Simplify the portfolio, compound the returns
#themes: A sustained improvement in earnings quality through structurally higher margins in Mining, disciplined capital allocation and portfolio simplification.
Omnia Holdings is a diversified chemicals group supplying essential inputs, services and solutions to agricultural producers, mining operators and industrial customers in over 40 countries. The group is vertically integrated along the ammonia value chain, converting ammonia into nitric acid, ammonium nitrate and downstream products used in fertilisers, explosives and mining chemicals. Through its Mining division, Omnia provides integrated blasting solutions and electronic detonators, while Agriculture combines fertiliser production with agronomic advisory, biologicals and soil-health solutions. The Chemicals division is being materially reduced or exited as part of a deliberate strategic refocus.
We resume coverage on Omnia following a multi-year strategic reset under the current management team resulting in the disposal of value-destructive assets, a disciplined exit from non-core Chemicals, a reallocation of capital towards higher-return Mining opportunities, and the repositioning of Agriculture towards advisory-led, precision and speciality nutrition solutions. ESG is embedded directly into operational priorities and management incentive structures.
Mining has emerged as the group's primary earnings and return engine, delivering structurally higher margins and increasingly accounting for the majority of group EBITDA. International expansion has reduced reliance on South Africa and improved earnings resilience. Agriculture remains a strategically important, cash-generative base, while the exit from Chemicals lowers volatility and improves capital efficiency.
Key catalysts include the ramp-up of the Australian and Canadian electronic detonator plants, continued scaling of Mining International platforms in Rest of Africa, Canada and Indonesia, and deeper penetration of higher-margin electronic detonators and blasting services. Furthermore, returns are now expected to sustainably exceed both the cost of equity and weighted average cost of capital, with further upside potential should leverage be introduced to accelerate mining ambitions. Although we believe that ammonium nitrate will remain the dominant oxidiser in commercial explosives in the near term, it's investment in Hypex Bio and access to hydrogen peroxide offers Omnia strategic optionality, productivity benefits and ESG differentiation.
FY26E earnings are expected to be constrained by already reported first half operational disruptions and transition effects. We expect a materially stronger FY27E as Mining International ramps up, the Canadian and Australian operations approach profitability and following the disposal of non-core Chemicals businesses. Strong cash generation supports ongoing special dividends over our forecast period. In FY26E, we forecast HEPS of 804c (+14%) and DPS of 472c (+18%), equating to a dividend cover of 1.7x. In addition, we forecast a special dividend of 300c, which in total provides an attractive dividend yield of 9.1%. In FY27E, we forecast HEPS of 992c (+24%) and DPS of 580c (+23%). Together with a special dividend of 350c, this provides a forward dividend yield of 11%.
Omnia trades at a discount to intrinsic value despite improving earnings quality, returns and capital discipline. Our valuation range of R93–R117 per share (upside of between 10% and 38%) reflects a transition into a structurally higher-return phase, supported by strong free cash flow generation and an attractive dividend yield.
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