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Nov 22, 2011

Omnia posts higher earnings, R1.4bn nitric acid plant on track

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Omnia MD Rod Humphris discusses the group's interim results. Camerawork: Nicholas Boyd. Editing: Darlene Creamer.
 
 
 
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Agriculture|Construction|Building|Explosives|Health|Mining|Explosives|Manufacturing||Operations
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JSE-listed chemicals producer Omnia on Tuesday reported a marginal increase in headline earnings for the six months to the end of September, boosted by higher demand from its agriculture and mining divisions on the back of stronger commodity prices.

The company said its chemicals division was negatively impacted on by the continued reduced output of the domestic manufacturing industry.

Omnia posted headline earnings of 348.8c a share for the interim period, which is a 2% increase on the 341.4c a share reported in the same period last year. Earnings a share rose despite a 37% increase in the number of shares in issue, after a rights issue last year to raise capital for the construction of a new nitric acid complex.

Profit for the period was up by 38% to R230-million.

The company said revenue rose by 16% to R4.95-billion on the back of increased volumes and international price increases.

Omnia also resumed dividend payments and declared an interim dividend of 100c a share. The company had put on hold payment of dividends after raising equity to fund a new nitric acid plant in Sasolburg, in the Free State.

The debt to equity ratio also remained stable at 35%, despite the company spending R379-million in the last 12 months on its new nitric acid plant.

The company is building a new nitric acid complex at a cost R1.4-billion. At full production of 1 000 t/d, the plant is expected to produce 40% more nitric acid than the company’s current fully used plant.

The nitric acid is critical for the company to expand its fertiliser and mining explosives business activities.

It said the plant is on track for commissioning in the first quarter of 2012.

“We are pleased with the exceptional health of our balance sheet,” Omnia group finance director Noel Fitz-Gibbon said at the group’s interim results presentation.

MD Rod Humphris said the second half of the year looked promising and the weaker rand would positively impact on all its operations.

“The weakening in the rand has come too late to have a significant impact on the agriculture division as most customer orders had been placed before September. We expect a 10% rise in agricultural product sales this summer, as crop prices were showing a rising trend," he said.
 

Edited by: Mariaan Webb
Creamer Media Senior Researcher and Deputy Editor Online
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