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Johannesburg - Diversified, specialist chemical
services provider Omnia Holdings (OMN) advised on Friday that, for the
interim period ended 30 September 2009, the group expects a loss of between
R95m and R105m or a loss per share of between 210c and
230c, after a profit of 839c in the prior comparative period.
The group said as indicated when it published its year-end
results in June, the financial year ended March 31 2009 was an exceptional
year for the group. The past financial year was characterised by
unprecedented market conditions, in that it reflected neither the typical
trading nor growth patterns experienced in previous years.
"Commodity prices in general have substantially declined since the
beginning of the year, with the group being significantly exposed to the
rapid decrease in prices of nitrogen, phosphate and potash, the basic
ingredients of fertilizer.
"The unprecedented collapse in the price of these commodities left the
group holding substantial fertilizer stocks for its farming customers valued
at considerably higher prices than current market value. This has
necessitated a material downward adjustment to the carrying value of the
stock," the group stated in a trading update.
The drop in commodity prices also had a negative effect on demand since
farmers reduced their orders to the minimum while prices were declining. The
mining industry in South Africa which forms an important component of the
group's customer base was also negatively impacted by the decline in
commodity prices, it said.
"The continuing strong rand remains one of the major impacts on
financial performance of the Group in the near term impacting negatively on
each of the three business divisions. Margins will therefore remain
depressed as long as these conditions prevail.
"Accordingly, shareholders are advised that, for the interim period
ended 30 September 2009, the group expects a loss of between R95m and
R105m or a loss per share of between 210c and 230c, after
a profit of 839c in the prior comparative period," Omnia stated.
It added that signs of economic recovery are visible.
"Commodities prices continue to benefit from growing optimism about
global economic trends and conditions. Our divisions continue to optimise
opportunities across various geographies and industries whilst remaining
focused on basic deliverables," it said.
The financial results for the review period will be published on
November 30 2009.
- I-Net Bridge