| Tue 29 Nov 2005, 8:30 | | Omnia - Reviewed interim results for the six month |
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Omnia - Reviewed interim results for the six months ended 30 September 2005
OMNIA HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1967/003680/06
JSE code: OMN
ISIN: ZAE000005153
Reviewed interim results for the six months ended 30 September 2005
www.omnia.co.za
Condensed Consolidated Income Statements
Restated Restated
Reviewed Unaudited Audited
6 months 6 months 12 months
R"000 30/9/2005 30/9/2004 31/3/2005
Revenue 2 056 969 3% 1 993 613 4 263 974
Operating profit 113 854 -22% 145 272 371 368
Finance costs
- Interest paid (30 982) -3% (31 944) (65 947)
- Interest received 5 566 3 639 8 213
Fair value loss on (9 242) (9 189) (2 753)
derivative instruments
Net monetary gain 1 713 6 592 17 186
Profit before taxation 80 909 -29% 114 370 328 067
Taxation (26 999) -31% (39 358) (111 439)
Net profit for the 53 910 -28% 75 012 216 628
period
Attributable to:
- Equity holders of 53 777 -28% 75 012 216 211
the Company
- Minority interest 133 417
53 910 -28% 75 012 216 628
Basic and headline 123,8 -33% 183,6 506,4
earnings per share
(cents)
Fully diluted basic 121,4 -33% 180,0 477,2
and headline earnings
per share (cents)
Dividend paid per 78,0 -35% 120,0 120,0
share (cents) in
respect of prior year
Interim dividend per 60,0 60,0
share (cents) declared
in respect of current
year
Weighted average 43 441 6% 40 867 42 699
number of shares in
issue ("000)
Weighted average 44 309 6% 41 677 45 305
number of fully
diluted shares in
issue ("000)
Fully diluted earnings 53 777 -28% 75 012 216 211
(R"000)
Number of shares in 43 467 2% 42 587 43 424
issue
Condensed Consolidated Balance Sheets
Restated Restated
Reviewed Unaudited Audited
6 months 6 months 12 months
R"000 30/9/2005 30/9/2004 31/3/2005
Assets
Property, plant and equipment 640 321 585 375 615 068
Intangible assets 456 648 479 848 475 167
Unlisted investments and loans 60 60
Deferred taxation 2 853 4 017 3 858
Current assets 1 792 744 1 561 829 1 453 680
2 892 566 2 631 129 2 547 833
Equity and liabilities
Shareholders" equity 945 838 822 010 926 227
Deferred taxation 67 162 66 821 84 292
Non-current interest bearing 23 239 162 655 91 883
debt
Current liabilities 1 856 327 1 579 643 1 445 431
2 892 566 2 631 129 2 547 833
Net interest bearing debt 788 354 482 687 372 993
Net asset value per share 21,76 19,30 21,33
(Rand)
Directors" valuation of 60 60
unlisted shares
Capital expenditure
Incurred 42 572 31 977 87 798
Authorised and committed 13 788 11 946 58 560
Authorised but not contracted 44 001 95 186 76 985
for
Condensed Consolidated Cash Flow Statements
Restated Restated
Reviewed Unaudited Audited
6 months 6 months 12 months
R"000 30/9/2005 30/9/2004 31/3/2005
Operating profit 113 854 145 272 371 368
Depreciation and 35 838 32 735 68 925
amortisation
Adjustments for non-cash (6 441) 22 736 11 467
items
Finance costs and taxation (82 317) (144 284) (181 115)
Utilised by working (398 397) (260 291) (294 621)
capital
Utilised by operations (337 463) (203 832) (23 976)
Dividends paid (35 326) (17 971) (44 227)
Cash outflow from (372 789) (221 803) (68 203)
operating activities
Cash outflow from (42 572) (31 977) (85 297)
investing activities
Cash outflow from (138 428) (4 980) (64 818)
financing activities
Net decrease in cash (553 789) (258 760) (218 318)
Net (overdraft)/cash at (196 568) 21 750 21 750
beginning of period
Net overdraft at end of (750 357) (237 010) (196 568)
period
Segmental Analysis
Restated Restated
Reviewed Unaudited Audited
6 months 6 months 12 months
R"000 30/9/2005 30/9/2004 31/3/2005
Revenue, net of 2 056 969 3% 1 993 613 4 263 974
intersegmental
sales
Chemicals 1 053 942 7% 984 624 1 923 612
Mining 405 987 28% 317 965 715 760
Agriculture 597 040 -14% 691 024 1 624 602
Operating profit 113 854 -22% 145 272 371 368
