Omnia Holdings Limited (OMN) Earnings Call Transcript & Summary

Thank you. Good morning, everybody. I'm hoping you can hear me loud and clear, and thank you for joining us at our results presentation this morning. With me on the call, I've got Stephan Serfontein, our Group Financial Director; and a few of my management team members who will assist with some of the Q&A at the end of the presentation. Before I start, it's reflecting for me to state that this is our third set of results coming out in the time of the pandemic and lockdown. And we are deeply saddened by the loss of life the pandemic has caused, as in Omnia Group, we have lost 6 of our colleagues to COVID. And sadly, we are in the depths of a very nasty third wave in Gauteng and a number of our colleagues are positive. Some of them are at home, and I'm really grateful to some of my management team members who are on the call who are also positive and feeling strong enough to attend the presentation that we salute to. We thank you for that. And my heart goes out to all of the people of the world, of South Africa, of Africa and in the Omnia family that have been badly impacted by the pandemic. We pray and hope that the vaccines are produced and distributed as soon as possible, and we will continue to enhance our protocols around safety, social distancing during these difficult times. If we can move to the next slide, thank you. Just in terms of regulatory and compliance. There's a few notes on our statements. And I'll move on to the next slide. I'm going to talk a little bit about our ESG. We'll do a broad business update. We'll get into the financial results, which Stephan will do most of the heavy lifting, and we will then make some concluding remarks thereafter. Thank you very much. We can go to the next slide. I think where we started, obviously, COVID has had a significant impact on the world and businesses at large. The first impact has really been on people. And as an Omnia group, we have focused on helping and assisting our people, our people in our supply chain, our customers, our communities to really overcome this pandemic. The pandemic itself has firstly been something that's threatened life. And I think it's particularly pleasing that we, as a diversified chemicals business, could contribute from a cleaning perspective, could contribute from a sanitizing perspective, but could also contribute from -- with some of our technical expertise, whether that came from some of our engineers being involved in the ventilator project in the first wave and then also contributions around hydrogen fuel cells and clean water that we've been able to help various communities. As Omnia, we are absolutely committed to doing as much as we can to help the world fight this pandemic, and we're committed to ensuring that we continue to assist our people, to assist communities as anyway we can. I've mentioned previously, my heart goes out to the number of folks that have passed due to the virus. On a daily basis, we monitor the number of infections we've got across our group. We monitor the number of folks in our group who have been vaccinated. And it's pleasing to see that the number of vaccinations outside of South Africa has progressed really well. It's sad to see that the pace of vaccination in South Africa, where the bulk of our people are located, has been particularly slow. If I can move ahead then, clearly, the pandemic has also had some significant impacts on our business. The key impact has really been supply chain disruptions. I think it's no surprise to all of you that we've had ports. We've had suppliers. We have had producers. We have had rail and ship infrastructure being disrupted, disrupted during the pandemic. The restrictions have been at various levels in [Audio Gap] and continents that we've operated in. And really what it's led to is volatility in demand in terms of explosives. And from our Chemicals business perspective, weak demand in certain instances. It's particularly comforting and pleasing, and you'll see that, is that Omnia Group, the people of Omnia have all worked incredibly hard, firstly, to safeguard our employees and communities; and secondly, to ensure that all of our customers can have supply in these very difficult conditions. Our supply chain, our agriculture folk have ensured that we could have a really great plant planting season in SADC that we were able to supply fertilizer. And what we will see is probably a really good crop and a really good impact. We've had positive impact that we've had on agriculture. We've been able to do the same from a mining perspective. Our Mining business, which also utilizes various infrastructure in Sasolburg has been incredibly resilient in terms of supply. And as the demand has ebbed and flowed with the different waves of COVID, [ Omnia is ] at the forefront of being able to supply mining customers. Where there's been border closures, where there's been plant disruptions, where there's been shortage of feedstock, we've been able to, on an agile basis, move our supply chain around to ensure that every single customer's demand was met. It's -- not only is it an incredible noble response to the COVID pandemic, but also great for our business. As a business, we also continued our strategic execution of ensuring plant efficiencies, ensuring cost containment and reductions and focusing on cash generation and strengthening our balance sheet. And you can see, as we get through the presentation, the great results we've had on that score. I think coming back to our impact and purpose, I think we know that successful businesses in the long term are really created where the people of the business and the purpose of the business is intertwined, and I think it's great to see that our impact that we make is so profound in terms of food production, is so profound in terms of cleaning chemicals and sanitizing and water and is so profound in terms of livelihoods that our Mining business has not only to supply large-scale employment in the mining and agriculture sector, but also to ensure that the value generated in both those sectors and the contribution those sectors made to GDPs across the countries, we may continue during these difficult times. We've been able to respond to COVID and run our business and deliver on our financial results by also -- whilst also improving our safety. And if we move to the next slide. What you see here is an improved safety performance in all of our businesses. So firstly, BME has had the lowest RCR rate ever. And it's really great to see that, that business continues to improve and continues to do well. We've seen a huge improvement in our Chemicals business as well and an improvement in our Agriculture business. Safety is not something that we take lightly. And as an Omnia Group, we are committed to doing what's right to having 0 harm and to ensuring that all of our people are safe. There's a number of processes, and you'll see a few enhanced disclosure slides in this pack, where we are measuring, monitoring and improving our overall ESG impact as a group. If I move to the next slide, clearly, there's lead and lag indicators in safety. A lead indicator will be near misses and smaller first aid incidents. All of these are being micromanaged to ensure that we continuously improve. And I guess what you see is a declining trend from a first aid perspective as well. That leads me into environmental issues, and there's a number of stats that we put out here. And just to give our shareholders and our investors a sense of how we think about waste, how we think about environmental incidents, how we monitor them. And you will see a reduction in terms of hazardous waste, a year where we've had 0 environmental incidents, major environmental incidents. And if we move to the next slide, a reduction in effluent discharge, an increase in usage of recycled water, an increased efficiency of water usage overall and an increased efficiency in energy usage. These are all important stats for us to measure, and it's really fundamental in our quest to create and leave a better world. If I move on to our next slide, just around carbon management, something that's very important and topical globally. Our shareholders would know that we've introduced and invested in an EnviNOx technology and catalyst that actually reduces emissions. And that technology was reinstalled last year, which has resulted in a reduction in our greenhouse gases. And we will continue to measure that and ensure that all of our production facilities across the world actually continue to improve and do what's right for the world and the environment at large. I'm talking not just to our production facilities, but also to our customer-facing business units, BME and agriculture have got very deep-rooted processes in the new geology concept in agriculture. Perhaps I'll pick on the double salt emulsion in BME where we use used oil. All of those actually result in our end customers, being the farmers and the mines, actually having lower carbon emissions in their processes and in their businesses. So this is something that is not embedded just in our business, but also in our customers. And we will look to enhance our focus on ESG in coming years. We also, in our Sasolburg facility, focused heavily on generating some of our own electricity. We generate up to 40% of our own electricity in the complex. We use steam and supply from Eskom. And going forward, we will also be investing in a solar investment that will be value accretive and reduce our dependency on traditional electricity further. If we can move to the next slide. So just in summary, our quest is to