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Omnia Holdings Limited (Omnia) announced its strong performance for the 2021 financial year despite the impact of Covid-19 and general economic and sector challenges.
Omnia’s CEO, Seelan Gobalsamy, commented: “These results reflect a resilient performance achieved through continued delivery against our strategy in a challenging and dynamic environment that required decisive management action and agility. Our proactive approach to managing all our businesses and the Group’s balance sheet has placed Omnia in a strong financial position, allowing us to resume dividends and return over R1 billion to our shareholders.”
Omnia sells Oro Agri
In October 2020, Omnia entered into an agreement with European Crops Products 2 SARL (ECP), a European-headquartered business, to dispose of Oro Agri for a consideration of US$146,9 million. The effective date of the sale is 7 January 2021. Oro Agri has been reported as Agriculture Biological and was accounted for as a discontinued operation.
Group revenue from continuing operations was stable at R17,8 billion while operating profit from continuing operations rose by 61% to R1,2 billion, largely driven by a solid performance from the agriculture division. Omnia’s earnings before interest, tax, depreciation, and amortisation from continuing operations, excluding impairments, increased 24% to R2,1 billion. Meanwhile, headline earnings per share from continuing operations rose to 391 cents, up from 154 cents. This represents an increase of 154%.
The consistent delivery against clear strategic objectives resulted in improved cash generation of R2,3 billion from the underlying businesses. This, together with the proceeds from the disposal of the discontinued operation, supported the ability to extinguish core term debt and contributed to Omnia’s strong financial position. Omnia ended the financial year in a cash position of R1,8 billion.
Sustainable business footprint
“We are committed to creating long term value for stakeholders through sustainable business practices, the pursuit of organic and inorganic growth opportunities, greener technologies and expansion into geographies that align with Omnia’s purpose and enhance the Group’s impact in the world,” added Gobalsamy.
Omnia’s proven safety record allows it to compete effectively in key markets, with the Group achieving a recordable case rate of 0,35 compared to 0,49 in the prior period. Omnia’s carbon footprints remained a priority in the period with prior investment in world-class nitrogen oxide abatement technology (EnviNOx), resulting in reduced carbon dioxide emissions.
Total greenhouse gas emissions reduced to 261 500 tons of CO2 equivalent, 58% less than in the comparative period. Energy efficiency and water use efficiency improved by 9 and 8%, respectively, despite an increase in production volume of 15%. Omnia’s Broad-Based Black Economic Empowerment (B-BBEE) rating improved to level 2 due to achieving supplier recognition of 125% and full scores for ownership, enterprise and supplier development, and socio-economic development.
“I am proud to report that the Group’s positive performance extends beyond financial benefits as demonstrated by the improvement in sustainability metrics, including safety performance, empowerment, water and energy use efficiency, and greenhouse gas emissions,” added Gobalsamy.
Speaking on the outlook for the year ahead, Gobalsamy concluded: “Agriculture and mining fundamentals are encouraging. While market challenges and Covid-19 risks remain, each of our divisions is focused on driving their respective strategies, realising efficiencies and leveraging their trusted market positions to take advantage of growth opportunities.”
Overview of agriculture division
The agriculture division comprises Agriculture RSA, Agriculture International, Agriculture Trading and the discontinued operation (Agriculture Biological: Oro Agri). Net revenue increased by 3% to R8,8 billion, while operating profit increased by 62% to R995 million. Excluding the impact of Zimbabwe and the discontinued operation, the agriculture division’s net revenue increased by 8% to R7,8 billion. Operating profit for the period increased by 94%, from R291 million in the 2020 financial year to R565 million in the 2021 period.
Agriculture RSA experienced strong growth in revenue as sales during the peak of the summer planting season were maximised despite supply chain challenges. The Agriculture International division benefited from higher product demand in Australia and higher export sales brought forward due to Covid-19-related supply concerns.
The outlook for this division is positive, with performance anticipated to benefit from forecasted favourable planting conditions in most of Omnia’s markets supported by the improved financial position of farmers. The increasing importance of soil health and regenerative agriculture in ensuring food security represents an opportunity for Omnia to leverage its expertise in helping growers address these challenges and ensure a better world.
Other attractive growth opportunities stem from higher levels of South African demand for speciality and liquid fertilisers and the potential to grow the use of these products elsewhere in Africa. Internationally, the focus will be on expanding the biostimulant footprint globally via strategic partnerships in mature markets. Furthermore, additional growth will be achieved through multiple exclusive distribution options. – Press release, Omnia