Chemicals 55 667 -14% 64 649 111 762
Mining 57 256 10% 52 244 109 589
Agriculture 931 -97% 28 379 150 017
Statement of Changes in Shareholders" Equity
Non- Share-
based
Stated distributable payment
R"000 capital reserves reserve
At 31 March 2004 - restated 95 290 (16 060) 522
Net profit for the period
Capitalisation award and 35 771
ordinary dividends
Increase in foreign currency 13 789
translation reserve
Share-based payment 2 937
Preference shares converted
into ordinary shares
Ordinary shares issued 41 652
Treasury shares sold 3 986
Preference dividend
At 30 September 2004 - 176 699 (2 271) 3 459
unaudited
Net profit for the period
Decrease in foreign currency (16 997)
translation reserve
Fair value loss on interest (1 305)
rate swap
Share-based payment 3 104
Preference shares issued
Treasury shares sold 1 920
Ordinary dividends
At 31 March 2005 - restated 178 619 (20 573) 6 563
audited
Net profit for the period
Decrease in foreign currency (4 313)
translation reserve
Fair value loss on interest (170)
rate swap
Share-based payment 3 222
Treasury shares sold 2 617
Preference dividend
Ordinary dividends
At 30 September 2005 - 181 236 (25 056) 9 785
reviewed
Retained Minority
R"000 earnings interest Total
At 31 March 2004 - restated 662 985 2 005 744 742
Net profit for the period 75 012 75 012
Capitalisation award and (53 722) (17 951)
ordinary dividends
Increase in foreign currency 13 789
translation reserve
Share-based payment 2 937
Preference shares converted (1 500) (1 500)
into ordinary shares
Ordinary shares issued (40 152) 1 500
Treasury shares sold 3 986
Preference dividend (505) (505)
At 30 September 2004 - 644 123 822 010
unaudited
Net profit for the period 141 199 417 141 616
Decrease in foreign currency (16 997)
translation reserve
Fair value loss on interest (1 305)
rate swap
Share-based payment 3 104
Preference shares issued 1 650 1 650
Treasury shares sold 1 920
Ordinary dividends (25 771) (25 771)
At 31 March 2005 - restated 759 551 2 067 926 227
audited
Net profit for the period 53 777 133 53 910
Decrease in foreign currency (4 313)
translation reserve
Fair value loss on interest (170)
rate swap
Share-based payment 3 222
Treasury shares sold 2 617
Preference dividend (417) (417)
Ordinary dividends (35 238) (35 238)
At 30 September 2005 - 778 090 1 783 945 838
reviewed
Notes
Accounting policies
The condensed financial statements for the six months ended 30 September 2005
were prepared in accordance with IAS 34 - Interim Financial Reporting and in
compliance with the Listing Requirements of the JSE Limited. These are the
Group"s first IFRS condensed interim financial statements for part of the period
for which annual financial statements will be prepared under IFRS. IFRS 1 -
First-time Adoption of International Financial Reporting Standards, has been
applied and for detail of the adjustments, refer to the Transitional Report. The
condensed consolidated interim financial statements do not include all of the
information required by IFRS for full annual financial statements.
The principal policies used in the preparation of the results for the period
ended 30 September 2005 are consistent with those applied for the restated year
ended 31 March 2005 and for the restated results for the six months ended 30
September 2004 in terms of IFRS.
Hyperinflation
The hyperinflation adjustments, as required by the accounting standard IAS 29 -
Financial Reporting in Hyperinflationary Economies, result from the devaluation
in the Zimbabwean Dollar. The most significant adjustment is that which
increased the gross profit for the period by R6,8 million (2004: decrease of
R4,5 million). The net monetary gain of R1,7 million (2004: R6,6 million) for
the period is offset by foreign exchange losses of R3,2 million (2004: R2,9
million) in Zimbabwe. The net impact to the Group, is a net profit of R5,1
million (2004: net gain of R1,9 million).