create and leave a better world. We've got certain environmental goals that we've set for us as a team, and I'm not going to go through all of that detail. And clearly, we're focusing not only on our own plants and our own manufacturing capabilities, but also those that we do for our customers, our customer-facing services to actually continuously do what's right and continuously implement sustainable practices in our business. So if I can move forward then just in terms of a business update. I've mentioned our purpose. The next -- that's it. Our purpose is really to protect lives and sustain livelihoods and create a better world. You've seen a few slides now on creating a better world and our commitment to more sustainable practices. But I think what we do know, Omnia's business is something that is incredibly noble. We are in essential primary chemicals. We protect life and create food security via our Agriculture business. And both our Agriculture and our Mining and our Chemicals business have profound impacts on GDP, manufacturing, employment, livelihoods across South Africa, Africa and the rest of the world. It's important that as our business resets, renews itself, as our business has a much stable balance sheet and platform and we grow, we need to reunite all of our people with our purpose because we know people that are united with a purpose of a business are actually more engaged and actually create magic and deliver sustainable growth and sustainable value for shareholders, communities, customers and themselves. If we move to the next slide, I think we have seen -- and let's just focus for a sec on the macro factors that we deliver these results in. The macro factors have been fairly, fairly negative. If we just take a step back and think we've got 12 months of results and those 12 months were all operated in various levels of lockdowns, not only in South Africa but across the world, we have had an extensive impact on COVID-19, not only on people disruption but supply chain disruption. We continue to see social and political uncertainty in a number of the territories we operate in West Africa, Africa and South Africa. And erratic electricity, water provision. We've also seen volatility in the rand and the global recession, GDP decline, which has impacted demand. Having said all those negative macro headwinds and we all experienced it, what you will see is an incredibly resilient performance by our business. So let's just unpack those wins a little bit for Agriculture, Mining and chemical -- Chemicals. From an Agriculture perspective, we've had good agronomic conditions in SADC, good fertilizer demand. You will see that we have sold more fertilizer this year. We've produced more fertilizer this year. We've run our plants harder this year, which has been really great for us. We have seen good production and demand from our biological business in Australia, our humates business. We've increased the capacity in that business, and we can see the customers taking up that demand. And clearly, the negative is the hyperinflation issues in Zimbabwe, which plagued a number of businesses that are in Zimbabwe. The mandate to our teams was not to expose additional dollars into that market and risk our balance sheet. And I think if you look at our results, you see that our team has done really well in terms of managing that issue. From a Mining perspective, a little bit more headwinds. So -- I think the COVID disruptions have been a little bit more stock in that area, demurrage costs. The disruptions in the international business has been a little bit more significant as the year progressed and the lockdowns continued. A number of countries actually went into harder and tougher lockdowns than what we've seen in the local market. And then we've had some, what is, inclement weather in mining, but it's really great weather in agriculture. As the rains come and the rains continue for a while, it has a negative impact on volumes in mining. We've also seen the gold sector change and reorganize itself and have levels of instability. And clearly, we've seen some uncertainty in West Africa, which I've spoken to already. And I think all of that has led to a little bit of difficulty in the Mining business, but I will talk in a bit more detail around that a little later. From a Chemicals side, we saw increased demand for certain products, but we also saw a fall-off of demand which you would have seen in our half year results in a number of the Protea Chemicals products. We saw an incredible resilient performance though from Umongo and Protea. And I think, overall, I'm pleased with how that business has navigated these macro headwinds. At a general level, what we've seen is the people at Omnia have come together and have actually taken on this macro environment and have actually come out fairly resilient on the other end. If I move to the next slide, I think what the environment provides us with is a high degree of uncertainty. And I just reflect, during last year's results in what was a particular hard lockdown, feeling a little bit at ease at half year thinking, well, there's light in sight. And today being, at a personal level, a little bit more subdued because we've just seen how forceful and how impactful the third wave is in Gauteng. It's an absolute sad week for us in Gauteng at the moment to see what is happening in the hospitals. And I think what that has left us with is that as leaders, we're forced to lead in extreme uncertainty. And we always called and taught to manage risk. Uncertainty comes with a very different muscle that's needed. And I'm particularly pleased with the Omnia team, the management around how the team has come together to actually take on this uncertainty. During this uncertainty, you see extreme resilience in our company. Our company, we were able to expand our humates business in Australia. BME continues to do a number of large blasts and holes records in that regard. They continue to execute in Canada and Indonesia and develop their detonators further, also launching a new software package. Our group wins various awards. We've executed on a large-scale transaction, which is the conclusion of Oro Agri. And that transaction was done solely during a lockdown period. And we've won a number of awards. And I think what you're seeing is an extreme resilience in our business to actually take on the challenges that we face. That is not easy. That comes with a chunk of heavy lifting that the leadership team and the 4,200 folks across our business need to do. We also -- if we cast our mind back, we had an IT breach in March last year, and we've got a full 12 months of various degrees of lockdown in our results. In terms of delivery on our strategy and what we promised we would do over the last few years, if we could move to the next slide. I can safely say that we've executed on our stabilization plan. We've restored our balance sheet. We've delivered on a number of cost savings and margin enhancements. We've managed our costs, our working capital, our CapEx and our cash generation well. We're firmly in the renewal and reset phase of our company. We've got more to do in terms of executing our new business model and manufacturing excellence, but we've delivered some good results there. We've got more to do in terms of winning from a customer perspective and enhancing the margins and value we eke out of the value chains. And we've got more to do in terms of group synergies. We have to continue to invest in our people, care for our people, grow our people. Our people are those that service our customers and run our fantastic plants and operations across the world, and all of that will result in higher margins and higher return on capital going forward. We've delivered great cash generation in the last 12 months, and we will continue to expand. So we've got ambitions to expand our Agriculture business internationally and our Mining business internationally, which is our 2 core businesses, and we will continue to do that in a very careful way, which I will speak to a little bit later. In terms of our operating model, and I'm pleased to report to you that our operating model, which had really 3 elements to it. The one is optimize SADC businesses. So optimize our supply chain, our manufacturing and our distribution between Agriculture and Mining. It has really started to show great benefit. We show a great performance in our Agriculture segment, which includes the manufacturer. And we can really see and point to the benefits of optimizing our large facilities in Sasolburg, optimizing our nitrophos, nitric acid plants, granulators, supply chain and distribution of that into agriculture and mining. From an international perspective, we said we want to grow in BME and agriculture, and it's great to see us having executed on some of that in Australia. So even with our agri out of our results, you see some nice uplifts coming through from our Australian business, and Stephan will give you some more insights and some enhanced disclosure out of that business, so you can see what the future holds there. And then we said we've got 2 less core businesses that are not in mining and agriculture, which is Protea and Umongo. And I think great resilient performance from those 2 management teams that have needed to run the business differently in the time of COVID. And I think this -- which kind of sounds simple, but this operating model has really brought some focus, a great degree of focus to our teams, a great degree of focus to what we need to do and has delivered great value for us in the last period. So if I move to why you're all here, really our