Govt agric schemes drive Omnia revenue

Fertiliser distributor, Omnia Zimbabwe, says its business benefited significantly from growing agricultural activities in the country and the Government’s free inputs support programmes during the full year to March 2023, which drove revenue growth.

The company saw its revenue for the period under review increase to R599 million from R584 million in the same period last year driven by various State funded farming inputs programmes such as the Pvumvudza/Intwasa and Presidential Free Inputs Scheme.

Omnia, which has manufacturing operations in South Africa, continues to see increasing demand for its products in Zimbabwe and across the continent.

“Going forward we expect increased demand for our products especially on the African continent due to various government subsidized programmes in order to leave households food secure,” the fertiliser company said.

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 profit from Zimbabwean operations for the year increased by 213 percent to R364 million in the year under review from R116 million a year earlier.

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, it says.

“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.

The fertiliser company says African governments are increasing support for smallholder farmers amid fears that input costs, driven by the continuing Russia – Ukraine war, could continue to affect crop production and worsen food insecurity.

Omnia supplies fertiliser to both commercial and smallholder farmers in several sub-Saharan African countries, including South Africa, Zimbabwe, Zambia, Mozambique, Kenya and Tanzania.

-herald