Dividends
A dividend of 78 cents per share was declared on 20 June 2005 in respect of the
earnings of the previous financial year. This dividend is reflected in the
current period to 30 September 2005.
Security structure
The security structure in terms of which a special purpose vehicle provided
guarantees to the Group"s banking facility providers, was cancelled during the
period under review. In terms of this cancellation, certain secured long and
short term borrowings were replaced with unsecured short term borrowings.
Review opinion
The Group"s auditors, PricewaterhouseCoopers Inc., have reviewed the condensed
consolidated financial information for the six months ended 30 September 2005
contained in this report. The review opinion is available for inspection at the
company"s registered office during normal business hours.
Commitments
The future minimum lease payments under non-cancellable operating leases are
R13,1 million (2004: R16,1 million) within one year and R44,7 million (2004:
R53,3 million) between two and five years and Rnil (2004: Rnil) beyond five
years, giving a total of R57,9 million (2004: R69,4 million).
Goodwill
An annual impairment test on the balance of goodwill has been performed at 30
September 2005. No impairment loss has occurred.
Transition to International Financial Reporting Standards ("IFRS")
Reconciliation of previous SAGAAP and IFRS
IFRS reconciliation of assets, liabilities and equity
Assets
Audited Unaudited Audited
R"000 Note 01/04/2004 30/09/2004 31/03/2005
As previously reported 2 105 843 2 587 116 2 502 892
IFRS adjustments 38 578 44 013 44 941
IFRS 2 - Share-based payments 1
IAS 12 - Income taxes 2 468 4 017 3 858
IAS 16 - Revision of estimated 3 38 110 39 996 41 083
useful lives of property, plant
and equipment
IAS 17 - Leases 4
IAS 38 - Intangible assets 5
Restated under IFRS 2 144 421 2 631 129 2 547 833
Liabilities
Audited Unaudited Audited
R"000 Note 01/04/2004 30/09/2004 31/03/2005
As previously reported 1 388 309 1 793 523 1 605 661
IFRS adjustments 11 370 15 596 15 945
IFRS 2 - Share-based payments 1
IAS 12 - Income taxes 2 468 4 017 3 858
IAS 16 - Revision of estimated 3 10 717 11 283 11 681
useful lives of property, plant
and equipment
IAS 17 - Leases 4 185 296 406
IAS 38 - Intangible assets 5
Restated under IFRS 1 399 679 1 809 119 1 621 606
Equity
Audited Unaudited Audited
R"000 Note 01/04/2004 30/09/2004 31/03/2005
As previously reported 717 534 793 593 897 231
IFRS adjustments 27 208 28 417 28 996
IFRS 2 - Share-based payments 1
IAS 12 - Income taxes 2
IAS 16 - Revision of estimated 3 27 393 28 713 29 402
useful lives of property, plant
and equipment
IAS 17 - Leases 4 (185) (296) (406)
IAS 38 - Intangible assets 5
Restated under IFRS 744 742 822 010 926 227
IFRS income statement impact
Reviewed
30/09/2004 Unaudited Restated
as previously IFRS Unaudited
R"000 reported adjustments 30/09/2004
Revenue 1 989 954 3 659 1 993 613
Operating profit 137 873 7 399* 145 272
Finance costs
- Interest paid (29 205) (2 739) (31 944)
- Interest received 3 639 3 639
Fair value profit/(loss)
on derivative instruments 660 (9 849) (9 189)
Net monetary gain 6 592 - 6 592
Profit before taxation 115 920 (1 550) 114 370
Taxation (39 180) (178) (39 358)
Net profit for the period 76 740 (1 728) 75 012
Attributable to:
- Equity holders of
the Company 76 740 (1 728) 75 012
- Minority interest - - -
76 740 (1 728) 75 012
* IFRS adjustments
Share-based payments (2,937)
Leases (499)
Depreciation 1,886
Fair value 8,949
7,399*
Audited
31/03/2005 Audited Restated
as previously IFRS Audited
R"000 reported adjustments 31/03/2005
Revenue 4 263 974 - 4 263 974
Operating profit 394 333 (22 965)* 371 368
Finance costs
- Interest paid (57 734) (8 213) (65,947)
- Interest received 8 213 8 213
Fair value profit/(loss)
on derivative instruments (21 536) 18 783 (2 753)
Net monetary gain 17 186 - 17 186
Profit before taxation 332 249 (4 182) 328 067
Taxation (111 368) (71) (111 439)
Net profit for the period 220 881 (4 253) 216 628
Attributable to:
- Equity holders of
the Company 220 464 (4 253) 216 211
- Minority interest 417 - 417
220 881 (4 253) 216 628
* IFRS adjustments
Share-based payments (6,041)
Leases (997)
Depreciation 2,856
Fair value (18,783)
(22,965)*
Basis of preparation
