- Profit after tax scaled up 620% to R252m
- The Chemicals division net revenue was hard hit by the lockdowns
- Concerns around hyperinflation and liquidity constraints remain in Zimbabwe
HARARE – South Africa-headquartered chemical manufacturing group, Omnia Holdings emerged on top amid the biting global coronavirus pandemic with an impressive earnings performance during the six-month period ended 30 September 2020.
Omnia Holdings Limited is a holding company for a group of companies which produces and supplies fertilizer to the agricultural industry, explosives to the mining industry and industrial chemical products. The Group’s operations are located in South Africa, Ghana, Kenya, Mauritius, Tanzania, Zimbabwe and Zambia.
The Group posted a stable revenue performance during the period under review at R8.2 billion, just slightly below R8.3 billion recorded in the same period last year.
Despite the impact of COVID-19 and general economic and sector challenges, Group operating profit from continuing operations increased by 25% to R341 million from R273 million while the Group generated a net profit after tax of R252 million for the period under review from R35 million.
Commenting on the results, CEO Seelan Gobalsamy said, “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 in order to continue delivering on commitments made to our customers, shareholders and other stakeholders.”
He also said that over the past 18 months, Omnia set out to execute on a deliberate strategy to firstly, stabilise the statement of financial position and secondly, to fix and renew the Group’s operations, while exploring new growth opportunities. This strategy has yielded, and continues to yield, good results that have put Omnia in a much healthier financial position.
The Agriculture division experienced COVID-19 restrictions which varied from country to country, but generally those had minimal impact as the agriculture sector was classified an essential service in most countries.
The Group highlighted that concerns around hyperinflation and liquidity constraints remain in Zimbabwe, while sovereign risk appears to have increased in Zambia coupled with concerns around liquidity. Elsewhere, performance in Australia and Brazil exceeded expectations due to an increased demand in humates while in the SADC region, supply disruptions were initially experienced for cross-border loads during the early lockdown stages but eased shortly thereafter.
The Mining division delivered mixed results. In particular, the stringent COVID-19 lockdown restrictions imposed in South Africa at the end of March 2020 resulted in most mines going into care and maintenance, affecting the division’s local performance.
The Chemicals division net revenue was hard hit by the lockdowns, but operating profit for the segment increased to R109 million from R91 million recorded in same period last year.
Net debt reduced to R1 940 million, excluding R77 million relating to the Agriculture Biological division (HY2020: R3 292 million) as a result of a consistent increase in cash generated in line with the successful execution of management’s turnaround plan.
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