Omnia growth forecast 'expected'

Johannesburg - Diversified chemical services company Omnia expects increases of 40% to 60% in its basic and headline earnings per share (Heps) for the year to end-March 2009. However, this shouldn't come as much of a surprise, said an analyst.

"If anything, as investors we should be surprised that the figures are not higher," said Alistair Lea, portfolio manager for Coronation Fund Managers.

In its results for the year to end-March 2008, Omnia recorded basic earnings per share of 718c, group operating profit of R584m and R7.3bn revenue.

On Monday, the company released a trading statement that said it expected Heps and basic earnings per share to increase by between 40% and 60% for the year to end-March 2009.

In its latest trading statement, Omnia said the forecasts were due to "buoyant conditions in the markets served by the group, particularly in the first half of the current year".

Omnia comprises three business divisions: agriculture, mining and chemicals. Its mining division supplies explosives to the open pit mining and quarrying industry, while the agricultural division manufactures granular, liquid and speciality fertilisers.

Lea said: "During the period the average fertiliser price was substantially higher, coupled with higher ammonia prices. As a result, the company benefited from the higher prices for its products. For long-term investors it's a great time to invest. If investors can look past the short-term earnings, then the share comes very cheaply."

The group will report its results for the year to end-March on June 23.

- Fin24.com