The Board acknowledges its responsibility for the preparation of the condensed
consolidated financial statements in accordance with International Financial
Reporting Standards and JSE Limited"s Listing Requirements. The Group"s first
published IFRS results are its interim results for the six months ended 30
September 2005. The Group"s first published full set of financial statements
under IFRS will be for the year ending 31 March 2006.
In order to explain how Omnia"s reported performance and financial position are
impacted by IFRS, the Group has restated information previously published under
SA GAAP to the equivalent basis under IFRS.
Transitional Arrangements
The date of transition to IFRS for the Group is 1 April 2004. The key principle
of IFRS 1 - First-time adoption of International Financial Reporting Standards
is full retrospective application of IFRS. This statement however provides
exemptions from retrospective application in certain instances due to cost and
practical considerations. The Group"s transitional elections are set out below:
- Business combinations: The Group adopted IFRS 3 - Business Combinations,
from 1 April 2004 and therefore no adjustments were required.
- Property, plant and equipment: A first time adopter may elect to use the
fair value of individual property, plant and equipment at transition date
as the deemed cost. The Group is not making use of this transitional
exemption and elects to measure individual items of property, plant and
equipment at original cost.
- Employee benefits: The Group is electing not to apply the exemption to
account for all deferred actuarial gains or losses, including a 10%
tolerance limit for differences in actuarial assumptions, in opening equity
as at 1 April 2004. This exemption is not elected as the Group"s accounting
for employee benefits under previous SA GAAP was already substantially in
compliance with IAS 19 - Employee Benefits.
- Cumulative foreign currency translation adjustments: The cumulative foreign
currency translation reserve existing on transition to IFRS has been
retained and the option to restate the reserve to zero is not elected as
the Group"s accounting for translation adjustments under previous SA GAAP
was already substantially in compliance with IAS 21 - The effects of
changes in foreign exchange rates.
- Share-based payments: The Group is electing not to apply the provisions of
IFRS 2 - Share-based payments to equity-settled awards granted on or before
7 November 2002, or to awards granted after that date but which had vested
prior to 1 January 2005 and has therefore taken the available exemption.
- Compound financial instruments and designation of previously recognised
financial instruments: The Group has not taken advantage of the exemption
that allows comparative information presented in the first year of adoption
of IFRS not to comply with IAS 32 - Financial Instruments: Disclosure and
Presentation, and IAS 39 - Recognition and Measurement.
There are no changes to estimates made under previous SA GAAP for transition to
IFRS. Where estimates have previously been made under SA GAAP, consistent
estimates (after adjustments to reflect any difference in accounting policies)
have been made for the same date.
Adjustments as a result of the Adoption of IFRS
The impact of changing from SA GAAP to IFRS is summarised below. The
quantification of the adjustments is shown in the tables for reconciliation of
assets, liabilities and equity and IFRS income statement impact.
Adjustments implemented with effect from 1 April 2004
Note 1: IFRS 2 - Share-based payments
The Group grants share options to employees under an employee share incentive
scheme. In addition, the third partnership with management scheme was approved
on 30 September 2004. Under SA GAAP, other than costs incurred in administering
the scheme, which were expensed as incurred, the scheme did not result in any
expense in the income statement, but rather a dilution in earnings per share
when the shares were issued. In accordance with the requirements of IFRS 2, the
Group now recognises an expense in the income statement, with a corresponding
credit to equity, representing the fair value of employee share options and
conversion rights granted, recognised over the vesting period of the rights.
