Africa-Press – South-Africa. Fertiliser and explosives group Omnia Holdings has hiked its dividend by more than a third after strong growth from most of its divisions in the year to end-March.
The 70-year-old JSE-listed company benefited from strong demand and higher commodity prices, although it said that operating conditions and prices came under pressure in the second half of the year. In reaction, it adjusted production rates and improve efficiencies.
The company reported a 24% increase in revenue to R26.5 billion, while operating profit rose nearly a fifth to R1.899 billion and headline earnings per share increased 10% to 742c. It declared an ordinary dividend of 375c, up 36% on the 275c declared in the previous financial year.
Its agricultural division saw revenue increase by nearly a third to R14.6 billion, while operating profit increased 2% to R1.24 billion in a “highly challenging environment”, the company said.
“Initial favourable agronomic conditions in most key regions allowed us to capitalise on opportunities, thereafter adverse weather conditions in Australia, Zambia and South Africa had a negative impact on volumes.”
Revenue from its mining division jumped 28% to R8.5 billion thanks to higher average commodity prices.
Its chemicals segment, however, saw revenue decrease 8% to R2.7 billion, while operating profit fell 7% to R132 million. Omnia said its Protea Chemicals business was hit by “headwinds in the manufacturing sector” – as well as once-off cost adjustments relating, among others, to inventory management.
Two years ago, the South African Revenue Service (SARS) audited Omnia and slapped the company with a R1 billion bill related to tax on transfer pricing from 2014 to 2016. Transfer pricing is applied on goods and services transferred between cross-border connected parties.
In September last year, SARS “partially allowed” Omnia’s objection to its assessments. But this only resulted in a “nominal reduction” in the outstanding tax.
Omnia says it disagrees with SARS’ findings. It lodged an appeal, with SARS and Omnia currently involved in alternative dispute resolution (ADR) proceedings.
“We remain committed to expeditiously bringing this matter to a close,” Omnia said.
As far as its outlook was concerned, Omnia said it expected ongoing volatility globally, while SA’s “energy and electricity disruptions and infrastructure deterioration are expected to continue to exert pressure on the domestic economy”.
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