect of the prior year 180 -
Interim dividend paid per share (cents) in respect of current year 150 100
Weighted average number of shares in issue ('000) 66 288 66 342
Weighted average number of diluted shares in issue ('000) 70 615 66 433
Number of shares in issue ('000) (excluding treasury shares) 66 543 66 437
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 60 years and has its head office in Johannesburg,
South Africa. The Groups 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 Groups 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 exceptionally positive for our Mining division, good for our
Agriculture division and difficult for our Chemicals division. The global economy experienced a slow but gradual
recovery, with growth moderating in emerging economies, a small but directionally firm recovery in the USA economy and some
stabilisation- albeit at low activity levels- in the Eurozone economies. The net impact was continued strong demand for
mining and agricultural commodities, large fluctuations in mining commodity prices, relatively firm prices for
agricultural commodities and flat to reduced prices for chemical products. The rand was weaker against the US dollar
especially in our second half which positively impacted our profit performance. Rand weakening occurred too late in the
season to fully benefit the Agriculture division. Inflation increased but did not move materially outside the South African
Reserve Banks 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
Group revenue rose 23,7% to R13 543 million (2012: R10 945 million) on the back of volume and sales
price increases in the Mining and Agriculture divisions.
Gross profit increased 29,1% to R3 090 million (2012: R2 393 million) and improved to 22,8% of revenue (2012: 21,9%)
due to improved gross margins in the Mining and Agriculture divisions being partially offset by reduced margins in the
Chemicals division.
Other operating income of R69 million (2012: R70 million) included an insurance claim receipt of R21 million (2012:
R22 million). The insurance claim proceeds in both years were for the incident that occurred in March 2011 at BMEs
Losberg megamite plant.
Administration overheads increased by 25,9% to R744 million (2012: R591 million). Included in administration expenses
are share-based payment charges of R8,4 million (2012: R8,5 million), charges for long-term incentive schemes being
Share Appreciation Rights, Partnership with Management 4 and Phantom Share Scheme of R64,8 million (2012: R4,9 million) as
well as higher provisions for annual short-term cash incentive bonuses for all levels of employees. Taking these higher
employee related costs into account, administration costs were well controlled. Distribution overheads increased by 24,4%
to R1 154 million (2012: R928 million), primarily due to higher volumes in the Mining and Agriculture divisions. Other
operating expenses comprise foreign exchange gain of R3 million (2012: R30 million loss) and amortisation of intangible
assets of R30 million (2012: R29 million).
Operating profit increased 39,4% to a new record high of R1 234 million (2012: R885 million), on the back of the
improved operating margins of our Mining and Agriculture divisions, offset by a reduction in the operating margin of the
Chemicals division. The Mining division improved its operating margin to 16,8% (2012: 15,6%) as a result of an improved
gross margin and operating leverage. The Agriculture divisions operating margin improved to 8,2% (2012: 7,2%) due to the
positive impact of the production of fertilizers and explosives products from the new nitric acid complex that replaced
more expensive purchased product, partially offset by the unfavourable ammonia to urea ratio which reduced margins.
Overhead costs were tightly controlled. The Chemicals divisions operating margin reduced to 1,5% (2012: 2,5%) due to a full
1,6% point reduction in the gross margin.
Finance expenses increased to R119 million (2012: R80 million) due to higher levels of working capital, the cessation
of capitalisation of interest costs relating to the new nitric acid complex and which in FY2012 amounted to R51 million,
partially offset by the full year benefit of having repaid the DMTN R404 million high interest rate loan in November
2011.
Income tax expense increased to R268 million (2012: R207 million), incurring an effective tax rate of 23,3% (2012:
24,8%). Income tax expense was reduced by R14 million (2012: R23 million) due to the Sect12i tax allowance attributable to
the new nitric acid complex and the reversal of overprovisions in prior years of R21 million (2012: R7 million).
Total assets increased by 20,4% from R7 519 million to R9 054 million due to higher inventory levels.
Property, plant and equipment increased by R394 million to R3 099 million. This was due to capex spend of R623 million
on new and replacement assets and the balance of costs for ancillary items around the logistics and downstream plants
connected to the new nitric acid complex; offset by depreciation of R242 million.
Inventory increased by R835 million from R2 079 million to R2 914 million. The Agriculture divisions inventory
increased by R468 million because of higher ammonia inventory levels in the imported ammonia supply chain and higher unit
costs. The Mining division inventory increased by R280 million because of higher inventory levels required to support BMEs
operations in more remote parts of Africa.
Trade and other receivables increased only 11,7% from R1 943 million to R2 170 million on a 23,7% rise in revenue, due
to stringent management of receivables.
Equity increased by 23% from R4 027 million to R4 954 million as a result of retained current-year earnings of R880
million and an increase of R248 million in our foreign currency translation reserve due to the impact of the weaker rand:
US dollar year end rate of 9,23 (2012: 7,66) on our US dollar-denominated equity, partially offset by the dividend
payments of R220 million.
