Omnia Holdings Limited (Omnia), a JSE-listed diversified chemicals group, published its interim results for the six months ended 30 September 2020. The group delivered a resilient performance in an exceptionally challenging and uncertain operating environment. This reflected the benefits of continued execution against its strategic objectives.
Throughout the COVID-19 pandemic, Omnia continued its delivery of essential services, including primary chemicals and solutions for the agriculture, mining, manufacturing, and fuel sectors. These sectors play an essential role in food security, economic stability, and the livelihoods of people globally.
Omnia’s CEO, Seelan Gobalsamy, commented: “In line with our turnaround plan, we delivered a resilient performance in a challenging operating environment, both locally and internationally. These results demonstrate the ability of our leadership and management teams to act swiftly and decisively to continue delivering on commitments.”
Group revenue from continuing operations for the period remained stable at R8,2 billion and operating profit increased by 25% to R341 million. Omnia’s earnings before interest, tax, depreciation, and amortisation from continuing operations, excluding impairments, increased by 11% to R742 million. Headline earnings per share from continuing operations came in at R1,41, up from R0,43, which represents an increase of 228%.
As at the end of September 2020, Omnia’s nett debt decreased by R1,4 billion and stood at R1,9 billion. This excludes R77 million from the agriculture biological division, compared to R3,3 billion in the prior period. A consistent increase in cash generated from operations to the value of R768 million underpinned this improvement. Nett working capital reduced by a further R900 million from R4,6 billion in the prior period to R3,7 billion. This excludes R332 million relating to the agriculture biological division.
Sustainable business practices
“Our concerted efforts to entrench sustainable business practices returned an improved safety performance and empowerment rating as well as reduced greenhouse gas emissions and hazardous waste volumes. Omnia will continue to implement responsible strategies to ensure meaningful and sustainable value creation for all stakeholders,” added Gobalsamy.
Omnia’s carbon footprint remained a priority in the period. The replacement of the EnviNOx catalyst resulted in a two-thirds reduction of carbon dioxide emissions equivalent to 150 000 tons for the period March to September 2020.
The nitrophosphate facility in South Africa reached an instantaneous capacity of above 82% following successful modifications. The production for offtake from the mining division increased in line with new business being secured. In agriculture our product deliveries are mounting ahead of the start of a promising planting season, supported by favourable agronomic conditions compared to previous years.
Disposal of Oro Agri
In October, Omnia announced its intention to dispose of Oro Agri to Rovensa, a European-headquartered operation. The sale, which remains subject to approval by Omnia’s shareholders in December, will generate aggregate cash proceeds of approximately US$146,9 million, thereby de-risking the group’s balance sheet.
Commenting on the proposed Oro Agri disposal, Gobalsamy said: “The board undertook a comprehensive review of Oro Agri as part of the group’s broader strategy and accepted Rovensa’s attractive offer, subject to shareholder approval. We believe that Oro Agri’s risk profile, the attractive price offered by Rovensa and the opportunity to de-risk our capital structure, outweigh Oro Agri’s long-term potential, which would require significant investment to realise.”
Oro Agri is disclosed as the agriculture biological division in the interim results and it is accounted for as a discontinued operation. – Press release, Omnia