The group has seen a strong demand for its products and services across its mining and agriculture businesses.
Omnia Holdings has delivered strong financial and operational performance for the half-year ended 30 September, reporting a revenue growth of more than 30 percent, supported by strong volume growth and increased commodity prices.
“I am particularly pleased with the revenue growth, operating cost containment, focused management of net working capital and resultant strength of our balance sheet,” says CFO Stephan Serfontein.
He adds that Omnia’s teams have also achieved a further reduction in net working capital and have actively managed operating costs, resulting in better operating margins. “Our people have displayed resilience and discipline in making sure that we were a reliable supplier and that we provided a safe working environment through trying times.”
Stephan boasts that these results were achieved in the face of a very challenging macro environment globally, supply chain disruptions and the ongoing devastating impact of Covid-19.
He explains that, in Omnia’s mining and agriculture businesses there was a strong demand for its products and services. “We ensured reliable supply by leveraging our plants, which service both divisions. This, intertwined with supply chain and manufacturing capability, lifted the profitability.”
The good agricultural season and commodity prices also contributed partially to Omnia’s success, Stephan says, adding that the prudent management of input that was required due to supply chain constraints resulted in additional trade sales from its manufacturing facility.
The group’s mining business reported strong volume growth in its South African and international operations. “Mining RSA’s volume growth was a result of the completion of the onboarding of a major customer, as well as an increase in ammonia prices.”
Omnia’s Protea Chemicals business, on the other hand, reported disappointing results and Stephan believes that it can do significantly better. “We have appointed a new managing director and we are confident that the team is focused on a strategy which will position the business for operating profit and operating margin growth.”
He adds that the operating margins in Omnia’s mining business are also below targeted ranges and that the group fully supports the newly appointed management team to achieve the required margins by year end.
Stephan explains that the group’s strong cash position will further strengthen once it concludes the divestment of Umongo.
He adds that disciplined capital allocation is extremely important to Omnia and will continue to be a major focus area. The group plans to grow its international agriculture and BME businesses and evaluate other potential acquisitions selectively. “It is an exciting time as we face many opportunities, but with optionality, discipline is required.”
Omnia has a global footprint, but is firmly entrenched and committed to the South African and SADC markets. However, Stephan explains that its global capabilities, such as its international agriculture business, will be important to position Omnia as leaders in the AgriBio space in future.
“Equally, our innovative technology in mining will enable long-term partnerships and growth in selected markets such as Indonesia and Canada,” he concludes.