Increases in prices lift Omnia revenue to record

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br bme Supplied Volume growth in Omnia's mining chemicals businesses, including BME Mining, helped deliver record revenue. Photo: Supplied

Johannesburg - Price increases across all divisions of the Omnia Group, coupled with volume increases in the agriculture and mining divisions, saw this provider of specialised chemical products produce record revenue of R16.3 billion in the year to March.

Omnia’s brands include Protea Chemicals, BME Mining and Nutriology.

The group’s operations extend into broader Africa, Australasia and Brazil. Its customised chemical solutions are sold in the mining, agriculture and chemicals markets.

Revenue rose 21 percent, and earnings before interest, tax, depreciation and amortisation were 21 percent higher at R1.9bn. The company also posted record operating profit of R1.416bn and record profit for the year of R992 million.

After adjusting for a one-off incentive plan expense, profit jumped 20.2 percent from last year to R1.05bn while operating profit increased by 22.3 percent to R1.5bn. The one-off item was an abnormally high long-term incentive plan expense of R200m relating to business written off over a five-year period.

Because Omnia does not charge write-off expenses every year in its balance sheet but only in the fifth year, as per the company’s five-year plan, the company had to account for the write-down of value of stock in its fertiliser business five years ago.

As this was the fifth year of the company’s five-year plan, the group’s managing director, Rod Humphris, said next year the long-term incentive plan expense should be considerably lower. At normal levels, it stands at about R75m – as was the case last year.

“The abnormal long-term incentive plan also had an effect on [operating] margin. On normal levels we won’t have that problem [of margin decline],” Humphris said.

The mining and chemicals divisions improved their operating profit, while the agriculture division was on par with last year’s level.

Omnia recorded volume growth in mining businesses BME Mining and Protea Mining Chemicals, while the average sales price increased by 11.9 percent. The chemicals division also had higher unit selling prices. The price increases were mainly due to rand weakness.

Humphris said some of the rand movement this year had not yet been reflected in the firm’s financials and therefore the effect would still be seen in the next set of results.

He added that after reporting record figures this year, the company was more determined to drive more efficiencies, look for more business and grow its volumes and turnover in new markets.

After posting basic earnings a share of R14.96 and diluted headline earnings a share of R12.83, the company declared a final gross cash dividend of R2.90 a share.

Together with an interim dividend of R1.85, shareholders received a total dividend of R4.75 for the 2014 financial year, compared with R4.20 last year.

The Omnia share price fell 2.24 percent to close at R223.15 on the JSE yesterday.


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