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• Operating profit from continuing operations rose to R1.2 bn (FY20: R744m)
• Headline earnings per share from continuing operations of 391 cents (FY20: 154 cents)
• Cash generated from operations of R2.3 bn (FY20: R2.2 bn)
• Sale of Oro Agri completed during the year with proceeds used to settle the debt
• Cash increased by R3.1 bn to R1.8 bn (FY20: interest-bearing borrowings of R1.3 bn)
• Shareholder distribution of R1bn
• Ordinary dividend resumed at 200 cents per ordinary share
• Special dividend declared at 400 cents per ordinary share
• Improved environmental, safety and transformation performance

Omnia Holdings Limited (“Omnia”), a JSE-listed diversified chemicals Group, today announced a strong performance for the 2021 financial year despite the impact of COVID-19 and general economic and sector challenges.

Throughout the pandemic, Omnia continued its delivery of essential services, including primary chemicals and solutions for the agriculture, mining, manufacturing and fuel sectors which play an essential role in food security, economic stability and the livelihoods of people globally.

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.”

In October 2020, Omnia entered into an agreement with European Crops Products 2 S.A.R.L (ECP), a European-headquartered business, to dispose of Oro Agri for consideration of USD146.9 million. The effective date of the sale is 7 January 2021. Oro Agri has been reported as ‘Agriculture Biological’ and
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 (EBITDA) from continuing operations, excluding impairments increased 24% to R2.1 billion, while headline earnings per share (HEPS) from continuing operations rose to 391 cents, up from 154 cents, an increase of 154%. The consistent delivery against clear strategic objectives resulted in improved cash generation of R2.3 billion from the underlying businesses which, 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.

“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 (RCR) of 0.35 compared to 0.49 in the prior period. Omnia’s carbon footprints remained a priority in the period with prior investment into world-class nitrogen oxide abatement technology (EnviNOx) resulting in reduced carbon dioxide emissions.

Total greenhouse gas emissions reduced to 261 500 tonnes of CO2 equivalent, 58% less than they were in the comparative period.
Energy efficiency and water use efficiency improved by 9% and 8% respectively, despite an increase in production volume of 15%. Having achieved supplier recognition of 125% as well as full scores for Ownership, Enterprise & Supplier Development and Socio-Economic Development, Omnia’s B-BBEE rating improved to Level 2.

“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.

A total shareholder distribution of R1 billion which comprises of the resumption of an ordinary dividend of 200 cents per ordinary share along with a special dividend of 400 cents per ordinary share has been declared. The Board is carefully considering further capital allocation decisions that are value-accretive, provide the right diversification that is complementary to Omnia’s core businesses and skill set and strengthen the Group’s overall positioning.

Speaking on the outlook for the year ahead, Gobalsamy concluded: “Agriculture and mining fundamentals are encouraging and while market challenges and COVID-19 risks remain, each of our divisions are focused on driving their respective strategies, realising efficiencies and leveraging their trusted market positions to take advantage of growth opportunities .”

SEGMENTAL REVIEW

Agriculture

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% to R565 million (FY2020: R291 million).

The division experienced improved demand due to positive agronomic conditions, while disciplined cost control, production efficiencies and enhanced operational performance of the nitrophosphate plant, contributed to improved profitability.

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 as well as higher export sales brought forward due to COVID-19-related supply concerns. In Zambia, contractual volumes for the summer planting season were secured and collections were well advanced by year-end.

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 stemming from higher levels of South African demand for speciality and liquid fertilizers and the potential to grow the use of these products elsewhere in Africa.
Internationally, the focus will be placed on expanding the biostimulant footprint globally via strategic partnerships in mature markets and additional growth will be achieved through multiple exclusive distribution options.

Mining

Omnia services the mining industry through Mining RSA, Mining International and Protea Mining Chemicals (PMC). Net revenue was stable at R5.2 billion while operating profit decreased by 19% to R287 million.

In South Africa, the division’s performance was affected by lower mining production due to December shutdowns, mine closures as a result of COVID-19 and extreme wet weather in certain regions. Cost containment measures were a major management focus in response to these market challenges. Mining RSA ensured new volume growth by securing a significant multi-year contract with transitioning well-progressed and nearing finalisation by year-end. Internationally, the business gained good traction in recently entered markets. The joint venture in Canada, was awarded new contracts and transitioned underground trial equipment. In Indonesia, a bulk emulsion plant was commissioned and reported a stable customer offtake.

PMC was impacted by lower demand for chemicals as a consequence of electricity supply disruptions and COVID-19-related cross-border challenges. The end of life of a large contract resulted in margin pressure. Notwithstanding these difficulties, PMC’s extensive supply chain capabilities ensured that every customer order was fulfilled, and no supply disruptions took place over the year. In the fourth quarter, the division performed extremely well in Africa and began to show signs of improvement in South Africa.

PMC became the first in its field to develop a solvent extraction solution that aids copper producers to maximise throughput, optimising metal quality and thereby significantly boosting mine profitability.

Looking ahead, higher commodity prices bode well for increased spend on exploration and production. After having demonstrated security of supply throughout the pandemic, the mining division expects to capitalise on prospects in the year ahead. Opportunities include anticipated growth
in Canada, Indonesia, West and South Africa, the imminent launch of the latest AXXISTM Titanium electronic detonator, PMC’s unique solvent extraction solution and greater customer focus on ESG.

The packaging of the mining division’s digital innovation and technological expertise under one brand “Blast Alliance”, will further emphasise its reputation for being a collaborative partner as companies heighten their focus on cost reduction and look to technology to drive growth, productivity and greater efficiencies. This strives to counter the impact of structurally lower mining production and extremely competitive explosives supply in the SADC region as well as financial difficulties and political change affecting numerous other African markets.

Chemicals

The Chemicals division includes Protea Chemicals and Umongo Petroleum. Net revenue decreased by 14% to R4.3 billion while operating profit increased by 21% to R209 million. The division experienced an improvement in sales towards the latter part of the year as customer demand gradually recovered from the earlier lockdown measures implemented.

Regular adjustments to the supply chain and repositioning of the product range enabled the business and its customers to succeed. Losses were offset by improved margins and active cost management.

Umongo Petroleum’s performance benefited from delivery against its portfolio and market diversification strategy. The company secured new business during the first half of the financial year, taking advantage of market supply challenges and a global shortage of base oils which countered the loss of revenue, and along with reduced operating expenses, supported margin uplift.

Chemicals markets in both South Africa and SADC are expected to remain constrained with industrial recovery being inconsistent across sectors while supply disruptions are anticipated to continue. Protea Chemicals will respond to these market challenges by making strategic product mix changes, focusing supply on growing end markets (environmentally friendly chemistries, potable water treatment, agriculture and certain life sciences). The business will also look to leverage its core capability of reliably sourcing products globally that consistently exceed customer requirements.

In the year ahead, Umongo Petroleum will continue to drive its diversification strategy by focusing on delivering a winning value proposition to customers, increasing its market share in core markets and
expanding into new markets, particularly in sub-Saharan Africa.

Read the results report here: