Good morning, everyone, and welcome to Omnia's interim results for our 2024 financial year. This morning, I would like to call upon Bronwyn Murray, our Executive for Human Resources, who will take us through a safety briefing, and she will also share a safety moment with us. Thank you. Bronwyn?
Good morning, everyone. Just by way of dealing with our safety housekeeping, I just want to remind everyone that in the event of an emergency, please remain calm, and then when we have to evacuate, please proceed to the right-hand side of the building. My right, your left. Go outside at the back end of the building and proceed to the assembly point. The assembly point is marked with a zero, and that's in our parking area. Also, if there's anyone with a disability in the room, please assist them to get to the assembly point. When we get to the assembly point, please remain until we've done a roll call and actually indicated that it's safe to proceed back into the building.
This morning, I wanna talk to you about, really a phenomenon that actually plagues all of us, and it's around year-end fatigue. As we know, as the year winds down, the last two months of the year are quite challenging, and in certain instances, we sometimes become really restless, anxious, fatigued, in terms of wanting to really go on a break. And again, just reminding ourselves what we need to do in those particular instances. Within the Omnia environment, in particular, I mean, we operate in a hazardous environment. Within our plants, we've seen people sometimes become less mindful of where they are, and we've seen slips and trips. And we can understand how serious that can become, especially within our manufacturing environment.
Being mindful of what people are doing and encouraging our teams as well, where we see people are fatigued, especially with the long hours that we work in terms of some of the shifts. We are encouraging people to be mindful of that with their teams, making sure that people have properly rested. In certain instances, putting in place second-in-charge, a person that will be there to assist with the standby. And also, just apart from just the physical side, I think, be cognizant of people who are really anxious. There are various issues that people are dealing with at this particular point in time, and we wanna—we encourage our staff to reach out in terms of the support we've got in different platforms.
We also then want to encourage people to just look at how they manage themselves in terms of self-care, looking at exercising, proper diet as well, which helps with the immune systems, and not being shy to actually reach out for support in terms of EAPs. Most of you sitting here would come from organizations where there are EAPs, wanna encourage that as well. As part of the Omnia safety mantra, we've got something that we say: "See something, do something, say something." And in that regard, want to encourage people within Omnia and outside of Omnia, where you see people struggling, dealing with being overwhelmed, to push them to... Not push them, but actually support them in terms of getting the necessary support, but also encouraging them to live healthier lifestyles, taking time to exercise and to rest.
And in this particular point, we want to encourage people to be their brothers' keepers, and as part of our value system, being safe is key. So I want to encourage that for all of us in this year-end period. Thank you.
Thank you very much, Bronwyn, and I hope that we all heed the safety message. I would now like to introduce you to Seelan Gobalsamy, our CEO, who will present our interim results.
Good morning to everybody. Good morning to all of our board members, our shareholders, and good morning to all of you on the webcast. Thank you for making the time and being with us this morning. When Bronwyn said, "In the event of an emergency, please remain seated," the only thing she missed is oxygen masks will not fall from the panel above you. So, you know, hopefully, you won't need that. I'm gonna talk you through our results. There will be various people coming to join me on stage, and I think what we've tried to do this time around is to give you a little bit more information, so a little bit more detail, a few different drivers and levers in our business.
And we will spend a bit of time on some of those new slides and some of those some of the new data that we're providing you with. This is a very auspicious occasion for us in that it is our 70th year anniversary. So we said that at our June result, and we continue to mention that, but for our staff, we have a 70th birthday party happening in two weeks' time. So I think it's the second or third of the Saturday, the first Saturday of December. And I think it's quite a proud moment for us.
It's quite a proud moment for our just under 4,000 people, our board, and our shareholders, to celebrate our group making this profound difference that it makes in the lives of so many millions of people across the continent and across the world. And hopefully, what you will see today is how, firstly, we've reunited our business with its purpose. You know, we've rolled out this new purpose throughout our business units and across all of our regions, innovating to enhance life and to create together creating a greener future. And you see how we have underpinned ESG, not only in what we do in our production in our supply chain, and in our facilities, but providing those unique value propositions to our customers, to our farmers, and our mines.
A number of the investments that we've made have a strong ESG underpin, and our Nutriology concept and processes in agriculture, you know, our investment in Hypex Bio in BME, some of our advanced detonators that allow you to do larger, more complex and more detailed blasts, are all aligned to a very, very strong ESG impact. We know that what our business does, it has a profound impact on food security. For those of you who have been reading up and thinking about that, you know, the world needs to feed four to five times the amount of people in Europe over the next few decades due to the population growth in Africa.
So it's very, very important to us that we continue to make this positive difference, that we continue to invest in the right technologies, the right value propositions, to ensure the sustainability, not only of our business, but also of our planet. Just a quick highlight of our business. What you're seeing in this six months being reported is another period of disciplined execution of our strategy that has been done in very volatile, declining commodity prices. So we expected the commodity price decline, which we saw in the last half of our financial year, to continue into the first half of this year, and we took a whole host of different actions to mute the impact of that falling prices on our revenue and on our earnings.
