Omnia Holdings Limited delivered strong results for the six months period to 30 September 2024, demonstrating its resilience amidst a challenging macroeconomic backdrop.
The Group’s performance was driven by sustained robust growth in the Mining segment and strong volumes in Agriculture RSA. Revenue increased by 5% to R10.9 billion due to a higher contribution from the Mining segment. The 17% increase in operating profit to R802 million was largely attributable to the Mining segment and Agriculture RSA, which also supported an improvement in operating margins from 6.5% to 7.3%.
Headline earnings per share increased by 2% to 288 cents and earnings per share increased by 2% to 289 cents.
Omnia CEO Seelan Gobalsamy, commented: “These results demonstrate the resilience of our business amidst a challenging macroeconomic environment. The sustained robust growth of the Mining segment and strong volumes in Agriculture South Africa, contributed substantially to the overall Group result. The Mining segment continues to demonstrate significant potential for growth, underpinned by increasing demand for its solutions and expanding opportunities in global markets. Group operating profit increased by 17%, supported by enhanced operational efficiency and improved margins. This performance highlights the success of our diversification strategy and the strength of both the Mining and Agriculture businesses.”
Omnia’s integrated operating model with agile manufacturing and supply chain capabilities, continued to yield positive results, facilitating higher sales volumes and enabling effective balancing of demand and supply across segments to enhance margins, while ensuring security of supply to customers. Planned maintenance shutdowns were safely and successfully completed during the period, positioning the Sasolburg manufacturing complex to handle greater production demand in the second half of FY25, with further infrastructure upgrades already in progress to enhance both reliability to customers and production throughput. Investments in the ammonia value chain have also ensured consistent supply for our customers.
Working capital decreased from R4.1 billion to R4 billion, despite higher inventory levels to support growth and new business in Mining International.
“With a net cash balance of R812million, the Group’s financial position remains resilient. This was achieved through disciplined capital allocation, effective working capital management and solid cash flow generation. The strength of our balance sheet provides us with strategic optionality to support our international expansion and future growth aspirations,” added Gobalsamy.
The growth outlook for the Group remains positive with solid traction gained in the reporting period. The manufacturing and supply chain capability continues to invest in infrastructure that enhances efficiencies and margins across the Group. This includes increased renewable energy generation capacity and enhanced supply through rail and road. The construction of an additional ammonium nitrate storage in Sasolburg will double storage capacity, further increasing supply chain flexibility and enabling consistent supply to customers.
The Mining segment increased its momentum in its expansion efforts. Contract extensions and organic growth in SADC as well as new contracts in Namibia, enhanced volumes in this core market.
In Indonesia three new contracts were successfully secured, signalling further growth in the region. While, in Canada, BME commissioned its non-electronic detonator manufacturing facility and the electric detonator manufacturing production line is due to be commissioned in Q4 FY25. In FY26, BME in partnership with Hypex Bio, is set to launch a first of its kind nitrate free explosives to the Canadian market.
In Australia, BME has commenced the building of its largest Mobile Manufacturing Units (MMU) with the first of these units expected to arrive towards the end of FY25. Additionally, cold commissioning of Western Australia’s first electronic detonator plant has begun with production anticipated in Q4 FY25.
The AgriBio business secured a new customer offtake agreement in China, which will accelerate expansion while pipeline projects with wholesalers in the Middle East and USA are advancing well. The USA is in mobilisation phase with investments being made to strengthen distribution capabilities in this large lucrative market, which offers potential to increase volumes substantially over time.
Omnia’s commitment to ensuring a safe work environment and the strength of its safety management practices led to an improvement in the Group’s Recordable Case Rate (RCR) from 0.11 to 0.09. The Mining and Chemicals segments maintained a world-class RCR of zero. Reinforcing a culture of safety remains a priority focus area, with continued emphasis placed on risk management, near-miss reporting and proactive enhancements to safety practices.
