Umongo purchase boosts Omnia revenue

JOHANENSBURG – Omnia Holdings yesterday said that the acquisition of Umongo Petroleum has boosted its revenue in the year to end-March by contributing R354million.

The group said its revenue increased 7percent to R17.37billion during the period, and without the Umongo contribution revenue would have increased only by 4.6percent. Omnia acquired a 90percent stake in Umongo Petroleum for R780m last year.

The company said the purchase was with the group for only four months of the reporting period.

Chief executive Adriaan de Lange said the group was involved in significant corporate activity during the financial year. “We acquired LDR Precision Technical Field Services for R12m, now part of a newly established entity called Axioteq that forms part of Agriculture RSA. We also purchased 90percent in Umongo Petroleum that forms part of Chemicals RSA for R780m, with a net cash impact of R566m,” De Lange said.

The group acquired Oro Agri group for $100m (R1.35bn) post the reporting period and said this would form part of the financial results in financial year 2019. “The Oro Agri acquisition will boost our agriculture business going forward,” he said.

Omnia said its revenue increased as a result of a stronger performance from the mining and chemicals divisions. However, revenue from the agriculture division was marginally down due to the continued impact of the drought in some parts of southern Africa and a stronger rand throughout the year.

Omnia also reported an 11percent increase in operating profit to R1.16bn, with the agriculture division increasing 63percent in operating profit to R711m, driven by strong growth in the international businesses, production efficiencies, commodity and foreign currency hedging gains and a good recovery in agriculture.

Final dividend

The group’s profit rose 12percent to R664m, while headline earnings per share increased by 12 percent to 991 cents a share. The board approved a final dividend of 150c, resulting in a total dividend for the year of 350c.

“We are pleased with the results with profit up by 12percent to R664m under challenging trading conditions. Despite headwinds in various parts of the business, the performance in the agriculture division was encouraging, while the chemicals division was flat overall, despite the weak South African economy. The mining division was lower, based on margin pressures and a substantial provision for a potential bad debt in Angola. The group generally benefited from its international expansion strategy, while margins in the country remained under pressure,” De Lange said.

The mining division’s profit of R387m was down 15percent year-on-year, including the R64m bad debt provision.

The chemicals division’s operating profit was 2percent higher at R146m and the South African business contracted in line with the local manufacturing sector.

Omnia said it had R2.54bn net debt at the end of the year, excluding the Oro Agri deal, which closed post year-end. The net debt:equity gearing ratio at year end was 34percent.

Omnia rose 1.12percent on the JSE yesterday to close at R130.48.

– BUSINESS REPORT