Omnia Holdings delivered a resilient operational performance with strong sales volumes, market share growth and robust margins in spite of many headwinds locally and offshore.
Nevertheless, headline earnings per share (Heps) from continuing operations is expected to fall by between 12% and 2% to between 260 cents and 289c, the group said yesterday in a trading update for the six months to September 30.
Solid progress was made in international expansion, in particular the Mining segment which contributed to profit ahead of expectations, the chemicals group said.
But weak economic growth, high inflation, supply chain disruptions, and volatile commodity prices and exchange rates were negatives in global markets, while low business confidence, a weak economy and crumbling infrastructure impacted operations in South Africa.
“A focus on costs, prudent capital expenditure and stringent working capital management enabled the group to maintain a robust financial position with a positive net cash balance of about R1.6 billion,” Omnia’s directors said in a statement.
Integrated manufacturing and supply chain capabilities helped the group overcome challenges.
Revenue fell in the Agriculture segment due to a change in the commodity cycle. The Mining segment grew locally and internationally.
The functional currency of Omnia Zimbabwe was changed from Zimbabwean dollars to US dollars from April 1, 2023, which removed a requirement to apply hyperinflationary accounting for that country.
Earnings per share from continuing operations was expected to decrease by between 14% and 4%, to between 261c and 292c.
Adjusted Heps from continuing operations was expected to decrease by between 35% and 25% to between 261c and 301c.
The group said the interim results, expected to be released on November 20, would be “resilient” and reflective of the “underlying strength of its diversified business model and the ongoing successful execution of its strategy in a complex and challenging macroeconomic environment”.
Its directors said the group remained well positioned to deliver growth and value over the long term.
The share price fell 2.24% to R57.28 yesterday afternoon, a price that was also 20.5% down over a year.