Omnia Holdings (OMN), the diversified speciality chemicals provider, on Tuesday reported diluted headline earnings per share of 346.1 cents for the six months ended September 2011 from 340.5 cents a year ago.
Revenue from continuing operations was up 16% to R4.95 billion on the back of volume and international commodity price increases, partially offset by rand strength, in the Mining and Agriculture divisions.
Gross profit increased 19% to R1.037 billion and improved to 20.9% of revenue from 20.5% in 2010. Profit for the period grew 38% to R230 million.
In the light of the better than expected cash flow, the strong balance sheet and the good progress made on the new Nitric Acid Complex, the Board declared an interim dividend of 100 cents per share.
The company said the macro environment for the period was positive for its Mining and Agriculture divisions and difficult for the Chemical division.
Improved commodity prices and increased demand benefited the Mining and Agriculture divisions, but difficult conditions persisted in the Chemical division as volumes declined further on the back of a continued reduction in the output of the SA manufacturing sector.
Earnings per share increased by 2% to 346.8 cents per share based on a weighted average 66.32 million shares in issue, a 37% increase over the prior period. The increase in the number of shares in issue arose from the rights issue that was concluded in September 2010 to raise capital for the construction of the new Nitric Acid Complex which is expected to be commissioned in the first quarter of 2012.
“The increase in EPS is commendable because the benefits of the Nitric Acid Complex have not yet commenced whereas the number of shares issued to raise requisite capital have been taken into account in the calculation of EPS,” it said.
Looking ahead, the group said the macro environment for the second half is promising and the weaker rand will positively impact all its divisions although the weakening has come too late to have a significant impact on the Agriculture division as most customer orders had been placed before September.
The Chemical division is expecting to maintain the improved operating profit performance in the second half even though volumes are not expected to show any meaningful increase. The Mining division is expected to continue to benefit from the buoyant global demand for mining commodities and the recommissioned megamite plant.
The Agriculture division anticipates favourable conditions as maize plantings are expected to increase substantially given that the maize surplus inventory has been exported, grain prices are high and agronomic conditions are good. The recent sharp drop in global carbon credit (CER) prices will most likely result in negligible CER revenue for the year, despite having two years of CERs available for sale, it said. - I-Net Bridge