What we will share with you today is how that falling commodity prices impacted our business, how the diversification of our business supported that, how volumes were impacted, how GPs were impacted, and how we've performed very, very resiliently in a very challenging environment. Having said that, safety is of paramount importance in our business, and we've said previously that no ton of fertilizer, no ton of explosives, or no can of chemicals is more important than anybody's life and anybody's health. We continue to make strong, strong progress in our safety stats, our RCRs, and Ditebogo is gonna talk about that just now. We continue to show a progression made on a number of our ESG measures, and we'll show you that a little bit later.
What we have been able to do in a very, very challenging macro environment is the Omnia Group has continued to ensure security of supply to our customers. Our farmers and our mines have benefited from the deep investment in our supply chain, have benefited from the deep investment in our manufacturing facilities, and we've been able to not only supply our customers, but also new customers, and been able to sell product on a wholesale basis to ensure the agriculture sector has the inputs it needs, and the mining sector have the explosives that they need. We see very strong growth and a strong performance in our mining sector, with the profits being up, and we see a resilient performance in line with our expectations in the agriculture business. From a balance sheet perspective, our balance sheet remains strong.
What we have done is we focused on giving away on the income statement, in some instances, protecting what we have, and actually focusing on, maintaining and protecting our balance sheet. So an incredibly strong cash position, at half year, ZAR 1.6 billion, in a net cash position, and clearly, we didn't dip into our facilities and facilities of ZAR 4.5 billion available, should we need it. From a revenue perspective, our revenue is down. I think we've seen commodity prices go down, by more than 50%, depending on which commodity you see. We'll talk through what lifted our revenue in different spaces later. Our profits are down in line with that, and our HEPS, also slightly down in line with that.
A very strong cash position, net asset value up, and our returns slightly up, so our balance sheet in a very good and healthy space. I'm gonna pause for a minute now and hand over to Ditebogo Malatsi, who's just gonna talk you through our safety stats and our ESG. For those of you who don't know Ditebogo Malatsi, she's our Group Executive responsible for sustainability, safety, and I thought it would be great for her to let me breathe a bit and talk through the next few slides. So thank you very much.
Good morning. We've got people joining us online, so just good afternoon and good evening from wherever you're joining us. I think I actually have the easy part of today, because I have the privilege and honor of just sharing Omnia's safety and ESG progress of them over the past number of years, and specifically over the past six months. From a safety perspective, as Seelan already mentioned, safety is very important to Omnia. I'm sure you can imagine that we work with very big machinery, we work with very dangerous chemicals, very dangerous gases as well. So it's important for us to continuously keep our eye on the ball, to ensure that we don't hurt people, to ensure that we don't hurt communities, and...
To ensure that when we're on the road, which is becoming increasingly difficult considering the infrastructure challenges that we facing in a number of specifically Southern Africa, which is where we are dominant, we need to be extra careful. But despite this, we've seen rather an improvement in our Recordable Case Rates and our FER Rates. So those two measures, or rather indicators, they measure our, I guess, our ability to keep our people safe, because the one is an injury rate, which has decreased. The second one is our ability to manage and prevent the release of gases and chemicals, because as you can imagine, that can have a terrible consequence, not only on our people, but the communities in which we operate as well.
But I think to say that I need to say this, that safety is a collective effort. So our staff members, our contractors on our sites, our management, continue to focus on preventing and responding to safety incidents, because it can have dire consequences, not just for us, but for the communities in which we operate. Just moving on to our overall ESG performance. We've seen exceptional progress in the past couple of years, and this is testament to some of the investments that we've made, in our renewable energy and the recycling of water, and the improvement in our carbon emissions systems. Our emissions continue to reduce.
We've doubled the collection of used oil over the past, whether it's three years, and I think just to put that into perspective, in the first 6 months of this year, of our financial year that is, we collected 13 megaliters of used oil. A liter of used oil can contaminate and pollute up to 1 million liters of water. So essentially, that means by us being able to collect and use in our day-to-day production processes, we've been able to prevent the potential pollution of 13 trillion liters of water. And just while we're on the, water perspective as well, so we've increased our recycling.
You would have heard, I think it was the end of last year, that we commissioned our reverse osmosis water treatment plant at our Sasolburg facility, and since commissioning, we've been able to recycle three times more water from last year to this year. And on the renewable side, we commissioned last year a 5 MW solar plant at our Sasolburg facility. We've gone on to construct the second phase of that solar plant, and just the first phase of that solar plant is operating at peak, and it's actually exceeded the 10 MW that was initially projected.