financial results, and I'm particularly proud of what the team has been able to deliver. I think I haven't done justice to how tough it was and how the macros were against us and how we've succeeded against that. But I think it's a great achievement to see our revenue flat or stable from last year. While some of our businesses have seen revenue declines, others have seen revenue incline -- increases, and you see a stock increase in profits, even though the revenue is stable. Our operating profit increased by 61%. Obviously, there's a decrease in interest due to the cash generated. Our profit before tax also up roughly 8x. Our EBITDA, excluding any profits on the sale of Oro, up to ZAR 2.1 billion. With those profits, we go to ZAR 2.9 billion or so. And there's a slide that will come up just now that I'll talk to that. Obviously, our earnings per share also up. Our headline earnings up. Really good management of working capital, again, which I will explain and unpack a little bit later. The company clearly generated a large amount of cash during the period, and I'll talk about that cash and talk about where we landed at year-end in terms of our net cash position. And then clearly, where we've landed as a Board is to distribute ZAR 1 billion to shareholders, an ordinary dividend of ZAR 2 a share and a special dividend of ZAR 4 a share. I will unpack a few of these numbers a little bit later. If we move away from the financial numbers and just go to the salient features, not only did we deliver great numbers, we also increased our B-BBEE level from a Level 3 to a Level 2. We've won a few awards that I'm not going to go through. We've done all of this in a much more safer environment, and we've been able to execute on increasing some of our volumes, increasing some of our plant capacities and responded in a fairly resilient way to the COVID pandemic that will probably be with us for a while. If I move to our operating divisions, and Stephan will go through this in a little bit more detail. But broadly, in Agriculture, and if I were to exclude the discontinued operations and exclude Zimbabwe for a second because that's where hyperinflation has happened, our continuing operations' Agriculture profit has increased from ZAR 291 million to ZAR 565 million. Great performance driven by increased demand, driven by great control of expenses, the focus in the manufacturing and supply chain area has resulted in benefits being realized there. And also strong performances in Zambia, Australia and Brazil, the international businesses, driven by higher demand for our AgriBio bio products. Our Mining business, that's a business that's had headwinds, a drop-off in earnings from ZAR 356 million to ZAR 287 million, largely driven by the international business, the mining international business, which has been adversely affected by COVID, supply chain disruptions, demand and then a chunk of once-off costs that have come through around demurrage and political uncertainties in West Africa, which we will unpack a little bit later. From a Chemicals perspective, great performance from that business as well. We saw the margin increase in the segment. The Chemicals business delivered ZAR 209 million profit from ZAR 173 million. A great performance from Umongo. And I think, yet again, the Protea Chemicals team, whilst there's a drop off of revenue, were able to hold and deliver margins and profits. And we will unpack that a little bit later. It required the business to change its product mix and to respond to differing customer demands. If I were to just step forward to the next slide, our EBITDA analysis. Our EBITDA moves from ZAR 1.5 billion from continuing operations last year to roughly just under ZAR 3 billion. But bear in mind, we've got the discontinued operation in there. If we take the profit on sale of Oro Agri out, really great improvement in EBITDA of 18%. And I think what you're seeing is a consistent rebasing of the business and another reporting period of steady growth and performance in our results. If I move to our next key measure that we've spoken about often, our net working capital. And yet again, you see us being able to manage the business very prudently through the planting season, a slight reduction in working capital yet again. I'm comfortable with the working capital being slightly higher than this. But I think our management team have got a very clear mandate and know how to spend money, know when to spend working capital. And the optimization of SADC and our Sasolburg plant has really helped us to be a lot more effective and efficient on working capital. I think what's particularly pleasing about this slide, and you'll see that a little bit later in the pack. We've been able to manage our working capital on this basis, while selling higher volumes of fertilizer, while selling higher volumes of explosives in SADC and running our plants at higher levels than we have previously. And it's really, really a great outcome to see our supply chain, our manufacturing folk, our distribution folk in both Agriculture and Mining working together to optimize the end-to-end value chain. What has this done from a cash and a debt perspective. We've moved from a net debt of ZAR 1.8 billion at the end of last year to a net cash position, including lease liabilities, of just under ZAR 1.3 billion, an incredible performance. Two big drivers of that is the cash generated from operations, a really great number for us, and then the proceeds of the Oro Agri transaction. Excluding lease liabilities, our cash on hand was around ZAR 1.77 billion at year-end and really something to be proud of. I'll talk a little bit about capital allocation and how we're going to think about debt and cash and the balance sheet a little bit later. The next key metrics to keep an eye on is our CapEx. And we've managed our CapEx within budget. We've spent a bit more on maintenance, ZAR 125 million and ZAR 291 million on expansion. We mobilized a large new customer in BME, and some of that was expansion capital. And clearly, our CapEx, which was under the -- between the ZAR 400 million and ZAR 500 million as we've guided to, really great performance from a CapEx perspective. Going forward, we're targeting roughly ZAR 200 million of maintenance CapEx. And then we've set aside around ZAR 400 million or so of expansion CapEx. There's a few things we need to do in Canada and Indonesia and locally in terms of CapEx. It's important that all of our CapEx though meets hurdle rates that we've set, which is our weighted average cost of capital plus a premium. And all of our CapEx expenditure is in our core businesses, which is Agriculture and Mining. It's in greener technologies, and it's in sustainable technologies for the future. If I move to the nitrophosphate plant, and I think I was telling the team that this is the last time I'm going to put this amount of detail on the nitrophosphate plant. We were all incredibly worried about this plant 2 years ago. So we put in place a lot of belts and braces and management action to manage this plant effectively. And I'm proud to say we achieved our planned capacity of 60% in the plant. That tells all of you that there's still more capacity we've got and more value we can generate out of the plant, which is great for us. Our instantaneous capacities have reached 90% as and when we needed it to do that. And our executives are really focused on optimizing the nitrophos, the nitric acid plants and the granulators. And it's great to see how agile and how we're able to move things around to meet our customers' needs, but also to be more effective and efficient for us. So we've delivered the benefits from the plant. Our executives have also been able to find additional benefit from the plant, so this plant and investment, the benefit realization will exceed what we initially thought of. And we've realized -- we're realizing some of that benefit in future years. So I'm very comforted with where we are with this plant. And I'm certainly not worried about the issues we had a year or 2 ago and they're now solved. And you can see from the detail here. We've been measuring it. We've been monitoring it. And the focus now is to optimize the whole. The plant is functioning as planned. This leads me right into my next slide, which is the benefits we're getting out of our manufacturing optimization. So not only are we optimizing the supply chain and the sources of our raw materials, but we also have a number of projects on the go to focus on utility costs, to focus on electricity, to focus on optimizing water and efficiency in our plants. All of this is resulting in some really nice cost benefit and margin enhancement that we can point to in future years. And it's really good to also see the reliability and the productivity of our plants increase. We've strengthened our team in manufacturing. We have moved some of our senior folk from our group head office, our senior engineers into the plant and the benefits and the opportunities we see arising from that is really, really great. What that's led to, on the next slide, is really an increase in our plant utilization of 5%. And obviously, what we're saying is we're targeting more than that going forward. I think it's noteworthy to know that we've got 2 of the younger nitric acid plants in the country and, obviously, plants with very large capacities that have still got a lot of value to generate over coming periods. So I'm going to pause here and maybe hand over to Stephan. Stephan is going to go into a bit more detail into the specific results, and I'll come back just now with a few more thoughts. So Stephan, over to you.