The Group advanced its environmental stewardship, recording improved energy use efficiency and consistent water use efficiency, while renewable energy use increased and carbon emissions decreased. An additional 5MW of renewable energy capacity is being constructed at Sasolburg to take the peak installed capacity to 15MW, which will increase the proportion of renewable energy used in operations up to 50% of electricity consumption.
“Omnia’s purpose is deeply rooted in creating sustainable impact for our planet and communities. The Group’s commitment to ESG and safety is not just a strategic priority but a guiding principle that drives the way we operate. The progress we have made thus far reflects the hard work and dedication of our people, and sets a firm foundation for generating long-term value and growth for all stakeholders” concluded Gobalsamy.
Omnia remains optimistic about its growth prospects and ability to deliver value for stakeholders. The Group’s positive outlook is underpinned by its resilient financial position, safe and reliable operations, and favourable long-term fundamentals in the mining and agriculture sectors.
Segmental Review
Agriculture
The Agriculture segment delivered a resilient performance despite a challenging operating environment, marked by infrastructure and supply chain constraints, as well as severe drought conditions in the SADC region. Revenue for the period was down 4% at R5.1 billion as lower selling prices offset higher volumes, while operating profit increased by 27% to R422 million. In South Africa, favourable weather and agronomic factors combined with enhanced marketing efforts, supported higher volumes although selling prices were lower.
Broader African markets, especially Zambia and Zimbabwe, faced constrained demand due to severe drought conditions and were challenged by regulatory and competitive pressures. However, some volume recovery was achieved through market channel diversification.’
Internationally, the strategy to continue to invest in growing the distribution footprint in the USA and Brazil is gaining traction with distribution partners. Volumes in Australia increased from strong exports due to the recovery of two key customers following disruptions in the prior period, robust domestic demand, new contract gains, and expansion into markets in Europe and Southeast Asia. Volumes in Brazil were hampered by one of the most severe droughts the country has witnessed.
The manufacturing and supply chain capability supported higher sales volumes and enhanced margins across the Group .The segment is optimistic about improved agronomic conditions but remains cautious about macroeconomic and regulatory challenges in the rest of Africa. Strategic initiatives will focus on leveraging the Nutriology® model, optimising product mix and achieving operational efficiencies. Operating model changes in the African markets are being implemented. Volume growth, cost savings, efficiencies and cash management are expected to drive the second half performance. Higher demand is anticipated in South Africa and relatively higher AgriBio volumes are expected to contribute to overall growth.
Mining
The Mining segment continued to demonstrate strong growth and robust performance. This growth was achieved through a combination of new and extended contracts, increased ammonia derivative sales, and new contract wins. Revenue increased by 15% to R4.7 billion while operating profit grew by 18% to R535 million.
The segment effectively navigated global macroeconomic challenges and supply chain constraints to ensure uninterrupted supply to customers.
In the SADC region, volumes increased due to higher iron ore and platinum output, new contract wins, and strong contributions from Zambia and Namibia. West Africa, continued to benefit from positive contributions in the precious metals sector.
In Canada, performance was negatively impacted however in-country presence was enhanced through the commissioning of a non-electric detonator plant. In Indonesia, volumes increased due to heightened demand whilst three new contracts were secured by the MNK joint venture. The organic growth strategy and infrastructure development in Australia is progressing well with the commissioning of the detonator plant underway. BME Metallurgy’s (previously Mining Chemicals) strong performance continues, enhanced by new business growth, particularly in Namibia, and ammonia derivative sales.
Chemicals
The Chemicals segment continued to face significant challenges in the South African market due to difficult macroeconomic conditions and a subdued manufacturing sector. Increased competition led to margin pressures across the product range, while persistent pricing pressure further strained profitability. Operating profit was also negatively affected by restructuring costs, resulting in an operating loss for the period.
We expect tough conditions to persist in the second half of the year. Management remains focused on executing the segment’s turnaround plan to achieve sustainable profitability over the medium term.
