Omnia Zim half-year revenue drops 56,5pc
Fertiliser distributor, Omnia Zimbabwe, says its business recorded a 56,5 percent revenue decline during the 2024 half-year period to September 30, 2023, weighed down by hyperinflationary conditions, which characterised the first quarter of the year.
A cocktail of interventions by authorities have since stabilised both the inflation run and exchange rate volatility and Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube has forecast sustained inflation fall in 2024.
The company saw its revenue for the half-year period under review decline to R260 million from R598 million in the same period the prior year.
Omnia, which has manufacturing operations in South Africa, continues to see potential for increasing demand for its products in Zimbabwe and across the continent.
However, Omnia expects a drop in volumes in the coming year after the company made a deliberate decision to limit its exposure to currency and foreign exchange volatility given liquidity challenges in the country.
The company said operating loss for the Zimbabwean subsidiary fell to R15 million compared to R264 million in the 2024 half-year period, weighed down by hyperinflation challenges.
This comes as Government efforts have led to increased agricultural output, including key grains like maize and wheat.
In terms of wheat, production during last year’s winter season yielded a record 375 131 metric tonnes from 80 883 hectares planted under various financing models.
And in the 2023 winter season, the target to increase the total hectarage to 90 000 was met, which drove volumes for chemicals and fertiliser companies.
According to the Government, the country increased by three percent the area planted under maize to 1 962 575 hectares in the 2022/23 agricultural season from 1 903 668 hectares planted the previous season.
At group level, the company maintained a disciplined focus on costs, prudent capital expenditure and stringent working capital management, which supported its robust financial position with a net cash balance of R1,6-billion, compared with R140-million in the six months ended September 30, 2022.
Total group operating profit decreased by 15 percent to R684 million, while headline earnings a share decreased by 4 percent to R295c.
Net asset value increased to R10,3 billion.
Working capital decreased by R1,1 billion year-on-year to R4,1 billion, as a result of declining commodity prices and further optimisation in Omnia’s supply, manufacturing and demand cycle, while continuing to provide security of supply to customers.
“We remain committed to our purpose to positively impact global food security and livelihoods, while reducing our environmental footprint.
Omnia’s results reflect the diligent execution of our strategy,” the company said in a statement.
Omnia said it was committed to executing its strategy in pursuit of sustainable growth and enhanced returns on capital and its focus remains on enhancing operational stability, optimising costs, and prioritising supply security and value-added services for customers.
The group’s organic growth businesses are said to be positioned to unlock further value as it grows in scale and capacity.
Omnia said it will continue to invest in the AgriBio business unit by enhancing its distribution footprint across the country.
Omnia supplies fertiliser to both commercial and smallholder farmers in several sub-Saharan African countries, including South Africa, Zimbabwe, Zambia, Mozambique, Kenya and Tanzania.