Muted manufacturing sector impacts Omnia - CNBC Africa

Muted manufacturing sector impacts Omnia

Earnings

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Omnia provides products and services in mining, chemicals and agricultural sectors. PHOTO: Getty Images

Revenue for the year ended 31 March 2014 grew 21 per cent to 16.3 billion rand from 13.4 billion rand in the previous comparative year.

This was on the back of volume and sales price increases in the mining and agriculture divisions, and price increases in the chemicals division.

(WATCH VIDEO: Omnia revenue climbs up 25 per cent)

Operating profit also grew to 1.4 million rand for the period under review from 1.2 million rand in 2013.

“The macro environment for this year was good for our mining and agriculture divisions and difficult for our chemicals division,” Omnia said in a statement.

“Despite low interest rates and a weaker rand exchange rate, economic activity levels in the South African manufacturing sector remained muted which was not supportive of our chemicals division, as its primary customer base is drawn from the South African manufacturing sector.”

[DATA OMN:Omnia Holdings Limited] is a South Africa-headquartered firm specialising in the provision of specialised chemical products and services in the mining, agriculture and chemicals sectors.

Profit for year was up 12.7 per cent, and at an all-time record of 992 million rand from 888 million in 2013. The operating margin however declined to 8.7 per cent from prior year’s 9.2 per cent.

Profit before tax increased to 1.3 million rand from 1.1 million rand in 2013, and profit after tax increased by 12.7 per cent from 880 million rand in the previous comparative period to 992 million rand.

(READ MORE: Omnia results in the green)

Rod Humphris, CEO of Omnia, noted that “the year ended with a pleasingly strong balance sheet - net debt of 335 million rand and a net debt to equity ratio of 5.7 per cent - given the substantial growth experienced in and the high level of capital expenditure over the last few years.”

Revenue for Omnia’s mining division increased 24.6 per cent to 5.4 million rand from 4.3 million rand in 2013 on the back of volume growth of 12.7 per cent and an average sales price increase of 11.9 per cent. Price increases were also due to the weaker rand.

Revenue for agriculture also grew to 23.7 per cent to 6.6 million rand for the period under review from 5.3 million rand in 2013.

Overall gross profit percentage weakened due to unfavourable ammonia to urea ratio and production problems on the granulation plants in the first half of the year.

Revenue for Omnia’s chemicals segment increased to 4.1 million rand from 3.6 million rand in 2013. A gross cash dividend of 290 cents, from 270 cents in 2013, was declared.

“The macro environment for next year appears positive and will be strongly influenced by the direction of the Rand. Interest rates are expected to increase by no more than 50 basis points while inflation is expected to move a little outside the 6 per cent limit set by the South African Reserve Bank, though probably only for a short period,” said Omnia. 

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