Thank you, Seelan, and good afternoon to all our shareholders and everyone on the call. Next slide, please. Just before we jump into the detailed numbers, maybe just to give the shareholders a bit of insight into the numbers relating to the discontinued operation or the sale of Oro Agri. Oro Agri was consolidated into our numbers up until the 7th of January this year, which was the effective date. So what does it mean for the statement of comprehensive income. It gets disclosed on a one line as a discontinued operations, which means our FY '22 numbers get restated. From a balance sheet point of view, it will still be on a line-by-line basis in our comparative period, but it will be out in the current year. And then from a cash flow statement, it will still be on a line-by-line basis. So as we move forward, the next slide, please, into the detailed statement of comprehensive income. If you look at the revenue and the gross profit, that was fairly stable compared to the prior period. And that was a real resilient performance by the business in a challenging and dynamic environment, as Seelan mentioned as he has unpacked the macros. If we move further down the income statement, looking at the distribution expenses, there was nice savings coming through. And those cost initiatives came through all our business units. If you look at our administration and other operating expenses, you will see there was an increase compared to prior period. And there was a lot of once-off or nonrepeat expenses coming through, and I'll unpack some of them now. Looking at the administration side, what happened with the explosion in Beirut, there was a significant increase in our insurance costs. Also, the challenges that the Mining business faced in West Africa due to political uncertainty and COVID resulted in additional cost. And there was also additional restructuring costs coming through as well as share-based payments compared to the prior period. If I look at the other operating expenses, maybe just 2 noted ones to mention there is there was a release of the indemnification asset worth ZAR 40 million that was linked to the discontinued operation as well as a ZAR 37 million asset release of the fair value adjustment of the interest rate swaps as the company paid down the debt during the year. Overall, you will see on the face of the income statement, we've added additional disclosure, maybe to give more insight into the effect of hyperinflation, specifically, in our Zimbabwe operations. If you look at the operating profit before that impact, it's moving from ZAR 885 million in the prior period, up 16% to ZAR 1 billion this year. And if you take all of that into account, the group moved from ZAR 744 million, up 62% to ZAR 1.2 billion for the current year, which is a real strong performance. If you look at the finance expense, the finance expense was down 45% compared to the prior period. As I mentioned, that was due to the strong cash generation throughout the business and settling the debt. Maybe just 2 points to note on the cash. During the rights offer, there was a bridge loan put in place and there was interest capitalized during that period. That actually panned out as we've settled the debt and ZAR 65 million worth of the capitalized interest came through the interest line as well as the additional ZAR 67 million, as I mentioned earlier, on the unwinding of the interest rate hedges that was put in place with the debt. So if I look at the profit from the discontinued operation that was shown in the one line where we do mention there, the total profit on the sale amounted to ZAR 787 million for the sale of Oro Agri. And there was also ZAR 61 million worth of related transaction costs. That brings the total profit for the year from a group perspective to close to ZAR 1.4 billion versus ZAR 150 million in the prior year. As I mentioned, really pleasing performance. Next slide, please. If we move into more of the details in the segments, and let's start off with Agriculture, specifically South Africa. If I look at South Africa, the operating margin was up from 2.2% to 6.3%. And you can also see a strong growth in revenue despite the supply chain challenges that Seelan mentioned earlier. It was a strong improved demand due to the positive economic conditions as well as good cost control, the production efficiencies and enhanced operational performance that actually improved the margins from South Africa. Revenue up by 13%, and operating profit up more than 100%. If I look at the international business, we've added additional disclosure for our shareholders. First of all, if I can start off with the SADC business, you can see the operating margin up to 6.9% from 6.5% in the prior period. The biggest driver behind the SADC region was Zambia due to the contractual volumes that were secured during the planting season and the collections was actually well advanced at year-end. If I look at our biostimulant business out of Australia and Brazil, you can see the operating margin up to 25.2% from 16.2%, and that's due to the considerable growth in the AgriBio space in the international site out of Australia and Brazil. Maybe next slide, please. If I look at Zimbabwe, maybe to note the deliberate decision made by management in the last 2 years to not increase any sort of exposure from an Omnia perspective and to not invest any additional funding into Zimbabwe and the strategy is keeping water. The trading business will be fully closed down during the current year and also the discontinued operations, which will disappear. If I move then forward to our Mining business. Firstly, our South African Mining business. You can see the revenue was up 14%. The operating profit up 67% and margins increasing from 3.1% to 4.5%. And this was on the back of lower mining productions due to mine closures resulting from COVID-19 as well as the December shut, and as well as the really wet inclement weather conditions, specifically in the SADC region as such. Margins remains under pressure due to new entrants into the market. If I look at the international side, more specifically, our West African business was really hurt by COVID. That resulted in border closures as well as political uncertainty, specifically the coup in Mali. And if I look at my Protea Mining business as such, that was also lower demand for chemicals across the region due to COVID-19 and also a consequence of electricity supply disruptions, which really pulled our numbers back in the current year. Specifically in Protea Mining Chemicals, it was also the end of life of a significant contract. That added additional margin pressure into the business. If I then move forward to our Chemicals business, specifically Protea, getting the hard lockdown in the beginning of the year, the business was severely affected. But as we went through the year towards the end of the year, we could see some of the volumes coming back. We've got strong management actions and agility by the team, also to restructure supply chain. And you will see a big drop in revenue of 21%, but operating profit staying fairly stable and only reducing by 8%. But the pleasing sign is to see the increase in operating margin from 3-point -- 3% to 3.5%. If I then move forward to our Umongo business, again, revenue being fairly stable throughout the year. And that was on the back of securing of new business due to the supply chain constraints during H1 in the current financial year. Pleasing sign the improved in margins, up from 4.8% to 8%, and that was due to a reduction in operating expenses as well as a bit of tailwind from foreign currency movement. Next slide, please. If I unpack the margins, just to get a bit of insight, if we take into account all the nonrecurring expenses during the year, I've also stripped out Zimbabwe, which is quite a big mover, you will see on an adjusted basis, the operating margins for the year, if I take out the nonrecurring expenses, increases from 5.8% to 7% versus a 5% in the prior period. Strong performance from a group point of view and also on the top end of our medium-term target ranges for operating profit. If I take into account Agriculture, also the once-off movement going up to 8.6% versus the 4% in the prior period, strong performance, as I mentioned, by South Africa, but we can also see the big benefit coming through from our international business, enhancing our operating margins. If I look at the Mining business, which was severely affected during the hard lockdowns as well as in West Africa, you can see the adjusted operating margin sitting at 6.1%, which is in the low end of our medium-term target ranges. And if I look at our Chemicals business, also with the adjusted margins to 4.3%. Maybe just to note for the shareholders, nowhere in these adjusted margins that we adjust for COVID, and COVID had a severe impact on our Mining and Chemicals business. If I need to broadbrush the COVID impact on our Mining business, the 6.1% is closer to just north of a 7% operating margin level. And for our Chemicals business, it's closer to a 5% level. Next slide, please. As we then step forward and looking at the strong balance sheet where we closed off the year, maybe just 2 or 3 things to highlight. First of all, the working capital that Seelan already touched on, a really strong performance, reducing working capital by 24%. But that takes into account the effect of Oro Agri. So if I strip out the ZAR 488 million in the prior period from Oro agri, it's still a 13% reduction in working capital, really strong performance by the team. That led to the net cash position from a net debt position and the swing of ZAR 3.2 billion throughout the year. Next slide, please. Maybe just to close off the cash flow statement, leading from the balance sheet. Strong cash generation throughout the year of ZAR 2.3 billion, favorable and reduction of finance expenses and also good control of fixed asset and CapEx expenses throughout the year. The proceeds from Oro Agri also filtering into the investing activities. And then the good cash generation by the business as well as the disposal of Oro Agri resulting in settling the debt and the business ending the year on a cash position of ZAR 1.8 billion, really strong performance throughout the year and a strong balance sheet that set up the business for the future. I will then give it back to Seelan for the conclusion.

