Omnia profits drop amid economic pressures
South African diversified chemicals maker Omnia Holdings announced a drop in full-year profit of 7% in a results presentation on Tuesday, as difficult trading conditions took their toll on the company’s mining and chemicals divisions.
Headline earnings per share fell to 881 cents for the year ended March 31 from 944 cents in the previous period and profit after tax was down 8% to R592 million. Omnia had R90 million of net cash at year-end and no debt.
Group revenue fell to R16,3 billion, with mining income dropping 4% to R4,4 billion as mine closures in South Africa impacted volumes and business was lost in Botswana and Namibia. Agriculture revenue was stagnant at R8,2 billion despite record sales volumes for speciality fertilisers both locally and internationally.
"The slowdown in global economic activity remains a key driver for the demand of the various commodities and therefore, the inability for a sustained increase in prices for Omnia's products to materialise in the short to medium term," said Rod Humphris, who stepped down from being Group MD to chairman at the start of June.
Humphris said Omnia would look beyond South Africa and consider acquisitions to boost its chemicals division, which operates throughout South Africa, as well as Southern and East Africa.
"We primarily are interested in African markets and it's an area we have basically under-penetrated from a chemicals perspective. We are certainly looking for more acquisitions. We have not yet exhausted the capacity of our balance sheet. We are looking at anything that will strengthen our existing business as for example, Umongo does for our chemicals business," he said.
Omnia acquired a 90% stake in unlisted Umongo Petroleum for R780 million as part of its strategy to expand its chemical business.
Omnia, which has its roots in the fertiliser and agricultural industry, has an in-depth understanding not only of its core markets here in South Africa, but also in the fundamental industries of mining and agriculture in Africa. Based in Johannesburg, South Africa and with operations in 15 African countries and six international countries, Omnia has more than six decades of experience in business. Additionally, Omnia continues to grow its global footprint, with business units in Australasia, Brazil and Mauritius and clients in other regions such as Europe, South America and South East Asia.
Omnia CFO Wayne Koonin (pictured) scooped the Finance & Technology Award at the CFO Awards 2017 in May and has taken the lead in managing the company's acquisition strategy and ERP overhaul.