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JOHANNESBURG (Reuters) – South African chemicals and fertiliser maker Omnia Holdings swung into a full-year profit in the year to end March, it said on Tuesday, after restructuring measures helped strengthen its balance sheet and boost earnings.

The company, which also produces explosives, posted headline earnings per share (HEPS) – the main profit measure used in South Africa – of 189 cents for the year ended March 31, compared with a loss of 97 cents a year earlier.

Omnia shares were up 3.39% to 29.00 rand by 0735 GMT, after rising as high as 31.00 rand at the market open. The Johannesburg All Share index was broadly flat.

Earnings before interest, tax, depreciation and amortization (EBITDA) for the year, excluding impairments, rose to 1.8 billion rand ($105.73 million) from 979 million rand a year before.

Omnia, which has battled a slowdown in the manufacturing and mining sectors and the impact of drought conditions, raised 2 billion rand through a rights issue and launched a restructuring plan last year to pay down debt and focus on higher margin products.

Despite coronavirus lockdowns in regions where Omnia operates, the company was able to withstand its impact due to an improved cash position and with the majority of its products and services declared essential.

“We entered into the COVID-19 pandemic with a strong balance sheet and a capital structure,” said Chief Executive Seelan Gobalsamy, giving the company “a very strong and stable foundation” to withstand the pandemic.

Net debt fell to 1.88 billion rand from 4.4 billion rand in the prior year.

Omnia said that during the year its mining division had experienced difficult trading conditions after power cuts caused several mines to halt output in December and January.

For its agriculture division, improved rain across southern Africa boosted fertilizer sales volumes, though this was offset by lower international commodity prices.

The company’s chemicals business was supported by improved restructuring efforts which resulted in a higher-margin product mix, despite lower sales volumes, it said.

($1 = 17.0251 rand)

Reporting by Tanisha Heiberg and Tumelo Modiba; Editing by Tom Hogue and Jan Harvey

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