Omnia Profit Up 21% as South Africa Fertiliser Maker Shields Ammonia Supply

South African fertiliser and explosives maker Omnia Holdings has shifted its ammonia supplies from the Middle East to secure stocks of the key raw material, its chief executive officer said on Monday, as the company reported a 21% jump in annual profit. Omnia's headline earnings per share for the year ended March 31 reached 8.49 rand ($0.51), up from 7.04 rand the previous year.

The company bumped up its ordinary dividend to 4.70 rand per share, versus 4 rand the previous year. It also said it would pay a special dividend of 2.80 rand per share, an increase from a special payout of 2.75 rand previously.

Omnia CEO Seelan Gobalsamy said fertiliser prices are up by as much as 70% since the start of the conflict in the Middle East, a region that is vital for the supply of ammonia, which is key in the manufacture of crop nutrients. The Iran war, which broke out on February 28, has disrupted key supply routes and production facilities in the Middle East.

"We have had disruption due to that and we've been able to mitigate that risk by purchasing from other parts of the world," Gobalsamy told Reuters, without saying what alternative sources were being tapped. "We've got a global supply chain, so we've cancelled some of those orders that were stuck in the Middle East and we've purchased elsewhere. So as we stand today, we've got feedstock that takes us forward into the coming months," he added.

Omnia, a major fertiliser supplier in the southern Africa region, reported strong volume and margin growth in South Africa, Zambia and Zimbabwe. Its explosives business recorded demand growth from the iron ore and platinum mining sectors, although this was partly offset by the downturn in the diamond sector and volatility in coal.