Diversified chemicals group Omnia Holdings says it delivered a strong and resilient set of results, with improved earnings, in a challenging and volatile operating environment for the financial year ended March 31. 

In South Africa, headwinds included infrastructure challenges, energy supply challenges owing to loadshedding, and some political unrest. From a global perspective, the Russia-Ukraine situation impacted on agriculture prices; while extreme weather conditions were experienced in Australia as well as South Africa, affecting operations. 

Despite this, Omnia achieved revenue, operating profit and earnings before interest, taxes, depreciation and amortisation (Ebitda) growth, generated strong cash flow, managed its net working capital to plan and maintained a resilient financial position. 

“We were steadfast in the execution of our strategy and ensuring security of supply for our customers, which saw us deliver a solid financial performance, while our investments in initiatives aligned to our sustainability commitments enhanced safety, and reduced our environmental footprint.

“Our focus on leveraging our competitive advantage in our integrated manufacturing and supply chain capability was key to our overall performance. We are proud of the progress our teams have made and the milestones achieved despite a challenging macroeconomic environment,” says CEO Seelan Gobalsamy.

On a continuing operations basis, group revenue for the period increased by 24% to R26.6-billion and operating profit increased by 19% to R1.9-billion.

Ebitda improved by 10% to R2.6-billion and headline earnings a share increased by 10% to 742c.

Working capital increased by R905-million to R4.2-billion, mainly owing to higher receivables from later sales in Agriculture Southern African Development Community (SADC), and elevated levels of inventory for Mining International in West Africa, where the group’s focus was on security of supply.

This, together with an ongoing focus on cost management and disciplined capital allocation, ensured a robust financial position and a positive net cash balance of R1.8-billion, Omnia highlights.

“We have also made good progress in our international expansion efforts. Enhancing distribution capacity in Brazil and a shift in sales mix towards higher-margin speciality products has led to growth in our AgriBio business. We are engaging with potential distributors in the US and are at an advanced stage of registering certain products in the European Union,” Gobalsamy informs.

Omnia’s Mining segment is said to be well advanced in mobilising its first surface mining contract in Canada. The group says it is confident that the penetration of the new generation AXXIS system, along with new business, will support robust growth in the region.

In Indonesia, a joint venture partnership with PT Multi Nitrotama Kimia (MNK) was concluded.

This will allow Omnia to introduce its AXXIS systems and double salt emulsion technology to the Southeast Asia market.

In Australia, an active organic growth strategy is being pursued. Good progress has been made on infrastructure build, which will further enable future partnerships, Omnia notes.

For safety, the group-wide recordable case rate (RCR) decreased to 0.16, while both the Mining and Chemicals segments achieved a zero RCR for the period.

Omnia emphasises that it is committed to lowering the environmental impact of its operations. As such, the group invested in a reverse osmosis water treatment plant and a solar energy plant at its operations in Sasolburg, in South Africa, which it says contributed to improvements in its environmental, social and governance targets.

The reverse osmosis plant treats cooling water to produce potable water used in the manufacturing process, resulting in a potential saving of about 180 megalitres of potable water yearly.

The first phase of the Sasolburg solar energy plant generates 5 MW of electricity at peak performance, while another 5 MW of capacity is underway. Together with the ability to generate electricity from excess process steam at the nitric acid plants, the site's own energy generation will likely average between 35% and 50% of its yearly electricity requirement.

In addition, the changes to the EnviNox emission abatement system in Sasolburg resulted in a 44% reduction in the group’s carbon emissions.

Solar energy projects are also underway in Losberg, and Dryden in South Africa, and offshore in Zimbabwe and Australia.

In Losberg and Dryden, each site is already generating 250 kW of solar electricity, while the facility in Zimbabwe is still under construction. The solar project in Morwell, Australia, has been successfully completed.

Looking ahead, the group’s focus is on implementing optimisation initiatives, improving efficiencies and enhancing liquidity management to maintain a robust and flexible financial position as it extracts further value from its core in the SADC region, and continues to expand its international footprint in both the AgriBio and specialist mining explosives businesses.

“Taking into consideration the outlook for the operations and commodity prices, sustaining capital requirements, returns to shareholders, and growth opportunities, the board has approved a final ordinary dividend of 375c a share, or R634-million.

“In addition, we are seeking shareholder approval for a general share repurchase programme,” says Gobalsamy.