Omnia Holdings has laid out plans to slim down its ailing chemicals business as the company’s high-powered mining segment takes centre stage.
Omnia’s annual results show the lengths to which the group went to protect the chemicals division last year, with the unit recording R99m in restructuring costs for the year to end-March.
The group previously indicated it was exploring ways to sell portions of the noncore business and had launched a strategic review in the first half of the financial year.
This culminated in a significant restructuring of the segment, including separating the profitable Water Care business, which is being held for sale, and integrating the profitable chemicals trading business into the broader portfolio.
Omnia CEO Seelan Gobalsamy told Business Day on Monday the restructuring would focus the company solely on agriculture and mining. Eventually, “there won’t be a traditional chemicals business as we’ve known it,” he said.
The unit, which was still beset by the macroeconomic environment and the decline in SA’s manufacturing sector, reported an operating loss of R133m for the year.
The restructuring is set to be completed in this financial year, which Omnia said is “expected to be a significant transition year, in which noncore assets and business lines will be sold, capital released and returns improved”.
Reflecting on the group’s latest results, Gobalsamy said: “We’ve changed the quality of our earnings from those of a chemical and agri-business to those of a mining business.”
The headwinds on Omnia’s chemical unit were more than offset by a strong performance in the group’s mining division, where operating profit rose 13% to R1.129bn as revenue climbed 10% to R9.121bn.
BME, which provides blasting solutions for the mining industry in SA and abroad, reported higher volumes and improved profitability during the period under review, supported by the group’s ongoing global diversification strategy.
Omnia said it expected BME to deliver more profit this year as growing demand for uranium, copper and green metals was expected to increase mining volumes in the Southern African Development region.
After a challenging first half, Omnia’s agricultural segment also recovered in the second half, despite persistent adverse weather conditions, currency volatility and other economic headwinds.
Operating profit from agriculture rose 3% year on year to R981m, despite revenue being down 2% at R11.541bn.
The group attributed the segment’s robust performance to operational agility and a favourable product mix, as well as stable commodity prices.
The stronger financial performance of Omnia’s mining and agricultural segments saw the group report headline earnings per share of 704c, up 1% from the previous year.
Revenue was 3% higher at R22.8bn, while operating profit was little changed at R1.7bn.
The group declared a special dividend of 275c in addition to an ordinary dividend of 400c, up from 375c a year ago.
Gobalsamy said the group had considered its net cash balance of R1.8bn at end-March and, after increasing the ordinary dividend, still felt there was cash available to distribute.
“We wanted to reward shareholders for the strong cash generation the business has achieved,” he said.
“The increased ordinary dividend payout, and special dividend declared, is a clear signal of our confidence in the sustainability of our earnings and the successful execution of our growth and diversification strategy.”
Correction: June 9 2025
This story has been corrected to show that revenue at Omnia’s chemical unit climbed 10% to R9.121bn (it was previously reported in millions) and its agricultural segment's revenue was down 2% at R11.541bn.
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