And because we are dedicated to increasing the use of renewable energy as part of our production processes, we have allocated capital for further investment in renewable energies, and we've commissioned two smaller renewable solar plants at two of our manufacturing on the mining side facilities, so that is in Mpumalanga and Gauteng. The next slide, I'm not going to go into details, because I think on the left-hand side, I've spoken about what we are doing internally just to increase our renewables, to protect potable water, and to reduce our consumption of water. What I would like to focus on is: what is our ESG customer proposition, both on our mining side and agriculture side, and I think Seelan touched a bit on it.
From a mining—from an agricultural, rather, perspective, we have our Nutriology solution, and this is one of our flagship products or solutions that we see as being able to provide our agriculture customers with an end-to-end solution for to be able to support the efficient use of water and nutrients in their farming operations. But just to extend that further, we're seeing an increase, and this is specifically globally, in the interest in biostimulants. And our AgriB io business is an answer to expanding not just from our traditional Nutriology solution, which is not traditional at all, because it is, I think it's, it's one of the leading solutions. But just to extend that a bit further, to say in the rise of international pressure against the use of NPKs, are there alternative biostimulant solutions?
And that's why we're driving and expanding that business. From the mining side, our answer to Nutriology is our BLASTALLIANCE solution, and this basically increases precision blasting for our mining customers. And what this means is, because you can blast more precise, you can extract more minerals, you can have a less impact on the environment, less impact on your grounds, less shaking around where you're blasting. But we are furthering this with our investment in the Hypex Bio our equity stake, minority equity stake, that we have announced a couple of weeks ago. And this, what this does, is means we're able to support some of our customers to further reduce their carbon footprints through this when you're comparing this to the traditional blasting methods.
Our ESG propositions is not only limited to what we do internally and for our customers, we extend this to our communities as well. For a number of years, we've committed to giving back to our communities with a focus on food security and education. This remains the same. We started a number of projects a number of years ago, focusing on innovative and resource-efficient food gardening programs in communities. We're able to deliver 10,000 of those to 10,000 households in the past year, and we've committed to doubling that, but extending it also where it makes sense to community members who are benefiting from this program, to be able to actually make an income out of this. And just on the education side, I'm gonna touch on two programs that are agriculture and entrepreneurship focused.
The one is focused on learners that are living with disabilities, and this is teaching them how to produce food and find market for the food... and find markets to be able to trade their produce. And then the second one, which is a training facility that we've constructed in our main manufacturing facility in Sasolburg. We've been constructing it for a number of years, I think it's about two years now, and we're just really proud to say we've finally been able to enroll our first cohort of students.
The idea behind this training center is, in addition to it being a training center, there is going to be a processing hub that should, in time, as we develop and improve, this training center, help be an entrepreneurship center also for, food gardeners in the communities where they come, can come and process their food and find their, I guess, access to markets. I think this is my story. I think we might have time later on just to go into questions and answers for those that have. But I'm gonna hand over to Seelan for the rest of the business update.
Thank you. Thank you, Ditebogo, and I think it's very important to us as a business to do what we do and do it well for all of our stakeholders. And I think it's really proud for us to be making the investments and to be putting in place the initiatives we are as a business. So if I go into the difficult part or the heavy lifting of the day, and I'm glad that Ditebogo speaks a little bit less than me, and Stefan also speaks a little bit less than me, so we will try and stick as much as we can to time. Let me talk a little bit about where we are from a strategic perspective.
So, for most of you that have been following us for a while, you know that we've spent a bit of effort on stabilizing our balance sheet and our company, broadly in 2019 and 2020. We then went on a process to invest in our core assets and decide what is non-core. We disposed of Umongo. Over the period, we also looked at the offer we got from Oro Agri. We did a rights issue, and we shored up our balance sheet and we refocused our company on agriculture, mining, and chemicals. We did, at the time, say that we've got a lot of heavy lifting to do to improve our margins, to improve our agility, and actually put us on a path to increase our return on capital.
I guess, where we redesigned our operating model, and we did a few other things. I guess, where we find ourselves now is actually focusing further on our customers, expanding and diversifying our operations locally and globally, and focusing on actually growing our market share. Focusing on those unique value propositions to our customers that will make a profound difference to them, and making sure that we have those propositions that are globally competitive. And Ditebogo spoke on one, which is Nutriology. We fundamentally believe that is a globally competitive proposition we've got. You see us investing in Hypex Bio, which we'll talk a little bit later about, you know, and you see us continuing to make great strides with our double salt emulsion in BME, with our detonators, our AXXIS detonators in BME and others, and win new contracts and new market share.
So we are firmly in this, renew and grow and, continue to diversify. We will do that in a very responsible way in terms of ESG and future-proofing our business, and we will be very responsible with capital. So I think, you know, never doubt that our strong capital position will cause us to do things that are not carefully, considered. We implemented a new operating model to unlock, this value and this growth, and we've been on a path to, to embed that, across our business. Some of that is embedded, well, and some of that, there's still more progress to be made.