Thanks, Stephan. I think it's fair to say that this is an incredible performance by the team under some really tough conditions. And it demonstrates the delivery of our strategy execution. And I'm so pleased that we were able to do what we did in the last 2 years to deliver this. If we move to the next slide, thank you. Let's just talk a little bit about the future. So I think where we're going to is to continue making a profound difference in life. So protecting life and sustaining livelihoods, which we speak about quite often now in the group. We will continue to invest and grow our Agriculture and our Mining businesses. And those 2 businesses, we've said are core. We will continue to invest and grow in specialty chemicals and solutions which are aligned to agriculture and mining and then a few others that we've got in Protea and Umongo. And I think we will look for newer, greener technologies in those same areas that will enhance our returns and strengthen our business and will also link to our core skill set. As a team, we've got some really great skills and some really great folk that can be leveraged to do more. We have implemented a, I want to call it, a changed mindset. So we think about -- we want to think about things differently. We will continue to expand in new markets. And we've guided to those markets saying that in the mining area, it's Indonesia, Canada, U.S. and Australia. And in the agriculture space, it's largely Australia, Brazil and actually taking our humates [Audio Gap] the world, a coatings product, and our teams are doing really, really well there. So the Omnia of the future has to be more specialty, less commodity. All of that will lead us to higher margins going forward. And I think it's of critical importance that what we do will be based on creating and leaving a better world going forward. If we move to the next slide, so Stephan has mentioned the margins already. And the way we are KPI'ed and the way we run our business is to focus on operating margins. And I've just put the bars here, the same bars that Stephan showed in the previous slides. But in essence, we focused on generating long-term margins at a group level of between 6% and 9%. Long-term margins in Agriculture between 8% and 10%. Long-term margins in Mining between 10% and 12%. And long-term margins in Chemicals between 6% and 10% -- 6% and 8%. And I guess what you can see is that we've still got a way to go. This delivery, while it's good and something that we can all be proud of, what we have got are plans, executable plans to actually continue to improve these margins and continue to benefit from the projects, the different initiatives and the new businesses that we've already secured in some of the areas that will yield value in coming years. In terms of our resetting and growing, we will continue to drive our manufacturing synergies and optimization. We will continue to optimize how we think about our explosives and our agriculture business locally. And there's some more value that we will generate in the coming years from that. And we will continue to invest in the winning propositions in agriculture and mining. And there's a few slides in the deck at the back where we talk to the different opportunities, the different products and services in both mining and agriculture that will increase our revenue and our margin in the coming periods. I think from a balance sheet perspective, it's something we can be proud of. We've de-geared our balance sheet. And obviously, we sit on a bit of cash. We probably focus on being conservative. We focus on doing and restoring the company in a very steady manner. We promise certain capital allocation decisions. And hopefully, what you see is us delivering on what we told you we would do. And clearly, we're restoring a dividend, which I'll talk to on the next slide. Overall, by measuring us and our business on margins, we then have certain targets in terms of increasing our return on capital in the coming years. All of this needs to be done by investing in our people, caring for our people, growing our people and driving a very clear defined culture in our business. If I move to the next slide. So I'm sure shareholders, if we just step back a little bit and think about capital and think about where our company has come from over the last 2 years, I think we can say, we have executed on a good rights issue when we did our debt restructure and the focus on reorganizing our company has been done well. We've discussed what would be an optimal debt or gearing ratio for our business, and we said we'd like. And clearly, at the time of doing the rights issue, I think we were between 2 and 3x, and we said we'd like to whittle that down. And we said in the long term, we'd like somewhere between 1 and 1.5x. We don't believe our balance sheet should be burdened with too much debt. We are cyclical business, and we've got a long business cycle. But I think what we are seeing is a great track record of being able to manage that cycle and being able to manage the working capital, the CapEx and the free cash flow well. So we will continue to maintain a slightly more conservative balance sheet as the economic outlook is uncertain. And in terms of capital -- and obviously, there's no intention to maintain a net cash position in the long term. So when -- as things ebb and flow, we will consider when to increase -- or to reduce our cash and increase our debt. In terms of capital allocation, overall, firstly, we need to improve the return on existing invested capital. And I think we've got great plans to do that. We promised that we will manage capital allocation robustly and in a disciplined manner. And we'll continue to do that. So we will exit noncore businesses or businesses that don't meet our internal hurdle rates. We have got capital tied up in land, in buildings, and we are systematically exiting those when -- as the timing is right. And we will continue to invest capital in organic and inorganic opportunities that meet the hurdle rates in Agriculture and Mining. And obviously, those rates are returns above our weighted average cost of capital. Our cost of capital and our debt structure is now settled. So we've been able to model that, and we've got a view of where that is. From a distribution perspective, we certainly won't hold on to unnecessary cash when there's no reason to do that. So we will return that to shareholders in a prudent manner. And that's led the Board to declare a special dividend of ZAR 4 a share and an ordinary dividend of ZAR 2 a share. We've also guided in terms of a target ratio for ordinary dividend going forward. And I guess we will continue to optimize capital, and we will continue to build on the track record we've delivered on in terms of restructuring the balance sheet and managing the capital well. Maybe just at this point to note, we mentioned certain uncertain tax position in our financial statements. You will see a note under the IFRIC 23 section of the financial statements. The issue is obviously legally privileged and an issue that we have taken advice on. We operate in 25 countries. So there are uncertain tax positions that go back a number of years. We believe that we have been prudent based on the advice that we've got. And we've -- we are in negotiation to solve that matter going forward. And I -- we would prefer not to get into further detail in that because the matter is obviously disputed and legally privileged. And that has been taken into account when we've considered distribution and our cash position. If I move to the next slide. I think what you're seeing is the second year of Omnia's sustainable restructure and growth and a nice trajectory for our business. So the benefits of operating in the primary sectors of chemicals, agriculture and mining shows a high degree of resilience. I think our team have been incredibly focused on operational excellence, and we've got a lot more to deliver there. Even though we've delivered great result, we've got a lot more that we can deliver there. So we're particularly comforted by the ability to point to specific projects and items that will enhance margin, enhance revenue and enhance profits in coming periods, and we point to a few of them on the slide. We've invested in our plant in Australia in terms of capacity. And we will sell that capacity off over future years to customers. I think what we also will see is a very steady and robust approach to capital management. So we will safeguard our balance sheet. We will be robust in terms of investing and disinvesting. So where assets don't meet our hurdle rates, we will make the necessary difficult decisions around that and steadily improve our return on capital over coming periods. We've got some really unique competitive advantage, and I think it's something we can do a lot better in terms of telling everybody about it and commercializing that value. And I'm particularly excited to build and invest in our agriculture, our biologicals business and our mining business with all of the different technologies we've got there. So you'll see us take more of that to market. You'll see us talk more about it, and you'll see us commercialize a lot of those offerings. There's a few slides in the appendix of the pack that some of you might have seen, might not have seen that's got some more information on those technologies. And then I think overall, we will continue to diversify our business. So we will continue to diversify from a location perspective. You'll see some nice diversification from a commodity perspective in our BME business. And we are acutely aware of growth, growth on the African continent and agriculture and mining growth in different territories across the world. If we were to just move further on, obviously, we've still got an uncertain situation around COVID across and at a group level. We will continue to manage our supply chain optimization and manufacturing. There's border closures, there's supply chain disruption. And on a daily basis, even this morning, we're dealing with calls of different things moving around, and it's pleasing to see our people changing on an agile basis to deal with those issues. We will continue to implement our operating model, which will have some great benefit for our shareholders going forward. And then around the 3 businesses, Agriculture, obviously, there's a good positive agronomy conditions again this year. We see a nice demand for fertilizer, probably earlier than what's been anticipated, and our teams are hard at work to manufacture and supply that. We will look forward to hopefully another good planting season. We see great demand for our AgriBio product across the world out of Australia. And we prepared for that by increasing our capacities in that plant. And obviously, from an agriculture perspective, we've got a strong, strong brand. We know when to do what we do well, and farmers respect us for doing that. From a Mining perspective, we -- our large contract locally has now been implemented. So now it's just for all the value and volumes to come through that. We've also got some -- we've continued to expand in Canada, and we've got some great opportunities there. And our initiative in Indonesia also will hopefully be vetted down further this -- in the coming period and value will be unlocked there. We have won some new business on the African continent. It's been particularly difficult to execute on new business outside of South Africa during the lockdowns. So we're looking forward to getting some of these new businesses executed in the coming period. From a Chemicals perspective, our teams have put down some nice green shoots in new product lines and new more specialty chemical areas. And those will definitely be a value for us in the coming periods. There's a few examples here. There's a few examples later on in the annexures that you will see around specific issues there. And just in conclusion, if we move to the last slide, I think what you're seeing is an incredibly resilient performance. It's probably more than resilient. It's a really strong performance by the group in a very turbulent business environment with macros moving in all directions. The business being firmly on a reset and growth path now, a lot of fixes, a lot of worries of the past behind us, investing in our people and moving forward with a different mindset. And our emphasis is clearly on the long term. All of our people are committed to actually deliver long-term value. And all of our decisions are based on long-term growth for our shareholders, for our staff, for our customers, for our communities. And obviously, we play a large role in food security and economic livelihoods, and we'll continue to do that. We'll continue to do that in a safe and responsible manner, and we'll continue to expand our business internationally from an agriculture and a mining perspective. And I think I'm really proud of the track record and the resilience that the team has shown in these difficult times to return to shareholders ZAR 1 billion within a few years of being in a very distressed position is a really great place to be. However, that's not where it ends. Thank you all for attending. We've got a lot of hard work ahead of us, and we've got a lot of value to generate over the coming years. But we're pleased with our performance, and we look forward to the further engagements that we will have with some of you over the next few weeks. And thank you for attending. I'm going to hand over to Fred who will manage the Q&A for us. And hopefully, we will be able to get to most of them in the time allocated. Thank you very much.