Note 2: IAS 12 - Income taxes
IAS 12 requires that deferred tax assets and deferred tax liabilities may only
be offset if levied by the same taxation authority. Therefore the deferred tax
assets of foreign subsidiaries previously set off against deferred tax
liabilities are now classified as deferred tax assets.
Note 3: IAS 16 - Revision of estimated useful lives of property, plant and
equipment
In calculating the depreciation charge, an entity is required to review the
estimated useful lives of property, plant and equipment on an annual basis at
each balance sheet date in terms of IAS 16. This more robust assessment has
resulted in an increase in estimated useful lives of property, plant and
equipment. The depreciation previously recognised in the income statement has
accordingly been reduced.
Note 4: IAS 17 - Leases
IAS 17 requires operating lease cost and income to be accounted for on a
straight-line basis. Future lease increases in terms of a lease contract are
estimated and the average lease expense is then recognised in equal amounts over
the lease period. In general, this leads to earlier recognition of lease income
and lease expense, compared with the pattern of recognition under SA GAAP where
income and expenses were recognised at a constant real rate of return on the net
cash investment in the lease. This generally results in higher lease costs for
previously reported periods with a reduction in the 2004 opening equity and an
increase in the 2005 lease costs.
Further analysis of any interpretations issued by standard setters will take
place in order to process any required adjustments for the full year results
ending 31 March 2006.
Note 5: IAS 38 - Intangible assets
Computer software that was previously classified as property, plant and
equipment is now classified as intangible assets.
Further developments in IFRS reporting
The information has been prepared on the basis of the Group"s expectation of the
standards that will be applicable as at 31 March 2006. IFRS information at year
end may differ from the information contained herein for the following reasons:
- Further standards and interpretations may be issued that are applicable for
2006 reporting or which are applicable to later accounting periods but with
an option to adopt for earlier periods; and
- different practice may develop with regard to interpretation and
application of the standards.
Audit opinion of 2005 restated financial information
The restatement of financial information for the year ended 31 March 2005 has
been audited by the Group"s auditors, PricewaterhouseCoopers Inc. and their
opinion is available for inspection at the Group"s registered office. Their
report includes an emphasis of matter that amendments to the interpretive
guidance issued by the IASB, between the date of this announcement and the
finalisation of the financial statements for the year ending 31 March 2006, may
result in changes to the restatements published.
Commentary
Introduction
Omnia is a diversified, specialist chemical services provider with balanced
interests in chemicals, mining and agriculture markets.
The Group is fundamentally a knowledge business that leverages its leading
intellectual capital and world-class production assets to differentiate its
product and service offerings. Omnia"s unique business model involves creating
extraordinary value for its customers, allowing the Group to charge a premium in
its markets.
Financial review
The Group results are reported in accordance with International Financial
Reporting Standards (IFRS). All comparatives have been restated in compliance
with IFRS. Shareholders are referred to the Transition to International
Financial Reporting Standards statement, which details the reconciliation of the
previous SA Generally Accepted Accounting Practices (GAAP) to IFRS. Adjustments
to the remaining useful life of assets, as well as share-based payments, are the
main aspects impacting on the Group in converting from GAAP to IFRS.
Group revenue increased only marginally, because of lower fertilizer sales, by
3% to R2,1 billion. As expected, fertilizer sales were adversely impacted by the
significant maize stock overhang in South Africa which gave rise to farmers
being reluctant to commit to further maize planting. Furthermore, the summer
rains which herald the onset of the main planting season, have yet to arrive. It
should also be noted that the Agriculture division"s major activities
customarily occur in the second six-month period. That said, the reduction in
fertilizer sales has coincided with a marked increase in raw material prices,
particularly nitrogen products, which increased to record highs in the period
under review, exerting pressure on margins.