I think what's more pleasing is that from a growth perspective, we're starting to see the impacts of the seeds and the new investments that we have made over the last few years. So this year, if I start with our mining business, you will see profit coming through from our Indonesian joint venture and our Canadian joint venture. Last year and the year before, you heard us talking about doing something in that space. Today, we show you how we're unlocking the value there. You also see us making a 10% investment in Hypex Bio, which is a Swedish-based company that provides a greener, cleaner way of blasting.
You hear the investments we've made in our AgTech business around robotics, around precision farming, around AI technology, to be more precise in the way farmers use chemicals, water, and others. We fully understand balancing the move to greener technologies, while ensuring food security and adequate inputs for farming in doing that. Our Agri Bio business remains a very important part of our group and an attractive proposition, and I'll talk a little bit about that later. We certainly believe we can continue to extract value by continuing to execute on the strategy that we've put out before. What has happened around the world? So, you know, what is the context that we've delivered these results in?
I think the first thing to state is that these results are delivered in falling and volatile macros. The geopolitical issues, if we step back, to COVID and supply chain disruption and then the Russia-Ukraine issues, you know, we saw commodity prices elevating. We saw a number of countries across the world locking down imports, exports, you know, becoming very insular. Commodity prices then peaked, probably, towards the second half of our last financial year, and since then, we've seen them come down, and we'll put up a few slides later. That's resulted in volatility for us. We've certainly got a long business cycle, and I think I just wanna remind all of you that the Omnia business cycle certainly spans across the financial years and financial cycles.
And you'll see a lot of the data we're giving you today, you know, we're talking across those cycles, and we're trying to explain to you how our businesses, how our business gets correlated and how it's decorrelated to these various commodities. But what we've seen is a massive increase in commodity prices. We saw high commodity prices, and now, and then we saw a decrease and then a further decrease, and our business still continues to perform resiliently. Clearly, the second big issue we're watching is climate change. So for those of you who were in Midrand, in South Africa last week, you would have seen the hail. You know, that's not where climate change starts or ends. But what we do know, you know, climate change is something that is critical to be aware of.
It's something critically to think about, and the alignment of our propositions, the alignment of our ESG drives, you know, are all underpinned to do good for the environment. Having said that, climate change also disrupts. It also causes supply chain disruption. It causes volatility and uncertainty in how we plan and how the demand looks, and that's something that our supply chain folk have had to be very, very agile in this reporting period. We also see persistent sociopolitical issues. So, you know, not only globally, which disrupts supply chains, but also locally, which disrupts supply chains, which causes us to have to manage our product, our working capital, and our costs differently. Locally then, we've had the manufacturing sector decline.
We've seen issues with constrained electricity, issues with our ports, issues with the rail, and sociopolitical disruptions on the road. You know, these, sort of, the bottom three issues have acutely impacted our chemical sector, and you will see how Protea has been significantly impacted by those issues. All these issues then clearly drive what are these volatile prices? We've put out these two charts. You will find them in the appendix of the deck in large scale. So we've sandwiched them on one page here, just in the interest of space. But if you go to the back and you wanna see a bigger picture of them, you'll see them at the back. What we've demonstrated to you here is how our business has been performing over a number of years.
You know, what has happened to the commodity prices, and you will see how we correlate that a little bit later to our GPs and our performance. The first thing to say is that our business has performed well in lower commodity prices. It's performed well in volatile and higher commodity prices, and now you see us performing according to model in a massively declining commodity prices, price, and then the commodity prices normalizing a little bit as we've gone into the planting season in the Southern Hemisphere. We have not seen this level of change, you know, probably in the last 15 years. One of our finance people looked and said, "When did we see this sort of change?" And we saw, we saw it 15 years ago, and at that point, our business made a loss.
I guess what that, what that tells you is how important it is to manage our balance sheet and protect our balance sheet. You know, shore up our working capital positions and make sure that when these geopolitical issues affect prices, our business is sustainable through that. What we've also done, you know, most of our shareholders look at ammonia and urea, and you can see how we perform and how we've broken some of the correlation between our overall performance just being linked to this. So, you know, if you say prices went down 19% in the second half of the year and 58% in the first half of this year, you know, our revenue didn't go down 58%. Our revenue went down differently.
That's testament to our diversification strategy, that's testament to our, the value add in our agriculture and mining business, and that's the element of the decommoditizing of our products that have come through. I think the second commodity we wanted to put up for you was phosphate rock. And really what we're showing you there is the benefit we've got of our nitro phosphate plant. You know, we have an ability to add value into that space and to generate value further value for our customers and further value for ourselves so that we are not just correlated to ammonia or urea prices. If I just step ahead, what has this resulted in? Our revenue is down 12%.