Thank you very much, Seelan. I will go to the first question, which is from Stephan Erasmus from Avior, asking if you could please unpack the Omnia mining margins, which are currently at around 5.5% in the context of AECI's mining margin, which are closer to 10% for the past 12 months.

Okay. Thanks, Fred. I think, obviously, comparing those 2 margins are -- is difficult because we have our manufacturer that sits in our Agriculture business. So I think overall, what I would say is that the BME margin is not where we would like it to be. There's a chunk of abnormal mobilization costs and a little bit of a difficult international mining situation that's played out that's impacted the once-off margin. Our margin guidance for BME, certainly in SADC should be around 10%, Steph. And I've said before, that's how we've priced and thought about our business from a SADC perspective. And obviously, north of that from an international perspective. So when we think of businesses outside of South Africa and SADC, we'd like margins north of 10%. The BME management team are incredibly focused and I think they know exactly what's caused the margin reduction. And we have got initiatives in place to grow and restore those margins in the coming periods. I think what's important to note is we've secured the customers. So it's always good to know that the customers are there. What we need is the mining sector to come back. We need consistency in terms of demand and blasting. And that will automatically increase the volumes and the margins in the BME business going forward. This is the impact of the hard lockdown, the political uncertainty, the demurrage and the volumes not coming through as anticipated during the COVID period.

