South African chemicals company Omnia Holdings has declared a special dividend after increased demand for explosives, driven by battery metals exploration, boosted the company’s prospects.
Omnia’s after-tax profit was flat at 1.163 billion rand ($61.88 million) in the year ended March 31, compared with 1.152 billion the year before, as fertilizer prices came off record highs, impacting earnings. However, the company’s explosives business helped offset this, bolstered by rising exploration budgets and activities, particularly in green and battery minerals.
The global shift away from polluting fuel sources such as coal has increased demand for cleaner energy minerals such as lithium, cobalt, graphite, and copper, leading to more exploration projects. This has benefited Omnia’s explosives unit, BME, which operates in 17 African countries, as well as having partnerships in Australia and Indonesia.
Omnia CEO Seelan Gobalsamy said, “For the first time, we have equal profit from agriculture and mining, because we have always been known as an agriculture business. What you see is the diversification benefit of the global earnings coming through from our mining business. It means our shareholders have a different, progressive asset that is diversified.”
The company declared a special dividend of 3.25 rand per share, in addition to an ordinary payout of 3.75 rand per share, returning 1.16 billion rand to its shareholders.
Gobalsamy noted that the markets in Australia and Indonesia, where Omnia has partnerships, are growing rapidly, indicating the growing demand for its explosives products in battery metals exploration.