Our gross profit in line with the revenue is down 20%, and our profits are down 34%. You see that impacting our operating margin and our earnings per share. I guess what we focused on heavily was to protect our balance sheet, and on those indicators, you see the opposite. You see our working capital very well managed, 22% down. That could have been a better position. We chose to take certain stock positions and debtor positions in certain territories, and we can get into that detail a little bit later. So, so maybe that, you know, maybe that's a little bit better than what you see there. And our cash position at ZAR 1.6 billion, which is well managed, and it talks to the strength of our financial position.
Our net asset value, obviously slightly up. So what you see is a fairly resilient performance overall in our group in a very, very challenging macro environment. So let's talk a little bit about that operating performance and talk about gross margin. So a few of these slides are new, they're slides we haven't done before, and I think our team has worked quite hard to extract some of this. You know, what we've done here is we've correlated broad brush, so, you know, there isn't perfection here, but we've correlated, you know, what the ammonia and urea prices done over a few reporting periods, and what our operating margin and GP margins have done.
I think what's important to note is how we're performing in massive declines in the ammonia and urea prices. Our GPs went in the last six months, not this one, the prior six months, down to 16.2%. With continuing falling prices, we've now normalized back to 21%. So that's giving a sense of, you know, back to normalization around this falling trend. And you can see how in previous cycles, when we've seen these downturns, our business performed very differently. So you can see the diversification coming through, you can see the benefits of our supply, our agile supply, manufacturing, and demand planning. So a very robust performance. We're wanting to show you that we've changed the way our business operates.
We've obviously, in the current period, also seen some additional volumes coming through, which has negated a little bit of a GP and an operating profit impact. Obviously, at a group level, the diversification of our different businesses, which you'll see as we get into the detail with Stefan a little bit later, has also offset some of the impact of the commodity prices. I guess the story here is a very resilient performance in what is some incredibly volatile and declining prices that we haven't seen for probably 15 years or so. What have we done to perform this way?
We certainly have certain cost initiatives in place, and the group has done well, the management has done well to execute on that, and our working capital has been well managed. So even at its simplistic form, you know, if we had chosen to take bigger risks in that falling market, and bigger stock positions, and try to leverage up our income statement too much, you know, we would have seen a deeper impact in the balance sheet. We would have seen deeper stock write-offs. And I think what you can see here, you know, the working capital is well managed, and the balance sheet is well protected through the downturn.
What's pleasing for me is, we always said, you know, our business must perform in flat commodity cycles, in increasing, in reducing, in volatile, and, you know, we perform fairly resiliently in a downward cycle. We continue to generate cash, and you've seen, you know, you can go and do the various calculations and see what that means. We continue to invest in CapEx. We continue to invest in infrastructure, so we've been able to buy the 10% stake in Hypex Bio. We've been able to invest in more rail wagons, you know, and solar in plants to assist the sustainability of our business. From a segment perspective, let me maybe start with chemicals.
I think the chemicals segment was the hardest hit in this half year with the changes and the specific issues we saw in South Africa, the manufacturing sector, the rail logistics, the road logistics, and the port logistics. We also saw prolonged shutdowns from some of our key suppliers, which resulted in shortages of inputs, and we saw an immense slowdown in that business. So, a very stark decline in that business. We remain committed to that business, and I think we remain focused to take the necessary action needed there to restore that business to a more acceptable level of product profitability.
Obviously, that business is now outside of its target margin guidance, and the management team, we've made a few changes, and we will continue to get that business back on, back to model. We always said we want that business managed to a model, and we'd want—and we want, at some point, a strategic partner in that business, and I guess that's where we will continue to go. From a mining sector perspective, our mining sector has performed incredibly well. So, you know, the margin, 11.1%, you know, ahead of where we expected it, and we're pleased with that. It's been supported by profits from the Mining Chemicals business, and it's been supported by profits from our international expansion.
Both Canada and Indonesia are profitable, and those profits are coming through. Stefan or Tanya? In fact, I think there's a deck at the end of the slideshow somewhere that will tell you how we are accounting for some of those investments. So I think a very, very pleasing performance from BME and mining chemicals and, you know, growing volumes, growing profits, both in South Africa, international, and in the mining chemical side. And great to see the margins going to where we want them to be. There's been some support of some new business that we've got there. Also, some more efficient and effective management of inputs, like used oil, and then great to see the international operations making money.
From an agriculture perspective, and bear in mind, our agriculture perspective has all of our supply chain and our manufacturing in there, so it is the one that will be the most impacted by the commodity changes. It'll be the one that's most impacted by the GP changes. And obviously, what we're seeing is a decline in margin out of our range, margin pressure. You know, if we look where we are currently, there's good agronomic conditions. You know, we're well placed to deliver into the planting season, and we're doing that. And we believe there will be a recovery going forward, but I'll talk to that a little bit later. Our AgriB io business was also impacted by lower volumes.