Thank you, Seelan. The follow-on question from Steph is around weighted average cost of capital and what your hurdle rate is for CapEx project?

Thanks, Steph. So we've settled our thinking around this quite nicely now. And broadly, we went a bit of a premium to our weighted average cost of capital. And our projects, now you've got some projects that are small and let's say, the ZAR 20 million, ZAR 30 million, ZAR 50 million, those projects we want somewhere between, I want to say, 15% to 25% return from them. And then there are bigger projects and projects that are in -- have got different risk profiles that we would take -- we'd go closer to the 15% or closer to the 25% or above that. So I mean I'm not -- I don't want to answer the question directly, but I would say, look, all of our projects somewhere between 15% and 25% is where we'd like to see them return. There's obviously -- yes, and I'll stop there.

Great, thank you. Did you want to add something?

No. I mean I just wanted to add that our core business also has to increase its return on capital. So we've got very clear defined plans. And Steph, the way we think about this is operating margins that will result in increased returns. We also will disinvest from capital that's tied up in areas where there's no return. And some of our executives have disinvested from warehouses, land, plant, property that is just idle. And then clearly, we've also disinvested from businesses where they don't meet the hurdle rates. And that will also -- so for me, Steph, it's about getting the current business to increase its return and making 100% certain, as we invest going forward, we've got the right risk premium for the investments we're making above the weighted average cost of capital.

Thank you, Seelan. Next question from Bruce Williamson from Integral asking instead of solar power plants, is there not a great opportunity to look at biomass power plants?

Yes. I mean, Bruce, we clearly not -- energy is clearly not our core business. So we've got various different things we're looking at. Mike Smith, our CEO of the Chemicals business, has done a venture with an American company to bring HydroPlus, a technology that uses hydrogen -- powers hydrogen fuel cells, and we've put that into a test phase with one -- with a large corporate and some hospitals locally. There are other opportunities that we look at and explore. So I think we will keep exploring them and looking for the right opportunity that works for our plants and our operations. We're not a producer of power [Audio Gap] for our business and our customers. But I do think there's a great opportunity, and our manufacturing guys have done well to optimize the usage of steam and power that we generate in Sasolburg, but there's still value left on the table to put in place some alternative energy that can keep our businesses. And I think a lot of manufacturers will hopefully start doing this, that will keep our businesses going during these load shedding periods. And we've had to do a lot of it already, and we'll continue to explore and do more going forward.

Thank you, Seelan. Next question from David Fraser from Peregrine, asking -- or first stating congratulation on the good results and asking what are you seeing from Transnet post lockdown. The hiring performance is very poor due to vandalism and breakdown and what is actually your current view on that?

So David, I think you're 100% correct. We have got immense, immense supply chain challenges that we've got to deal with on a daily basis, Transnet being one of them. I think the social unrest that you're seeing with trucks being burnt and protests being another. Obviously, cable theft is something that is quite widespread in South Africa and affects more than one sector. So preparing for this call, some of our folks were unable to dial in from home because of cable theft. So David, what we do is, Jacques who runs our supply chain has a full team of people that actually guide our product, our trains, our trucks through the border posts. And I want to say on the ocean, through the ports and on the train lines through to us. I've been particularly pleased by the way we've been optimizing that. We've had to reroute trains, trucks and ships to different ports. And whilst, I think, this is a significant issue that the country needs to solve together, I'm comforted that we've got mechanisms in place to solve them. You'd recall that our ammonia tankers, we own them. Yes, Transnet do pool them around and we do use their infrastructure to move them around, but we're intricately involved in those movements and the management of those trains. It is a challenge, David. If you can help government fix this problem, it would help all of us and probably increase GDP by a good few points.

Next one from [ Paul Weber from Rosendhal ], asking about CapEx and depreciation, which is significantly down compared to long term where CapEx was always ahead of depreciation. How sustainable is this?

Yes. Thanks for that. And if we look at our CapEx slide, it's something that, unfortunately, Francois is not on the call, he is one of those that's recovering from COVID. But that's something that we closely monitor. And what we've been able to do by increasing our focus on manufacturing, we've been able to get a lot more efficient on our maintenance spend. What Stephan has also done is some of that spend, there's maintenance spend in our CapEx budget, but there's also repairs and maintenance in our income statement. So I think what we've done is we've looked at that, and we comforted that with our new modern plants. We also employ a lot of our own engineers. So we do some of our own work. We comforted that, that where things are is sustainable. And you will see that we have -- on the CapEx slide, I actually had another bar, which was 2022. And you'll see that we put in place another ZAR 75 million for maintenance in 2022. So we've set aside more for next year in terms of maintenance. I'm still hopeful that the entire CapEx number of ZAR 600 million for next year, we will not spend because our track record says that we underspend on expansion and maintenance CapEx. So it's something we're acutely aware of and we monitor. I think we will never starve our plants of any maintenance or CapEx spend that's needed. We need these plants, and you can see after -- we've got a slide on the plant utilization. We're actually targeting higher plant utilization, which will automatically mean that our plants need higher reliability, which means we need more robust reliability and maintenance in our plants in coming years, which will result in higher margins and returns as well. So I think this is something that our manufacturing MD has got his arms around. And I think we have that under control.

Thank you, Seelan. Next question from David Lerche from Sanlam Private Wealth, asking about Slide 40, where you show that you have a fourth pillar planned for the group and asking if you found any actual opportunities? Or is that simply an idea at this point?

