Omnia. Picture: SUPPLIED
Omnia. Picture: SUPPLIED

The delay in planting until after September contributed to Omnia’s domestic fertiliser business dragging the group into a loss during the first half of its 2019 financial.

Omnia showed its confidence that it will rebound during the second half of its financial year by declaring an interim dividend of 75c, despite falling into a net loss of R93m for the six months to end-September from a profit of R285m in the first half of its 2018 financial year.

The 75c interim dividend is 62.5% down from the R2 paid in the matching period.

The group managed to grow its interim revenue by 12% to R8.65bn, but trading profit slumped 75% to R124m, dragged down by its South African fertiliser business falling into an operating loss of R95m from a profit of R9m in the matching period.

“In SA, the planting season that typically commences in September, was delayed again due to seasonal factors and commenced after period end,” Omnia group MD Adriaan de Lange said in the results statement.

“The majority of fertiliser deliveries take place in the second half of the year. Lower fertiliser margins reflect the financial pressure being experienced by farmers and the competitive environment in the sector.”

Omnia’s South African agriculture division contributed 29% of the group’s revenue.

The acquisition of Umongo Petroleum helped Omnia’s chemicals division overtake its mining divisions as the second-biggest revenue contributor. 

But its domestic mining division remained its biggest operating profit contributor, despite its contribution plunging 57% to R82m from R189m.

“The overall margin remains under pressure due to contract pricing mechanisms linked to the lower international ammonia price in the current period, competitive prices for detonators and accessories due to slower demand resulting in excess production as well as higher overheads relative to the lower-than-planned explosives offtake by mining customers,” De Lange said.

laingr@businesslive.co.za