Specialised chemicals provider Omnia has lifted revenue 21% to a record R16.3-billion for the 12 months ended March 31, on the back of volume and sales price increases in its mining and agricultural divisions, price increases in the chemicals division and foreign currency gains.

Gross profit for the group increased 17.6% to R3.6-billion and reduced marginally to 22.2% of revenue, owing to reduced gross margins in the mining and agriculture divisions.

Other operating income of R115-million included a gain of R52-million on the disposal of Omnia’s interest in a Nalco Africa associate and an insurance claim receipt of R12-million.

Administration overheads increased by 22% to R908-million, owing primarily to the JSE-listed company’s “abnormally high” long-term incentive plan (LTIP) overheads.

Meanwhile, operating profit increased 15% to another record high of R1.4-billion on the back of improved operating profit in the mining and chemicals division, while after-tax profit increased 12.7% to R992-million.

Basic earnings a share increased 12.3% to R14.96.

The board declared a final gross cash dividend of 290c per ordinary share for the year under review.

Revenue from Omnia’s mining businesses, comprising explosives provider BME and chemicals producer Protea Mining Chemicals, increased 24.6% to R5.4-billion, on the back of volume growth of 12.7% and an average sales price increase of 11.9%. Price increases were largely owing to the weaker rand.

“Operating margins reduced from 16.8% to 15.2%, as margins came under pressure from increased competitor pricing, the high cost of bought-in replacement product after an illegal strike at the Losberg cartridge production facility, in the North West, and abnormally high cash-settled LTIP expenses,” group FD Noel Fitz-Gibbon said at the group’s results presentation last week.

Net working capital increased to R1-billion, owing to higher volumes and the longer supply chain process of Omnia’s Central and West Africa operations.

Revenue from Omnia’s agriculture division, which includes Omnia Fertiliser and Omnia Specialities, increased 23.7% to R6.6-billion on the back of a 12.4% volume increase and an average 11.3% improvement in sales prices.

“The overall gross profit percentage weakened, owing to the even more unfavourable ammonia-to-urea ratio, production problems on the granulation plants in the first half of the year, which necessitated the import of over 100 000 t of fertiliser, which sold at low margins, and the effect of the new lower margin wholesale business that was started in the year,” Fitz-Gibbon commented.

These were, however, partially offset by the effects of the weaker rand, increased production volumes at the new nitric acid complex, and improved sales margins, mainly through product diversification.

The lower gross margin performance, well controlled overheads but abnormally high LTIP expenses caused operating profit to decrease by 3% to R431-million over the period, reducing the operating margin to 6.5%.