David, thanks for that. I think at this point, what we're doing is we're recognizing that there are certain opportunities that we can explore with the Board. Had a strategy session with -- in, I think, around March or April this year. And we thought about growth and we thought about where will growth come from, not in the next 3 or 5 or 10 years, but beyond that. And I think we recognize that with the immense amount of agriculture, mining and engineering skill in our company, that there are other possibilities where we could generate growth, either in our supply chain or the value chain that we already spend. We've got broadly -- if you say we've got ZAR 18 billion of revenue, we've broadly got an ZAR 18 billion worth of supply chain. We could eke value out of it going forward. So at this stage, it's in formulation and thought. And I think as our business strengthens, as we deliver better returns, as our people strengthen, we will explore different pieces there. And some of it might just be from within. It might be our kelp business that expands a little bit more aggressively than our humates business or it might be our humates business that expands a little bit more than our kelp business. So don't see it as something completely off the track to agriculture, mining and specialty chemicals. It could also be in our supply chain or other parts of the agriculture or mining value chain where we've actually got skill and value to add. But this is not something that we can touch at the moment. It's something that we're thinking about and exploring. And that's always good to have a little bit of innovation and a little bit of blue sky thinking, 1 or 2 of our engineers and our chemists thinking about different things. And when you explore that, the art of the possibility is really great. I think if any of those things germinate to something meaningful, I would be sure to come back to shareholders and talk about that.

Thank you, Seelan. A couple of questions from Siphelele Mdudu from Excelsia Capital. Starting with SA Agri. First, great set of results and congratulations to the team. How sustainable is SA Agri's earnings from the ZAR 350 million base?

Should I maybe keep going and trying to answer that? I think it's sustainable. I think bear in mind that this segment has our manufacturer and agriculture in it. There's a chart further back where we show the volumes. I've got our sales and marketing director on the call, and he's done an incredible job in terms of volumes in the SA market and the tough conditions where supply chain was constrained. So Siphelele, I think what you've got is the Agriculture segment has got 2 things happening. One is focused on the farmer, focused on monetizing and generating value from the front, from a volumes, a product mix and a margin perspective. But it's also got 2 executives in the operations, one heading supply chain being Jacques and one heading manufacturing being Francois, who are focusing on optimizing the back end. So I've got a high degree of confidence that the agriculture result is sustainable. You've got the nitrophos plant working well. You've got additional volumes coming through from BME, which will also benefit the manufacturer. So I'm confident that the outlook is sustainable in agriculture.

Thank you. Moving on to Protea Mining. You mentioned that revenue reduced as a result of end of life of a significant contract. Can you state which contract that was? And did you manage to retain it?

Let's not state the contract. I've got the -- our head of that business on the call, and he can check. I think that contract came to an end. But I think what I am comforted by is that the team have executed on another growth vector that will be able to fill that hole in the coming periods. So it might not be the same customer or the same product, but there's certainly plans we have that will plug that in the coming period.

Final one from Siphelele is around your medium- to long-term margin guidance. What is the time line for you to achieve that?

Yes. So obviously, from an agriculture perspective, we in the medium may be a little bit more already. I would say what we need is a bit of stability and recovery in mining generally and start exceeding these guidance. I would say, 2 to 3 years, that sort of space. So we put these numbers out a year, a bit ago. And we didn't expect COVID. I don't think any of us could have predicted COVID. And I think as Stephan has said, we haven't tried to normalize any of our margins for COVID. So we've just stuck to the margin guidance, and we are running our business on the basis that, as a management team, we need to deal with the COVID impact. So I think -- overall, I think we are well on track in terms of our medium-term guidance. And I think in the next 3 years or so, we should get to the long term, and we've got plans in place to do that. Having said that, obviously, the COVID issue, if you asked me a few months ago, I would have thought a few more million people in South Africa would have been vaccinated by now, and we wouldn't have seen the third wave like we've seen. But I think our -- we can see our plans. We can touch our plans. We can execute on those plans. Our long-term margin guidance is not something that's completely behind the sky.

Thank you. Next question from Itumeleng from Benguela Global Fund Managers asking, given that there were logistics restrictions on imports, did this benefit your agribusiness? And could we see a reversal of those benefits if that was the case?

I think the big competitive advantage for Omnia is that we've got a -- the ability to source ammonia locally and import. We've got the ability to source a number of our inputs locally and import them. So we've got a fairly agile supply chain. The other benefit is that our manufacturing plant sits in SADC, what sits in Sasolburg, but largely, it's got great access to the SADC region. So we can move things between Namibia, Zimbabwe, Zambia. We've got a chunk of flexibility with the plant location. So I think there are benefits that we believe we can unlock by having a great manufacturing environment. And you see it in our operating model slide where we talk about certain trade sales happening into the market. So we optimize whether we produce fertilizer, whether we buy fertilizer, we optimize whether we produce explosives or whether we produce fertilizer and what we produce at what point. And we optimize what we produce for Zambia, South Africa. And that is really the heavy lifting that Jacques and Francois need to do. And we believe there is value we can generate by supplying foreign businesses perhaps that don't have a source of ammonia nitrate in South Africa via some form of trade sale, but there's also opportunities currently where a lot of farmers who are dependent on imports, those imports didn't arrive. And they now will return to Omnia, perhaps order from us now, and that will enhance and actually secure our long-term demand against some of those cheap importers. But I think having said that, we don't go head-to-head with the cheap importers. Our Marketing Director will tell you that we are a lot more than a cheap importer. We -- our farmers are using our self-drive tractor technology. Our new geology concept goes well beyond just fertilizer. It's -- it goes into efficiency, into nutrient efficiency, water efficiency. And we operate hand in glove with our large commercial farmers. So yes, there will be some opportunistic value that we could generate by imports being problematic. There will be some long-term value we've generated. So we have seen where some of our competitors were unable to supply, and our businesses were able to supply, those have actually evolved into long-term offtake agreements. We saw that in our Umongo business where Umongo was able to supply into SADC. And those once-off deals converted into sustainable deals. And I think it's always good for customers to know that they've got a reliable, credible business with Omnia that has an agile supply chain that can supply through very difficult conditions.

Thank you very much, Seelan. There are no further questions at this point in time.

Thank you very much, Fred. And to everyone on the call, thank you very much for listening to us. I was hoping to get some of our management team to engage with you as well. But I look forward to meeting all of you in the coming few days or weeks. And please look after yourselves, please protect yourselves and your family through this third wave that we're experiencing. And thanks for your support and thanks for your interest in Omnia. Much appreciated.