Omnia's diversified offer protects profitability
- Published: Tuesday, 29 November 2005 13:00
Omnia, the diversified, specialist chemical services company providing customised solutions in the chemicals, mining and agriculture markets, today announced results for the six months ended 30 September 2005.
• Balanced profile of business interests protects profitability
• Revenue up 3% to R2.0 billion
• Headline earnings down 28% to R 54 million
• Headline earnings per share down 33% to 123.8 cents per share
• Interim dividend of 60 cents per share declared
Group results are reported in accordance with IFRS. An adjustment to the remaining useful life of assets, as well as share based payments, are the main aspects impacting on the Group in converting from GAAP to IFRS.
Commenting on the results, Omnia MD, Rod Humphris said:
“Despite challenging conditions in the fertilizer market over the last six months, I believe that we are well placed to continue delivering to both our shareholders and customers for the full year. Our strategy of building a diverse portfolio of businesses to create growth options in the chemicals environment, both locally and internationally, has again been validated by the Group’s performance. This ability to mitigate potential negative impacts and ensure growth bodes well for the sustainable delivery of shareholder value into the future.
“We are therefore pleased to report increased revenue growth, primarily as a result of the strong performance in our Mining division which reported a 28% growth in revenue. Although buffered by the improved performance in the Mining division, we were disappointed to see headline earnings decrease for the period as a result of lower fertilizer sales and reduced polymer margins. These conditions are likely to be temporary in nature.”
Looking Forward, Humphris said:
“The conditions for the Chemicals business remain positive for the remainder of the financial year. Demand for chemicals will be driven by expected improvements in the manufacturing sector of the South African economy while the continuing high oil price will drive price increases on the downstream petrochemical products and their derivatives. International chemical prices are also increasing in line with the improvement in the global economic environment.
The excess polymer stocks have been reduced considerably but the adverse polymer trading conditions are expected to continue for some time with local competitive pressures persisting.
In the Mining business, continued buoyant mineral commodity prices are expected to result in a similar trend to that achieved in the period under review, with further growth prospects coming from new projects in Africa.
While the Group’s Agriculture operations face a depressed climate due to the current maize surplus, the need for fertilizers is a long term reality. The South African fertilizer market will recover and will be complemented by continued sales to other African countries. The trend towards speciality fertilizer sales and services within Omnia continues.
“Although we expect a reduction in earnings for the full year, the Group is well positioned, and remains focused on diversifying the Group’s risk profile and pursuing new growth opportunities, both nationally and internationally, ” concluded Humphris.
For more information contact: Omnia (011) 709 8850
Rod Humphris, MD
Delwin Eggers, FD