Voluntary market update for the six months ended 30 September 2023
- Published: Tuesday, 07 November 2023 07:36
Omnia is in the process of finalising its financial results for the six months ended 30 September 2023 ("HY2024"). The results are anticipated to be released on or about Monday, 20 November 2023.
The global economic landscape has been characterised by ongoing weak economic growth, high inflation, disruptions in supply chains, volatility in commodity prices and currency exchange rates. The South African economy has seen subdued consumer and business confidence, particularly within the manufacturing sector. In addition, the underperformance of local utilities and deteriorating infrastructure resulted in disruptions in the transportation of raw materials and production inputs. These issues have had an impact on the Group's operations, most notably, the Chemicals segment.
Omnia operates in primary sectors and continues to make a profound impact on the markets it operates in. Notwithstanding the abovementioned macroeconomic challenges, the Group has leveraged its agile integrated manufacturing and supply chain capabilities to support its customer base by ensuring uninterrupted supply. The Agriculture segment was impacted by lower revenue due to the change the in commodity cycle whilst the Mining segment continued to grow locally and internationally. The Group delivered a resilient operational performance with strong sales volumes, market share growth and robust margins. Solid progress was made in the Group's international expansion efforts, in particular the Mining segment which contributed to profit ahead of expectations. A focus on costs, prudent capital expenditure and stringent working capital management enabled the Group to maintain a robust financial position with a positive net cash balance of approximately R1.6 billion. Omnia continues to maintain a strong balance sheet which allows it to retain optionality in line with its disciplined capital allocation framework. During the period, the Group continued to improve its safety and sustainability performance.
Discontinuation of the use of the additional earnings measures
Effective 1 April 2023, the functional currency of Omnia Zimbabwe was changed from ZWL to USD, which is the currency that most faithfully represents the economic effects of the underlying transactions, events, and conditions of the entity. This change removes the requirement to apply IAS 29 Financial Reporting in Hyperinflationary Economies, therefore obviating the necessity of presenting adjusted earnings measures, as the Zimbabwe operations will no longer have a disproportionate and volatile accounting impact. The use of the adjusted earnings measures will therefore be discontinued from our 2025 financial reporting period.
Headline earnings per share ("HEPS"), earnings per share ("EPS"), adjusted HEPS and adjusted EPS from continuing operations for HY2024 are expected to vary from the financial results for the six months ended 30 September 2022 ("HY2023") as set out below:
- HEPS from continuing operations is expected to decrease by between 12% and 2% from HEPS of 295 cents for HY2023, to HEPS of between 260 cents and 289 cents for HY2024; and
- EPS from continuing operations is expected to decrease by between 14% and 4%, from EPS of 304 cents for HY2023, to EPS of between 261 cents and 292 cents for HY2024.
Shareholders are advised that the adjusted earnings measures, introduced in HY2023 relating to the effects of hyperinflation in Zimbabwe and included below, will no longer be applicable in the subsequent comparative period.
- Adjusted HEPS from continuing operations is expected to decrease by between 35% and 25%, from adjusted HEPS of 401 cents for HY2023, to adjusted HEPS of between 261 cents and 301 cents for HY2024; and
- Adjusted EPS from continuing operations is expected to decrease by between 35% and 25%, from adjusted EPS of 410 cents for HY2023, to adjusted EPS of between 267 cents and 308 cents for HY2024.
Omnia expects to deliver a resilient set of financial results reflecting the underlying strength of its diversified business model and the ongoing successful execution of its strategy in a complex and challenging macroeconomic environment. The Group remains well positioned to deliver growth and value over the long term.
The information provided in this voluntary market update has not been reviewed or reported on by Omnia's external auditors.
7 November 2023