We saw volume growth in all of our territories where our Humates and AgriB io business is involved, except two, and those two territories had a slowdown in volumes due to specific issues they faced. And that's resulted in a bit of a slowdown in that business. Obviously, the rest of Africa performed well, and you'll see that in the detail. That's resulted in the Omnia Group obviously at half year being a little bit below our margin guidance. And bear in mind, our margin guidance is full year, so you know, a lot of the performance you're seeing is in line with our business cycle and is what we're expecting. We saw overall you know, electricity, logistics, disruptions, and social political issues affect all three businesses.
We saw a decline in the mining sector. We all know how the logistics has impacted that sector. And what we've been able to do, which we're incredibly proud of, is we've been able to continue to supply into all the agriculture and mining customers we're involved in and more, and we'll talk a little bit about that later. So from an EBITDA perspective, this is where we are relative to prior years. An incredibly resilient performance for us under tough, tough macro conditions. I think these are the toughest conditions we've experienced in the last four or five years, and we continue to perform well. You know, from a cycle perspective, you know, we've moved very much to a normalized agriculture cycle.
So, so if you go back to, you know, 2018, 2017, you know, those years, where you saw a, a, slow, cycle in the first six months and more coming through in the second six months, you know, that's the cycle we're into, a very normalized cycle. You know, so hopefully, we will continue to keep our shoulder to the wheel, to, to continue to progress this EBITDA in the right direction going forward. And we'll talk a bit about that. Working capital is really something we can be proud of. You know, I mentioned earlier that we took a, a, a stock and debtor position, in, in one of our businesses, so the position probably could even look a bit better than this.
But I think our team have done really well to manage working capital carefully, to think hard about the stock position versus the income statement and commodity risk. So a really good performance there, you know, which has resulted in strong cash, and our working capital continues to be very prudently managed. I guess that then filters into our capital allocation, and we promised you that we will be disciplined with capital allocation. We continue to do that. You know, our business is cash generative, and we will continue to focus on paying sustainable dividends. We will continue to deploy capital to protect and grow our business.
We will continue to deploy capital in line with our stated objectives of growing our agri international business, growing our mining international business, and where we see opportunities to protect and grow our local business and our traditional businesses, we will also do that. In this period under review, we commenced our share repurchase program, and we bought roughly 480,000 ZAR worth of shares for about ZAR 47 million or so. I think what you're seeing is an incredibly resilient and strong balance sheet. What this does do, it allows us great optionality, great flexibility to deploy capital as and when we need it.
And we did say that we will not, you know, keep a lazy balance sheet into perpetuity, but please bear with us, you know, when we, when we've made certain decisions to run a strong balance sheet, because we believe, you know, that is in, that is in the interest of a business with a long business cycle, which plays across, different years. So I think if you look at all of this and you project it, you know, clearly, you know, we're seeing a good level of free cash flow and cash projections, going forward. So I'm gonna pause there and hand over to Stefan, who's gonna go, into a little bit more detail into the financial performance, and then I'll come back at the end to talk about the outlook.
Yeah, thank you, Seelan. Good morning to our board, our shareholders, stakeholders, and all our employees from around the world. Maybe just before we jump into the numbers, excuse me, just a quick update on the SARS matter. As we discussed, during our year-end process, SARS confirmed that the matter was appropriate for the ADR. ADR is basically just a process then to find a solution to bring the parties closer together. The ADR process is roughly set out to be 90 days, but due to the complexity of transfer pricing matters, you know, that process could take a bit longer. We're currently busy engaging with SARS on the matter, and the matter has not been concluded as yet, but we're still committed to find an amicable solution.
If through the ADR process we can't find an amicable solution, then the next step will be to proceed to the appeal process. Will there be more opportunity to engage with SARS to find a solution to this matter? Maybe just jumping into the financial numbers. Just quickly to highlight specifically on the Zim. As we've disclosed with our financial year-end, in Zim, we've changed the functional currency effective from April 1st. And that will result in obviously the disproportionate Forex movements will be slightly muted into our numbers. You can still see it's still baked into our comparative period from that perspective.
So from a revenue point of view, you can see a decline in revenue of 14% relative to the prior period, and that was mostly due to, as Seelan mentioned, due to the commodity price environment, which was offset by the higher volumes that we've experienced in agriculture as well as in mining. Also supported by the depreciation in the currency relative to the comparative period. From a gross profit margin point of view, similar to what Seelan just touched on, you can see the contraction in the gross profit down to ZAR 2.1 billion, and that was mostly due to the significant decline in commodity prices we've experienced over the last three quarters. So it was the back end of our previous financial year, as well into quarter one of this financial year.
What we could see is, obviously, the commodity prices were starting to stabilize and a slight turn towards the back end of this financial year, this half year. From a distribution and admin point of view, you can see relative to the comparative period, that was really well managed. Taking into account, it was in a very high price, high inflation environment, where we've actually managed those costs, and that was really good management actions that I'll touch on a bit later. Maybe just moving further down, if you look at the net other operating income, back to the [operating] o ptimum is maybe two, two points to note.