The Chemical division"s polymer business experienced a squeeze on operating
margins. This was due to the overstocked position of the plastics industry at
the beginning of the year and the need to reduce these high inventory levels.
The benefits of a more balanced profile of business interests achieved between
the three core businesses of Chemicals, Mining and Agriculture has to a large
extent shielded the Group from the full impact of the low fertilizer sales to
date. Notwithstanding continued focus on costs and operating efficiencies the
operating profit decreased by 22%, to R113,9 million, compared with R145,3
million in the prior period with the operating margin reducing to 5,5% from the
7,3% achieved in the prior comparable period.
Interest paid reduced by 3 % to R31 million (2004: R31,9 million), a direct
result of negotiating lower interest rates.
Headline earnings of R53,9 million (2004: R75 million) decreased by 28%,
reflecting the reduced fertilizer activities and lower polymer margins.
The seasonal nature of Omnia"s agriculture operations causes the Group"s working
capital requirements to peak at or around September each year. The marked
increase in raw material prices in the period under review, coupled with the
fact that the planting season has not yet begun, has seen net interest bearing
debt increase as expected to R788,4 million (2004: R482,7 million).
Cash utilised by operations for the period under review was R337,5 million, an
increase of R133,7 million on the R203,8 million utilised in the comparable
prior period. This increase is mainly attributable to the increase in working
capital, reflecting:
- the increased unit cost of raw materials;
- a higher level of trade receivables, which occurred in the consolidated
Polymer business , and;
- a reduction in creditor levels resulting from the lower level of raw
material purchases.
Operational review
Chemicals
The Protea Chemicals division is a leading speciality, functional and effect
chemicals distributor in Southern Africa. It has a significant presence in every
sector of the chemical distribution market. The Chemical division contributed 49
% to Group operating profit (2004: 44%).
Revenue increased by 7% to R1 053,9 million, compared to the R984,6 million in
the 2004 comparable period.
The Chemical division achieved modest price increases compared with the prior
period but product shortages stunted volume growth potential. In a number of
cases the division experienced difficulties in sourcing product from its
international principals because of increased international demand and also as a
result of supply problems caused by hurricane Katrina.
International polymer prices declined during the first few months of the period
under review and in reducing its high stock levels, operating margins in the
Polymer division decreased to unacceptable levels.
Despite growth in the chemical trading business, the difficulties experienced by
the Group"s polymer operations coupled with pressure on margins caused the
operating profit to decline by 14%, reaching R55,7 million (2004: R64,6
million).
Mining
The Mining division is the market leader in blended bulk explosives formulations
for surface mines, and manufactures packaged explosives for underground mines
and specialised surface blasting. It also supplies mining chemicals as well as
blasting accessories and is currently commercialising a state-of-the-art
electronic detonator system. The Mining division contributed 50% to Group
operating profit in the period (2004: 36%).
The Group"s explosives operations benefited from the continued high levels of
mining activity that prevailed during the period, particularly in coal, copper
and iron ore. This resulted in another period of pleasing growth in bulk
explosives volumes. The international price of ammonia increased further during
the period in line with the rise in oil and energy costs. Although the majority
of the Group"s bulk explosives contracts are linked to the international price
of ammonia, there is a lag before these price increases can be passed on,
resulting in a 2% drop in operating margin from 16% to 14%.
Technical improvements and cost reductions continue to be applied in the
development of the Deltadet electronic detonator which has already seen unit
sales double over the prior comparable period. Full commercialisation of the
next generation of this system is slightly behind schedule, but will begin
within the next year.
The Mining division achieved a 28% growth in revenue to R406 million (2004: R318
million) and a 10% growth in operating profit to R57,3 million (2004: R52,2
million) over the comparable prior period. This was mainly due to the combined
impact of increased bulk explosives volumes and mining service activities. The
division has continued its aggressive cost optimisation programme and sound
working capital management, improvement in productivity and implementation of
operational efficiencies.
Agriculture
The Agriculture division produces and supplies granular, liquid and speciality
fertilizers to individual farmers, co-operatives and wholesalers across Southern
Africa. It supplies speciality fertilizers to farmers in Australia and New
Zealand. Agriculture contributed 0,8% to Group operating profit in the period
(2004: 20%).
