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Unaudited Results For The Six Months Ended 30 September 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”)
Unaudited results for the six months ended 30 September 2013
- Revenue up 25.7% to R7.5 billion
- Profit for the period up 16.8% to R424 million
- Operating margin down from 9.1% to 8.4%
- Earnings per share up 16.7% to 637.0 cents per share
- Debt:equity ratio improves from 42.5% to 35.7%
- Dividend up 23.3% to 185 cents per share
Condensed consolidated income statement
for the six months ended 30 September 2013
Restated* Restated*
Unaudited Unaudited Audited
6 months 6 months 12 months
Rm 30/09/2013 % 30/09/2012 31/03/2013
Revenue 7 499 26 5 967 13 432
Cost of sales (5 912) 27 (4 659) (10 360)
Gross profit 1 587 21 1 308 3 072
Other operating income 43 (39) 70 67
Administrative expenses (336) 20 (280) (744)
Distribution expenses (640) 20 (535) (1 137)
Other operating expenses (26) 44 (18) (27)
Operating profit 628 15 545 1 231
Finance cost (70) 67 (42) (117)
Finance income 14 56 9 35
Share of profits/(losses) of associates and joint ventures 2 (1) (1)
Profit before taxation 574 12 511 1 148
Income tax expense (150) (148) (268)
Profit for the period 424 17 363 880
Attributable to:
Owners of Omnia Holdings Limited 425 17 363 883
Non-controlling interest (1) - (3)
424 17 363 880
Earnings per share from profit attributable to owners
of Omnia Holdings Limited during the period
Basic earnings per share (cents) 637.0 17 546.3 1 332.1
Diluted earnings per share (cents) 594.2 13 527.0 1 250.4
* 2013 earnings have been restated for the change in accounting policy relating to the adoption of IFRS 11. The
accounting treatment for our joint venture, Acol, changed from proportionate consolidation to equity accounting.
This restatement has not been audited and does not have a material impact on the Group.
Condensed consolidated statement of comprehensive income
for the six months ended 30 September 2013
Unaudited Unaudited Audited
6 months 6 months 12 months
Rm 30/09/2013 30/09/2012 31/03/2013
Profit for the period 424 363 880
Other comprehensive income, net of tax
Currency translation difference 158 103 248
Total comprehensive income for the period 582 466 1 128
Attributable to:
Owners of Omnia Holdings Limited 583 466 1 131
Non-controlling interest (1) - (3)
582 466 1 128
Condensed consolidated cash flow statement
for the six months ended 30 September 2013
Restated* Restated*
Unaudited Unaudited Audited
6 months 6 months 12 months
Rm 30/09/2013 30/09/2012 31/03/2013
Operating profit 628 545 1 231
Depreciation and amortisation 153 125 272
Adjustment for non-cash items 39 (4) 33
Cash generated from operations 820 666 1 536
Utilised by working capital (1 432) (1 247) (172)
Interest paid (70) (42) (117)
Interest received 14 9 35
Taxation paid (152) (51) (207)
Net cash outflow from operating activities (820) (665) 1 075
Cash outflow from investing activities (352) (309) (653)
Cash outflow from financing activities (187) (180) (315)
Net (decrease)/increase in cash (1 359) (1 154) 107
Net cash at beginning of the period (321) (428) (428)
Effects of exchange rate movements 2 - -
Net cash and cash equivalents (1 678) (1 582) (321)
Condensed consolidated statement of changes in equity
for the six months ended 30 September 2013
Attributable to the owners of
Omnia Holdings Limited
Non-
Stated Treasury Other Retained controlling
Rm capital shares reserves earnings interest Total
At 31 March 2012 (audited) 1 289 (15) 133 2 620 1 4 028
Recognised income and expense for the period
Profit for the period 363 - 363
Currency translation difference 103 103
Transactions with shareholders
Ordinary dividends paid (121) (121)
Treasury shares sold 3 3
Share-based payment - value of service provided 5 5
At 30 September 2012 (unaudited) 1 289 (12) 241 2 862 1 4 381
Total recognised income and expense for the period
Profit for the period 520 (3) 517
Currency translation difference 145 145
Transactions with shareholders
Ordinary dividends paid (99) (99)
Treasury shares sold 5 5
Share-based payment - value of services provided 3 3
Share appreciation rights exercised (2) 2 -
At 31 March 2013 (audited) 1 289 (9) 389 3 285 (2) 4 952
Total recognised income and expense for the period
Profit for the period 425 (1) 424
Currency translation difference 158 158
Transactions with shareholders
Ordinary dividends paid (182) (182)
Treasury shares sold 2 2
Share-based payment - value of services provided 5 5
At 30 September 2013 (unaudited) 1 289 (7) 552 3 528 (3) 5 359
Segmental analysis
for the six months ended 30 September 2013
Restated* Restated*
Unaudited Unaudited Audited
6 months 6 months 12 months
Rm 30/09/2013 % 30/09/2012 31/03/2013