First of all, we had a commodity hedge gain worth of ZAR 9 million that's baked into that number, as well as the sale of carbon credits, which, which also sits in that number, which amounts to ZAR 19 million. From an MNK perspective or the joint venture, you can see that that's accounted on an equity basis. We disclosed, as Seelan mentioned, further down in the deck and the next slides, more specifically, relevance on that. But specifically, you can see a significant contribution already by that business, which is ahead of our expectations. That is effective from the end of May. So it's about four months that's actually baked into our numbers currently. That resulted in an operating profit of ZAR 6.5 million, which is down versus the ZAR 6.6 million in the comparative period.
But again, if I then isolate Zim, Zim's impact in the prior period was ZAR 264 million. We've also further down in the deck, we give additional disclosures relative to the ZAR 50 million in the current period. And if I just isolate the prior period, the margins, taking into account the excessive high commodity price at the time, was at 9.2% from that perspective. Then maybe moving further down the income statement, from a tax perspective, the effective tax rate reduced relative to the comparative period to 29.9%, where in the comparative period, the effective tax rate was at 30.9%. That resulted in an operating profit of ZAR 487 million for the six months, and which is 8% down relative to the comparative period.
Then maybe just jumping into some of the segments, and what you will see, as Seelan already touched on it, the diversification coming through our business as well. As mentioned, in agriculture, and specifically Agriculture RSA, the high commodity prices relative in the comparative period and the sharp declines continuing into this quarter, into quarter one of this financial year, obviously, can be seen in the agriculture segment, with revenue down by 20% and operating profit down by 65%. As I mentioned, the commodity prices, that was slightly offset again by the higher group volumes in Agriculture RSA, due to the good economic conditions that we experience at this stage.
Furthermore, our manufacturing and supply chain throughout this volatile environment that we've already touched on ensure that we secure security of supply across all our segments in agriculture, mining, as well as into chemicals. The operating expenses, specifically in the agriculture, SA, was really well controlled, and we're progressing well on our cost savings initiatives that I'll touch on a bit later. From an international point of view, the revenue increased by 15%, while the operating profit was down 3%, again, driven by higher volumes in our SADC region, in Zambia, as well as in Mozambique. But what we also experienced is margin pressures, specifically in the SADC region, due to the lower commodity price environment that we experienced at that stage, as well as the introduction of additional competition into the region.
From an agriB io point of view, the agriB io point of view is that, the volumes were lower. And that was just due to slower volumes from two of our major customers, specifically playing out in the first half of this year. And we've also experienced lower volumes into Brazil, and that was just due to the inclement weather and a later start to the season, specifically into Brazil. Furthermore, into agri Bio, we keep on investing into our distribution channels, specifically into Europe and into U.S., and those mobilization costs also creates a bit of a drag on our, on our operating margin from that perspective. I think from a mining point of view, Seelan touched on it, excellent performance by our mining cluster.
If you take into account, this was in the face of very challenging macroeconomic environment, that challenges that the business face, as well as a declining mining sector, from that point of view. We've already touched on it, but strong performance, as you can see, throughout our business, and our business is already moving into the margin guidance ranges, that we set for our medium term. From a RSA perspective, revenue were down 5%, while operating profit increased by 16%. The revenue down due to the lower, ammonia price from that point of view, but it was also offset by the organic growth in volumes that we see coming through our mining business. Seelan touched on it.
We've also seen recovery in utilization of used oil, which was actually quite pleasing, as well as production and cost efficiencies that we can see coming through our production environment in our mining business. From an international point of view, we see a really strong performance with revenue down 16.6%, but operating profit increased by 36% from that point of view. We've seen higher volumes in our West African region, as it's starting to settle from that point of view, as well as what we can see in Canada, also strong performance and the Canada business turning profitable from that perspective, which is quite pleasing.
Maybe just if you look at it in the SADC region, we've seen lower volumes, specifically in Zambia, and that was just due to early rains reported early in the season, that slowed down some of the mining production, from that perspective. The JV we've already touched on, specifically in MNK, is contributing nicely towards our operating earnings in our international segment. Furthermore, our mining chemicals, as Seelan already touched on, really had a strong performance throughout the first six months of our financial year. We can see increased margins coming throughout that business, and that was also due to a bit of a product mix, even though volumes is somehow declined that business, really strong performance from an earnings point of view.
The teams throughout our mining, local as well, international, is also making really good strides in managing our cost savings initiatives across our business. Then I think from a chemical point of view, yes, I think chemicals was a disappointment, disappointing performance for us. But if you take into account revenue down 24% and operating profit down 95% from that perspective, relative to the comparative period, there was a couple of ones, or specifically the sale of the Jacobs sites, which was slightly muted by some of the intangibles that we've disclosed in the comparative period. But if I take into account the volume and the price mix was in a difficult macro environment point of view. Seelan touched on it, the decline in the manufacturing sector, as well as weaker consumer spending, and also the lower price environment.