Cash flow generated from operating activities improved to R1 071 million (2012: R529 million) due to increased cash
generated from operations and lower investment in net working capital. In the prior year, cash outflow on working capital
increased by R448 million as a result of a R544 million increase in inventory and a R125 million increase in
receivables, offset by an increase in payables of R221 million. This year, cash outflow on working capital increased by R176
million as a result of R712 million increase in inventory, the reasons for which were explained earlier, R81 million
increase in receivables, offset by an increase in payables of R617 million. Cash outflow from investing activities of R653
million (2012: R917 million) comprises mainly expansion capex of R535 million. After taking into account the cash outflow
from finance activities of R315 million (2012: R524 million) to which dividends paid contributed R220 million, there was a
net cash inflow of R103 million (2012: Outflow R912 million).
The year ended with a pleasingly strong balance sheet, net debt of R573 million (2012: R777 million) and a net
debt:equity ratio of 11,6% (2012: 19,3%). This position is particularly pleasing given the substantial expenditure on the new
nitric acid complex over the last three years.
Divisional review
Mining
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
chemicals.
Revenue increased 43,5% to R4 379 million (2012: R3 051 million) on the back of strong volume growth of 24% and an
average sales price increase of 20%. The South Africa, southern Africa and west Africa operations demonstrated strong
growth. Gross margins improved due to a higher ammonia price, differentiated supply offering and lowering the cost of raw
materials through backward integration in the supply chain. Operating leverage kicked in as a result of well controlled
overhead costs, resulting in a 54,4% increase in operating profit to R735 million (2012: R476 million) and the operating
margin rising from 15,6% to 16,8%.
Net working capital increased to R796 million (2012: R540 million), due to higher volumes and the longer supply chain
process of our West Africa operations, which require higher levels of inventory.
Agriculture
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 divisions 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.
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 Zambia, Zimbabwe, Angola, and more recently Mozambique, while other markets such as the Democratic Republic
of the Congo (DRC), Botswana, Namibia, Ethiopia and Kenya 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 South African market and through local offices in Australia, New Zealand and Brazil, while its
speciality products are also distributed to Europe, Asia and South America.
Revenue increased 20,6% to R5 399 million (2012: R4 476 million) on the back of a 9% volume increase and an average
11% improvement in sales prices. The overall gross profit percentage improved due to lower cost own manufactured product
from the new nitric acid complex replacing more expensive purchased product, largely offset by the margin squeeze caused
by the unfavourable ammonia to urea ratio. With overheads being well controlled, operating profit increased by 37,2% to
R443 million (2012: R323 million) and the operating margin improved to 8,2% (2012: 7,2%).
Net working capital increased 16,2% to R959 million (2012: R825 million) due to increased levels of business and
higher unit costs.
Chemicals
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 worlds leading chemical producers.
Revenue increased by 10,2% to R3 765 million (2012: R 3 418 million) due to higher unit selling prices. With gross
margin percentage reducing by a significant 1,6%, operating overheads being well controlled and much higher long-term
employee incentive scheme costs, the operating margin was reduced to 1,5% (against a target of 4,5%- 5,5%).
Prospects
The macro environment for next year appears promising and will be strongly influenced by the direction of
the rand. Interest rates are expected to remain at current levels while inflation is expected to move 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. Our Agriculture division
anticipates favourable sales volume conditions as plantings are expected to remain at high levels but less favourable margin
conditions as the ammonia to urea ratio is not expected to revert back to historical normal range in the next financial
year. Our Chemicals division anticipates improving its performance aided by a weaker rand and strategic cost reduction
initiatives being implemented.
The Groups operating cash flow is likely to remain strong, but net cash flow will be impacted by the weakening of the
rand which- while positive for earnings- would necessitate an increase in working capital funding. Additional
investment in plant, infrastructure and storage capacity is required 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 270 cents (2012: 180 cents) per ordinary share payable
out of income in respect of the year ended 31 March 2013, which, together with the interim dividend of 150 cents (2012:
100 cents) per share provides shareholders with a total dividend this year of 420 cents per 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 229,50 cents per share for those shareholders subject to local dividends
tax and 270 cents per share for those shareholders not subject to local dividends tax. The companys tax reference
number is 9400087715.
The salient dates for the final dividend are as follows:
Last day to trade cum dividend Friday, 12 July 2013
Shares trade ex-dividend Monday, 15 July 2013
Record date Friday, 19 July 2013
Payment date Monday, 22 July 2013
Share certificates may not be dematerialised or materialised between Monday, 15 July 2013 and Friday, 19 July 2013,
both dates inclusive.
NJ Crosse RB Humphris NKH Fitz-Gibbon
Chairman Group managing director Group finance director
Bryanston
20 June 2013
The preparation of the Groups summary consolidated audited results was supervised by NKH Fitz-Gibbon, B Com, CA(SA).
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
*Executive directors
Registered office: 1st 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, Rennies House, 19 Ameshoff Street,
Braamfontein
Sponsor: One Capital (Pty) Ltd, 17 Fricker Road, Illovo 2196, 25 June 2013
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