Revenue, net of intersegmental sales 7 499 26 5 967 13 432
Mining 2 750 37 2 007 4 379
Agriculture 2 701 24 2 181 5 399
Chemicals 2 048 15 1 779 3 654
Operating profit 628 15 545 1 231
Mining 453 35 335 735
Agriculture 122 (35) 187 443
Chemicals 53 130 23 53
Other reserves
as at 30 September 2013
Unaudited Unaudited Audited
6 months 6 months 12 months
Rm 30/09/2013 30/09/2012 31/03/2013
Share-based payment reserve 118 110 113
Foreign currency translation reserve 431 128 273
Net discount arising on acquisition of
shares of subsidiaries 3 3 3
552 241 389
Reconciliation of headline earnings
for the six months ended 30 September 2013
Unaudited Unaudited Audited
6 months 6 months 12 months
Rm 30/09/2013 30/09/2012 31/03/2013
Net profit for the period 425 363 883
Adjusted for profit on disposal
of fixed assets (2) - (1)
Headline earnings 423 363 882
Headline earnings per share
Headline earnings per share (cents) 635.5 546.3 1 130.6
Diluted headline earnings per share (cents) 592.8 527.0 1 249.0
Condensed consolidated balance sheet
as at 30 September 2013
Restated* Restated*
Unaudited Unaudited Audited
6 months 6 months 12 months
Rm 30/09/2013 30/09/2012 31/03/2013
ASSETS
Non-current assets 3 928 3 485 3 714
Property, plant and equipment 3 314 2 896 3 098
Intangible assets 512 517 516
Available-for-sale financial assets 23 19 21
Investments in associates and joint ventures 77 52 76
Deferred income tax assets 2 1 3
Current assets 7 005 5 872 5 306
Inventories 3 835 3 026 2 892
Trade and other receivables 2 992 2 740 2 144
Cash and cash equivalents 178 106 270
Total assets 10 933 9 357 9 020
EQUITY AND LIABILITIES
Capital and reserves attributable to the
owners of Omnia Holdings Limited 5 362 4 380 4 954
Stated capital 1 289 1 289 1 289
Treasury shares (7) (12) (9)
Other reserves 552 241 389
Retained earnings 3 528 2 862 3 285
Non-controlling interest in equity (3) 1 (2)
Total equity 5 359 4 381 4 952
Liabilities
Non-current liabilities 479 433 406
Deferred income tax liabilities 294 250 293
Debt 185 183 113
Current liabilities 5 095 4 543 3 662
Trade and other payables 3 134 2 630 2 883
Debt 51 98 130
Current income tax liabilities 54 127 58
Bank overdrafts 1 856 1 688 591
Total liabilities 5 574 4 976 4 068
Total equity and liabilities 10 933 9 357 9 020
Net debt 1 914 1 863 564
Net asset value per share (rand) 80.5 65.8 74.4
Capital expenditure
Depreciation 135 110 242
Amortisation 18 15 30
Incurred 355 309 646
Authorised and committed 274 182 53
Authorised but not contracted for 288 183 234
Notes
Basis of preparation
This interim report has been prepared in accordance with the framework concepts and the measurement and recognition
requirements of International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council,
presentation and disclosures as required by IAS 34 Interim Financial Reporting, the JSE Listings Requirements and the
requirements of the Companies Act of South Africa. The preparation of this interim report was supervised by the Group Finance
Director, NKH Fitz-Gibbon CA(SA).
The financial statements have been prepared using accounting policies that comply with IFRS and which are consistent
with those applied in the preparation of the financial statements for the year ended 31 March 2013, with the exception of
the adoption of IFRS 11 Joint Arrangements, which has resulted in changes in accounting policies effective for the
year commencing 1 April 2013 and has been applied retrospectively in line with the transitional requirements.
There has been no consequential impact or change to total comprehensive income, or shareholders’ funds of the Group in
respect of these interim results.
The interim results have not been audited.
Additional information
for the six months ended 30 September 2013
Unaudited Unaudited Audited
6 months 6 months 12 months
30/09/2013 30/09/2012 31/03/2013
Weighted average number of shares in issue (‘000) 66 559 66 448 66 288
Weighted average number of diluted shares in issue (‘000) 71 359 68 885 70 615
Number of shares in issue excluding treasury shares (‘000) 66 588 66 480 66 543
COMMENTARY
Introduction
Omnia is a diversified provider of specialised chemical products and services used in the mining, agricultural and
chemical sectors. The Group differentiates itself from commodity chemical providers by adding value at every stage of the
supply and service chain through technological innovation and by deploying our intellectual capital. The business model
is made sustainable by targeted backward integration through installing technologically-advanced plants to manufacture
core materials such as nitric acid and explosives emulsions. Besides securing sources of supply, this enables us to
improve operational efficiencies throughout the product development and production chain.
