Omnia returns to profit as restructuring bears fruit

Chemicals and fertiliser group Omnia says it is optimistic that extensive restructuring across its business lines will help it adapt to changing demand in the wake of the Covid-19 pandemic.

The group returned to profit in its year to end March, saying it benefited from improved sales in its agriculture division, while it is also seeing the benefits of restructuring exercises, including cost containment and job cuts.

The group reported profit after tax of R129m, from a loss of R407m previously, with group revenue rising only slightly to R18.7bn year on year.

Improved agronomic conditions and timely rain across Southern Africa supported reasonable fertiliser sales volumes, while the weakening of the rand helped support profit margins, the group said. This was offset by low international commodity prices.

Lower crude oil prices put pressure on oil-derived chemical prices, while due to the uncertainty posed by the Covid-19 pandemic, the group has written down subsidiary Umongo by R105m.

The group has moved to change its sales mix and discontinue unviable product lines, which showed results at Protea Chemicals. That business generated an operating profit of R110m in its year to end-March, from a loss of R68m previously.

“The robust execution of our turnaround plan has placed Omnia in a strong position,” said CEO Seelan Gobalsamy.

“This approach remains especially critical given the significant structural changes in our sectors and the uncertainty created by the Covid-19 pandemic,” he said.