The company was dragged to court in 2014 by JSE-listed chemicals, mining and agriculture group Omnia for setting the domestic phosphoric acid price at a level “higher than the international price”.
Omnia said: “This practice took place despite a Competition Tribunal order aimed at preventing this practice by Foskor and resulted in Omnia embarking on extensive litigation to rectify the situation.”
Foskor, which generated a profit of R5.9billion last year, is the sole producer of phosphoric acid in the region and has sole access to the import/export terminal at Richards Bay in northern KwaZulu-Natal.
The high court ruled in favour of Omnia in October 2015 by enforcing the Competition Tribunal order. Unperturbed, Foskor lodged an appeal in March 2016 that resulted in the high court judgment being suspended. On Monday, the full bench of the high court in Pretoria dismissed Foskor’s appeal against Omnia with costs.
Omnia said the appeal’s dismissal was the third time that Foskor had failed to convince the courts of the merits of its case. The company said it would be pursuing the matter through the courts to ensure that the high court judgment “is upheld and that Foskor’s pricing is in accordance with the judgment”.
It lamented the fact that the effect of the Foskor pricing practice resulted in “overcharges” by Foskor for the supply of phosphoric acid to Omnia. Omnia said it had claimed a “substantial refund from Foskor for such amounts”, and that shareholders would be updated should the matter continue through any further legal processes.
Foskor, a South African company founded in 1951, saw its earnings before interest and tax increase 29percent to R296million in the last financial year, while earnings before interest, taxes, depreciation, and amortisation, rose 148percent to R54m. In its results presentation for the financial year 2017, Omnia, which has operations across Africa, South America, Australia, China, New Zealand, and Indonesia, among other countries, showed a downward trend, with revenue decreasing 3percent to R16.3bn, operating profit down 6percent to R1040m, and profit before tax decreased 8percent to R856m.
Omnia’s headline earnings per share declined 7percent to 881cents per share, and cash generated from operations decreased to R1.3billion, against 2016’s R2.3bn, and the company declared an ungeared balance sheet of R90m.
It said that it acquired Umongo Petroleum, a leading distributor of additives, base oils and other related petroleum, oil and lubricant products in South Africa and sub-Saharan Africa.
- BUSINESS REPORT