Omnia provides customised, knowledge-based solutions through our Mining, Agricultural and Chemicals divisions. The
Group’s proven business model makes us a market leader in chemical services. The Group prospers through offering
extraordinary value to our customers by tailoring our solutions to their business needs through product and service innovation
and expert application of these.
Omnia celebrates its 60th birthday and has built an excellent understanding of not only its core markets here in South
Africa but also in the fundamental industries of mining and agriculture in Africa.
Macro environment
The macro environment for this period was positive for our Mining division, and mixed for our Agriculture and
Chemicals division. Global economic performance was varied, with moderate growth in emerging economies and a steady recovery in
the USA economy being offset by subdued conditions in the Eurozone economies. The net impact was continued good demand
for mining commodities, lower international mining commodity prices, stable international agricultural commodity prices
and fairly flat international prices for chemical products. A significant decrease was seen in the international ammonia
and urea prices and the unfavourable urea to ammonia ratio continued although at a slightly improved ratio compared to
the prior year. The rand was weaker against the US dollar which positively impacted all our divisions’ selling prices.
Economic activity levels in the South African manufacturing sector remained muted which hindered our Chemicals division,
as its primary customer base is drawn from the South African manufacturing sector.
Financial review
Group revenue rose 25.7% to R7 499 million (2012: R5 967 million) on the back of strong volume growth in the Mining
division and good sales price increases in all divisions.
Gross profit increased 21.3% to R1 587 million (2012: R1 308 million) and the gross profit percentage was slightly
lower at 21.2% of revenue (2012: 21.9%) due to lower gross margins in the Mining and Agriculture divisions, Chemicals
division’s margins being on par with the previous year.
Other operating income of R43 million (2012: R70 million) included an insurance claim receipt of R9 million
(2012: R21 million).
Administration overheads increased by 20.0% to R336 million (2012: R280 million). Included in administration expenses
are share-based payment and long-term incentive scheme charges of R49 million (2012: R10 million). Taking these into
account, administration costs were well controlled. Distribution overheads increased by 19.6% to R640 million (2012: R535
million), primarily due to higher volumes in the Mining and Agriculture divisions. Other operating expenses comprise
foreign exchange loss of R8 million (2012: R3 million) and amortisation of intangible assets of R18 million
(2012: R15 million).
Operating profit increased 15.2% to R628 million (2012: R545 million), on the back of the improved operating profit of
our Mining and Chemicals divisions, offset by a reduction in the operating profit of the Agriculture division. The
operating margin reduced from 9.1% to 8.4%. The Mining division maintained its operating margin at 16.5% (2012: 16.7%). The
Agriculture division’s operating margin reduced to 4.5% (2012: 8.6%) due to reduced gross margins caused by the
unfavourable urea to ammonia ratio and under recovery of production plant overheads. The Chemicals division’s operating margin
improved to 2.6% (2012: 1.3%) due to higher rand margins on the back of higher rand sales prices whilst overhead costs
were contained at the prior year level.
Net finance expense increased from R33 million to R56 million due to much higher monthly levels of net working capital
compared to the prior period which was caused by rand weakness. Finance expense was also impacted by the higher cost of
financing the Zambia operations in kwacha borrowings following the Zambia Government directive that all local trading
had to be in kwachas and that local trading in US dollars was no longer permitted.
Income tax expense increased to R150 million (2012: R148 million), incurring an effective tax rate of 26.1%
(2012: 29.0%).
Profit for the period increased by 16.8% from R363 million to R424 million.
Total assets increased by 16.8% from R9 357 million to R10 933 million due to higher levels of inventories,
receivables and capital expenditure.
Property, plant and equipment increased by R418 million to R3 314 million mainly as a result of capital expenditure
spend of R632 million on various projects, of which R291 million was spent in the second half of FY2013 and R341 million
in the current period. The major items of capital expenditure in the current period were on the expansion at BME
production sites and customer sites, the new chlorine packing plant and additional ammonia rail tankers.
Inventory increased by R809 million from R3 026 million to R3 835 million, primarily due to an increase of R626
million in the Agriculture division’s inventory as a result of higher physical stock levels and raised unit costs caused by
rand weakness. Trade and other receivables remain well controlled increasing only 9.2% from R2 740 million to R2 992
million, well below the 25.7% rise in revenue.
Equity increased by 22.3% from R4 381 million to R5 359 million as a result of retained earnings of R945 million, an
increase of R303 million in foreign currency translation reserve, offset by R281 million dividend payments.
