JSE-listed diversified chemicals group Omnia Holdings reports that it achieved solid results for the financial year ended March 31, noting that this reflected the finalisation of the group’s stabilisation plan, which included the successful recapitalisation of the business.

Omnia’s balance sheet and debt profile were significantly strengthened in the year under review, following an oversubscribed rights issue of R2-billion in September 2019 and the finalisation of a new debt package at the end of December 2019.

The group generated cash from operations of R2.2-billion. As at March 31, net debt had decreased to R1.88-billion, compared with R4.4-billion in the prior financial year, while total assets had increased to R18.1-billion from R16.6-billion the year before.

Omnia reports that its debt covenants were comfortably met and that the group has access to R3.7-billion in undrawn debt facilities.

The group notes that, with its stabilisation plan finalised, the adoption of prudent financial management resulted in an improved performance across all business units during the financial year under review, with all three divisions having improved profitability significantly despite difficult economic conditions globally.

Revenue remained stable at R18.7-billion and operating profit increased to R789-million, compared with R24-million the year before.

Earnings before interest, taxes, depreciation and amortisation, excluding impairments, increased to R1.8-billion, from R979-million in the prior year, while headline earning a share increased to 189c, from a loss of 97c the year before.

Omnia CEO Seelan Gobalsamy says the robust execution of Omnia’s turnaround plan has positioned the group strongly.

“The excellent results achieved thus far provide the foundation to continue driving long-term sustainable value, enhancing efficiencies and enhancing returns.”

He adds that this approach remains especially critical given the significant structural changes in the sectors in which Omnia operates and the uncertainty created by the Covid-19 pandemic.

TURNAROUND PLAN

The turnaround focus during the financial year under review focused on reducing costs, increasing margins, managing working capital more effectively and ensuring a return on capital previously invested.

Omnia reports that all these measures have produced improved cash flows and supported strong earnings growth for the group.

Since taking over the role of CEO in August 2019, Gobalsamy has embarked on a comprehensive review of all business divisions, markets, assets and footprint to reposition Omnia and drive the turnaround plan. In support of this plan, Omnia has adopted a capital expenditure-light expansion approach whilst strengthening its leadership to drive a culture of performance across the group.

He says that both the mining and chemicals divisions have been strengthened through restructuring processes over the past two years.

“Changes to the Southern African Development Community (SADC) business model have also been initiated to create market-facing SADC businesses and a separate manufacturing unit, focused on production excellence.”

Since the start of the Covid-19 pandemic, Omnia has continued to deliver essential services, including primary chemicals and solutions for the agriculture, mining, manufacturing and fuel sectors, which play an essential role in food security, economic stability and the livelihoods of people globally.

Going forward, Omnia states, it will continue to take extensive measures to ensure the welfare of its people and partners around the world, while delivering essential services to its customers.

In this regard, Omnia’s internal policies and risk management practices are constantly reviewed and updated to ensure that they continue to align to the rapidly evolving health and economic situations.

“The unprecedented disruptions since the start of the year have added to the headwinds facing our businesses but mostly my heart goes out to those whose lives and livelihoods are threatened by the outbreak of this pandemic,” says Gobalsamy.