Omnia Holdings’ key mining and South African agriculture segments boosted the group’s performance in the six months to September 30 with operating profit up by 17% to R802 million.
Revenue also increased by 5% to R10.9 billion, while headline earnings per share rose by 2% to 288 cents. The cash position was robust at R812m.
“The sustained robust growth of the mining segment and strong volumes in South Africa contributed substantially to the overall group result,” said CEO Seelan Gobalsamy.
He said in an interview that the mining segment’s global growth would remain the key growth vector for the group, potentially leading to a re-rating of the share price and share value.
The second-half outlook for the agricultural segment appeared promising in South Africa, as well as for expansions into Australia and South America.
However, the outlook was more cautious in the SADC region due to drought conditions and the need for stable regulatory and political environments.
The integrated operating model, featuring agile manufacturing and supply chain capabilities, yielded positive results. This facilitated higher sales volumes and helped balance demand and supply across segments, enhancing margins while ensuring security of supply to customers.
Planned maintenance shut downs were successfully completed, and the Sasolburg manufacturing complex was set to handle greater production demand, with further infrastructure upgrades already in progress.
International expansion and growth would be supported by the strength of the balance sheet, but the group would operate within its capital allocation framework, said Gobalsamy.
Construction of an additional ammonium nitrate storage facility in Sasolburg would double storage capacity. The expansion of road and rail transport capacity, along with a new client, resulted in this additional nitrate storage capacity.
In the mining segment, contract extensions and organic growth in the SADC, as well as new contracts in Namibia, had enhanced volumes. In Indonesia, three new contracts were secured.
In Canada, Bulk Mining Explosives (BME) commissioned its non-electronic detonator manufacturing facility, with the electric detonator production line expected to be commissioned later in the 2025 financial year.
BME, in partnership with Hypex Bio, planned to launch a first-of-its-kind nitrate-free explosive in the Canadian market.
In Australia, BME had begun building its largest Mobile Manufacturing Units (MMUs). Additionally, cold commissioning of Western Australia’s first electronic detonator plant had commenced.
The AgriBio business secured a new customer offtake agreement in China, which will accelerate expansion, while pipeline projects with wholesalers in the Middle East and the US were advancing well. In the US, investments are being made to strengthen distribution capabilities.
The agriculture segment delivered a resilient performance despite a challenging operating environment marked by infrastructure and supply chain constraints, as well as severe drought conditions in the SADC region.
Revenue fell by 4% to R5.1bn as lower selling prices offset higher volumes, while operating profit increased by 27% to R422m.
The mining segment saw revenue increase by 15% to R4.7bn, while operating profit grew by 18% to R535m. In the SADC region, volumes increased due to higher iron ore and platinum output, new contract wins, and strong contributions from Zambia and Namibia.
The chemicals segment faced challenges in the South African market due to difficult macroeconomic conditions and a subdued manufacturing sector.
Increased competition had led to margin pressures. Operating profit was negatively affected by restructuring costs. Tough conditions for the segment are expected to persist.
BUSINESS REPORT