Cash utilised by operating activities of R820 million was in line with the R665 million utilised by operations in the
prior year taking into account the increase in revenue. Cash outflow from investing activities of R352 million (2012:
R309 million) is due primarily to capital expenditure as described above. After taking into account the cash outflow from
finance activities of R187 million (2012: R180 million), which included a dividend payment of R182 million (2012: R121
million), there was a net cash outflow of R1 359 million (2012: R1 154 million).
The period ended with net debt of R1 914 million (2012: R1 863 million) and an improved net debt:equity ratio of 35.7%
(2012: 42.5%).
Divisional review
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 37.0% to R2 750 million (2012: R2 007 million) on the back of strong volume growth especially
outside of South Africa and higher sales prices on the back of the weaker rand. Revenue was negatively impacted by strikes at
BME’s mining customers and at its Losberg site. Gross margins reduced due to price reductions passed to Protea Mining
Chemicals’ customers but with well controlled overhead costs, operating profit increased 35.2% to R453 million (2012: R335
million) and the operating margin at 16.5% was in line with the 16.7% for the prior period.
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 division’s range of specialised products and services are coordinated through its pioneering
Nutriology® offering, which incorporates leading edge research and development of new products and services to assist customers
to optimise crop yield and quality for maximised returns. The Omnia Nutriology® brand is highly regarded in the regional
market and its core concept of value-added service is being increasingly recognised.
Revenue increased 23.8% to R2 701 million (2012: R2 181 million) on the back of higher volumes and higher fertilizer
sales prices. The increase in volume was entirely due to the lower margin new wholesale business that was started at the
beginning of 2013 and this business contributed R276 million of the R520 million increase in revenue. Volumes in the
traditional Agriculture division were a little behind that of the prior period. Operating profit reduced by 34.8% to R122
million (2012: R187 million), due to lower gross margins caused by the unfavourable urea to ammonia ratio, a R38 million
under recovery of production plant overheads and the effect of the volumes of the lower margin new wholesale business.
The under recovery of production plant overheads was caused by unexpected start-up problems experienced in the Sasolburg
granulation plants following the annual maintenance shut down in April 2013. These plants are now running well and a
part recovery of the R38 million is expected in the second half. Overhead costs included were well controlled and in line
with the increase in revenue.
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 world’s leading chemical producers.
Revenue increased by 15.1% to R2 048 million (2012: R1 779 million) on the back of increased selling prices as a
result of the weaker rand, whilst volumes were on a par with the prior period. The gross margin percentage was at the same
level as the prior period and with overheads being well controlled and on par with the previous year, the operating profit
increased by 130.4% to R53 million (2012: R23 million). The operating margin at 2.6% was double the 1.3% of the prior
period.
Prospects
The macro environment for the second half is positive but will be strongly influenced by the summer planting season.
Our Mining division anticipates a small increase over first half volumes in the second half and the continued benefit
of the weaker rand. Our Agriculture division anticipates favourable planting conditions in most of the region as
agriculture produce prices are expected to remain at high levels. Margins will continue to be negatively affected by the
unfavourable urea to ammonia ratio. Ammonia is the key feedstock used to produce nitrogen fertilizer, whereas the sales price
of nitrogen fertilizer is determined by the urea price. When this ratio deviates unfavourably from its long-term
historical relationship, gross margins are squeezed. Our Chemicals division is expecting to continue the improved first half
performance in the second half but is not likely to achieve the operating margin target of 4.5% to 5.5%.
Dividends
The Board has declared an interim gross cash dividend of 185 cents per ordinary share (2012: 150 cents per ordinary
share) payable out of income in respect of the period ended 30 September 2013. The number of ordinary shares in issue at
the date of this declaration is 67 249 825. As the company does not have any STC credits to utilise, the gross dividend
is subject to local dividends tax of 15% for those shareholders to which local dividends tax is applicable. The resultant
net dividend amount is 157.25 cents per share for those shareholders subject to local dividends tax and 185 cents per
share for those shareholders not subject to local dividends tax. The company’s tax reference number is 9400087715.
The salient dates for the interim dividend are as follows:
Last day to trade cum dividend Friday, 10 January 2014
Shares trade ex-dividend Monday, 13 January 2014
Record date Friday, 17 January 2014
Payment date Monday, 20 January 2014
Share certificates may not be dematerialised or materialised between Monday, 13 January 2014 and Friday, 17 January 2014,
both dates inclusive.
NJ Crosse RB Humphris NKH Fitz-Gibbon
Chairman Group Managing Director Group Finance Director
26 November 2013
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, 13 Sloane Street, Epsom Downs, Bryanston, Sandton
PO Box 69888, Bryanston 2021 Telephone: (011) 709 8888
Transfer secretaries: Link Market Services South Africa (Pty) Ltd
13th Floor, Rennie House, 19 Ameshoff Street, Braamfontein
Sponsor: One Capital Advisory (Pty) Ltd, 17 Fricker Road, Illovo 2196
www.omnia.co.za
Date: 26/11/2013 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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