Shares in chemical and fertiliser maker Omnia Holdings soared nearly 10% to close at R30.14 on Tuesday, its best performance in nearly three months, after it reported that it expected its interim headline earnings would increase more than twofold.
The company’s shares initially rose more than 20% to R33.13 in early trade on Tuesday, shortly after the announcement of an expected increase in headline earnings of as much as 138% for the six months ended September 2019.
The expected increase in earnings per share and headline earnings per share could signal a major change in fortunes for CEO Thanaseelan Gobalsamy and the group, which has been underperforming due to a combination of crippling debt and a downturn in key sectors.
Omnia’s shares are down 48.7% since the beginning of 2019. The chemicals group supplies chemicals and specialised services to the agriculture, mining and chemical industries.
Omnia, which has a market capitalisation of R5bn, said earnings per share were expected to increase by between 121% and 131% to 30c and 42c, compared with a loss of 138c in the six months ended September 30, 2018. It said headline earnings per share were expected to increase by between 130% and 138% to 42c and 54c, compared with a headline loss per share of 140c in the same period in 2018. Omnia is scheduled to release interim results on November 26.
In a bid to turn its fortunes around, Omnia has raised R2bn through a rights offer, which would be used to repay the firm’s debt. In the rights issue — underwritten by a number of asset management companies including Allan Gray, Coronation, Foord, Kagiso, Old Mutual and Prudential — the company issued 100-million new shares at R20 apiece.
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