Omnia Holdings reported that its diluted headline earnings per share rose from 527c for the six months to September last year to 592.8c for the same period this year.
Omnia expects another good year, particularly in the agricultural sector where plantings have been good. Image: Omnia
An interim dividend of 185c per share was declared, 23.3% more than last year.
Revenue rose by 25.7% to R7.5bn‚ profit for the period grew 16.8% to R424m and operating profit grew 15% to R628m.
The group said the macro environment was positive for the mining division and mixed for the agriculture and chemicals divisions. The selling prices for all divisions benefited from the weaker rand.
"However‚ economic activity in the South African manufacturing sector remained muted‚ which affected the chemicals division," said Rod Humphris, Omnia's managing director. He said the first-half results were impressive‚ with strong earnings growth‚ strong profit and solid returns to shareholders amid mixed trading conditions.
Management remains strongly focussed
"The positive financial results achieved by the group‚ which celebrated its 60th anniversary this year‚ reflect the ongoing execution of our business model and the continued attention to working capital management and capital expenditure‚ while maintaining our strong balance sheet.
"The robust demand for mining and agricultural commodities‚ the positive impact of the weaker rand‚ strong growth in mining volumes and improved commodity prices resulted in the company doing well‚" he said.
Looking ahead‚ Humphris said the mining division expected a small increase in volumes in the second half compared with the first half as well as the continued benefit of the weaker rand. The agriculture division was expected to have favourable planting conditions in most of the region as agricultural produce prices were expected to remain high.
"Margins will continue to be negatively affected by the unfavourable urea:ammonia ratio," he added.
He said that ammonia was the key feedstock used to produce nitrogen fertilizer‚ whereas the sales price of nitrogen fertilizer was determined by the urea price. When this ratio deviated from its long-term historical relationship‚ gross margins were squeezed‚ he said.
"Our chemicals division is expecting to continue the improved first-half performance in the second half but is not likely to achieve the operating margin target of between 4.5% and 5.5%‚" he said.
"Our focus continues to be on increasing volumes and sales while containing costs. Long-term opportunities for the group in the mining‚ water‚ food and renewable energy sectors remain attractive and Omnia is well positioned to focus on these areas‚" Humphris added.