Revenue decreased by 14% to R597 million (2004: R691 million) compared with the
same period last year. This decline is mainly due to farming customers not yet
committing to planting maize in the face of the maize surpluses which currently
exist in the country, as well as the continued strength of the rand impacting
negatively on export volumes. As was the case in the previous year the summer
rainfall that heralds the onset of the normal planting season has not yet
materialised.
Aggressive cost management has succeeded in reducing overheads below those of
the comparable prior period. Operating margins in the Agriculture division are
traditionally considerably lower in the first half of the financial year
compared with those in the second half, and due to the lower first half volumes,
coupled with increased raw material costs, the Agriculture division"s operating
margin has reduced to a break-even position.
The Group"s speciality fertilizer operations both in Australia and New Zealand
continue to progress well, in particular the Australian humate business acquired
two years ago.
Prospects
Short term
Conditions for the Chemicals division remain positive for the remainder of the
financial year. Demand for chemicals will be driven by expected improvements in
the manufacturing sector of the South African economy while the continuing high
oil price will drive price increases on the downstream petrochemical products
and their derivatives. International chemical prices are also increasing in line
with the improvement in the global economic environment. The excess polymer
stocks have been reduced considerably but the adverse polymer trading conditions
are expected to continue for some time with local competitive pressures
persisting.
Insofar as the Agriculture division"s short-term prospects are concerned, the
oversupply of maize has led farmers being urged not to plant maize and it would
appear that there is considerable adherence to the plea. As a consequence
domestic fertilizer volumes for the full year are expected to be some 30% to 40%
below normal, negatively impacting on this aspect of Group activities.
The Group therefore expects a reduction in earnings for the year ended March
2006 compared to those achieved in the prior financial year ended March 2005.
Long term
The Group is well positioned, and is being presented with opportunities on a
regular basis, to grow its chemical manufacturing and distribution activities,
both nationally and internationally.
In the Mining division, continued buoyant mineral commodity prices are expected
to result in a similar trend to that achieved in the period under review, with
further growth prospects coming from new projects in Africa.
While the Group"s Agriculture operations face a depressed climate due to the
current maize surplus, the need for fertilizers is a long term reality. The
South African fertilizer market will recover and will be complemented by
continued sales to other African countries. The trend within Omnia towards
speciality fertilizer sales and services continues.
The Group has embarked on an application to utilise the Clean Development
Mechanism created by the Kyoto Accord to reduce greenhouse gas emissions, which,
if successful, may lead to a substantial financial benefit.
Omnia remains focused on diversifying the Group"s risk profile and pursuing new
growth opportunities, while maintaining a firm focus on the Group"s core
competencies.
Dividends
The board is pleased to announce that an interim dividend of 60 cents per share
has been declared in respect of shareholders recorded in the register on Friday
6 January 2006. The last day to trade cum dividend will be Thursday, 29 December
2005. The shares will commence trading ex dividend on Friday, 30 December 2005
and the record date will be Friday, 6 January 2006. The payment date will be
Monday, 9 January 2006. Share certificates may not be dematerialised or
rematerialised between Friday, 30 December 2005 and Friday, 6 January 2006, both
dates inclusive.
NJ CROSSE RB HUMPHRIS
Chairman Managing Director
29 November 2005
Directors
NJ Crosse (Chairman), FD Butler, DL Eggers* (Group Finance Director), NKH Fitz-
Gibbon, RB Humphris* (Group Managing Director), Prof SSLoubser, Dr WT Marais
(Alternate to WT Marais), WT Marais (Deputy Chairman), JG Pretorius, DC Radley,
TR Scott *Executive Directors.
Registered office
1st Floor, Omnia House,
13 Sloane Street, Epsom Downs,
Bryanston, Sandton
PO Box 69888, Bryanston 2021
Telephone (011) 709 8888
Transfer secretaries
Ultra Registrars (Pty) Ltd
11 Diagonal Street
Johannesburg 2001
PO Box 4844, Johannesburg 2000
Date: 29/11/2005 08:30:33 AM Produced by the JSE SENS Department
