JSE-listed Omnia Holdings says it delivered a strong financial and operational performance for the six months ended September 30, having successfully navigated a complex global environment characterised by slow recovery of economic activity, steep increases in commodity prices and global shortages of raw material supplies, compounded by significant supply chain challenges.

The group says its shift to an integrated supply chain approach was pivotal to enhancing visibility and agility, enabling it to respond swiftly to key raw material shortages.

The benefits of Omnia’s diversified portfolio were evidenced by increased offtake from the mining division, which resulted in higher plant throughput and improved cost recoveries, which contributed to a higher margin and profitability in the agriculture business.

The manufacturing operation optimised the use of nitrophosphate products, enhancing production efficiencies and plant use, which lowered the cost of sales.

A shorter stock-to-cash cycle was implemented to counter supply chain disruptions and higher raw material prices, while early deliveries to customers and the introduction of supply chain finance positively impacted on the overall net working capital cycle.

Group revenue from continuing operations for the period increased by 31% year-on-year to R9.9-billion and operating profit from continuing operations increased by 70% to R679-million.

Omnia’s earnings before interest, taxes, depreciation and amortisation (Ebitda), excluding impairments from continuing operations, increased by 35% to R1.04-billion. Headline earnings per share from continuing operations were 286c.

Omnia ended the six months with a strong net cash position of R719-million, compared with net debt of R1.9-billion for the prior comparable period.

This improvement was supported by continued strong cash generation from operations of R890-million.

Net working capital reduced by a further R700-million to R3-billion.

Omnia continued with its strategic execution through the sale of Umongo Petroleum, which was identified as noncore.

In October, Omnia announced its agreement to divest 81% of its stake in Umongo to Orkila South Africa, with the divestment to generate about R1-billion in cash after the transaction concludes. Speaking to Engineering News, Omnia Financial Director Stephan Serfontein says that this this is anticipated by the end of January 2022.

Group greenhouse-gas emissions were reduced by 24%, from 150 000 t of carbon dioxide equivalent in the prior period, to 113 829 t in the six months under review.

Moreover, Serfontein highlighted that the group launched a Broad-Based Employee share scheme during the period; maintained its transformation level; and enhanced its focus on safety.

In terms Omnia’s segmental review, the agriculture division (comprising Agriculture RSA, manufacturing and Agriculture International), reported a 28% increase in net revenue to R5.2-billion and a 15% increase in operating profit to R449-million for the period.

Omnia services the mining industry through BME and Protea Mining Chemicals. The mining division delivered a 31% increase in revenue to R3.3-billion as a result of higher sales volumes and ammonia prices, while other initiatives supported a 28% rise in operating profit to R250-million.

Serfontein acclaimed that BME won the CAIA Responsible Care award for its used oil recycling initiative and the 'good mining practices' award in Indonesia.

The chemicals division, comprising Protea Chemicals and Umongo, recorded a net revenue increase for the period of 12% to R2.3-billion, while operating profit remained stable at R109-million.

Looking forward, Serfontein says that the group's supply chain approach, strong financial performance, and safety record positions it for further success.

He mentioned opportunities for the Chemicals division in specialised products and green chemicals; for the Agriculture division in good economic indicators and uptake as lockdowns ease.