Further down, what you also can see, which had a big impact on our chemical segment, was the load shedding, as well as the deterioration in our road and rail infrastructure. Also, that Seelan touched on was the extended unavailability of key raw materials due to prolonged unplanned shutdown by one of our key suppliers of compound chemicals. There was also inventory adjusted in this business, which we actually disclosed further. Furthermore, from a management point of view, we remain committed to position the business going forward. We aim to recover market share, as well as to focus on efficiencies across all our operating sites, specifically throughout our SADC region. From a margin guidance point of view, this margin guidance was put out to the market at our previous financial year.
This is a medium-term guidance, and maybe just to remind our shareholders, this is actually, as Seelan mentioned, it's a long business cycle. This is basically through the cycle. So it's basically on a full year basis, which we still remain committed to our medium-term margin guidance. And management is implemented specifically in the lower price environment, cost savings initiatives, as we've discussed a bit earlier, as well as focusing on our growth initiatives, specifically in our mining, as well as in agri international businesses from that perspective. Maybe touching on a couple of additional initiatives, more specifically on the cost initiative side. As I mentioned already, on the back of this significant decline over the last three quarters and the lower price environment, we really made good progress from a cost initiative point of view.
We've unlocked ZAR 165 million worth of cost savings initiatives across all our operations, and we're progressing well to meet our annual targets for this year, which is in the region between ZAR 250 million and ZAR 300 million from that perspective. We've also made really good progress in our international expansion in mining, as well as in our agriculture business. And in mining, specifically, what you can see coming through the numbers, Indonesia, as well as in Canada. As previously disclosed, yeah, it was a long lead cycle. There was a lot of mobilization costs through the system, but now we can see we're starting to turn the tide, as those business becomes profitable and driving volumes from that perspective.
The team still remain focused on enhancing our margins and also delivering our medium-term guidance ranges. Maybe just from a balance sheet point of view, our balance sheet remains strong. Specifically, if you look at the working capital, inventory reduced to ZAR 4.7 billion, which is due to the lower price environment, as well as the managing of the price risk, as Seelan already touched on. Specifically in quarter one, where we saw that significant further decline in commodity prices. That also resulted in a further lower turnout in payables from that perspective. But our focus on net working capital remains strong. That resulted in a release of ZAR 1.1 billion relative to the comparative period.
If you take into account where our year-end position was, which is normally the low end of our working capital cycle, versus half year is normally the higher end of our working capital cycle, we further released another ZAR 200 million just for the six months in that space. That resulted in a really strong cash position of ZAR 1.6 billion for the half year. Furthermore, that ZAR 1.6 billion was also supported by prepaid sales in agriculture relative to the comparative period, and that was on the back of potential increase or anticipation of increased pricing. And also, as Seelan mentioned, that is slightly offset by the higher debtor position in our Agri Zambia business.
Furthermore, we returned capital to shareholders in the form of an ordinary dividend, which amounted to ZAR 629 million from that perspective. Maybe just to point out, specifically, the investments there, that relates to the JV investment in MNK, specifically effective from the end of May. Then maybe just touching on our capital expenditure. As previously indicated, we remain focused on investing into our key pillars. And that is investing in our core, as previously discussed, as well as investing in our international expansion or international business in agriculture, as well as in mining, which is underpinned also by our ESG strategy. Maybe just one thing to highlight specifically on the capital expenses. We gave guidance of ZAR 700 million for the year, which was slightly higher.
What we can see at the half year, we're tracking slightly below that. The guidance is still intact for the full year, as some of those capital flows flow into the second half of this year. Maybe just one point to note, we don't starve our plans of any capital, but we follow a very disciplined capital allocation framework in order to make sure that we only capitalize cost, on, of a capital nature onto our balance sheet. The rest get expensed via repair and maintenance into the income statement, which is into account in how we think about our, our guidance from an operating margin point of view. And then maybe just closing out specifically on the cash flow. As I already mentioned, the focus on net working capital, the dip of...
The disciplined capital allocation resulted in a good cash generation from an Omnia perspective. The net working capital release, as well as the cash generated from operations, resulted in the ZAR 1.6 billion net cash position. Maybe just notable outflows during the period was the ordinary dividend of ZAR 629 million, as well as the CapEx expense of ZAR 263 million, as well as the investment in the JV, as we ceded those contracts into the JV, which amounted to ZAR 135 million. Maybe just closing out the last slide, the movement in cash. As earlier explained, this is the movement from our year-end position, which is the low end of our net working capital cycle, versus where we find ourselves at half year.
Obviously, you can see the big dividend payout there, but you can see the strong cash generation from operations, as well as further release in working capital. It just talks to the, to the disciplined capital allocation, from our teams, as well as to ensure that we protect, and safeguard our balance sheet in this volatile and uncertain environment. Thank you all. Maybe just hand over to Seelan for the close.
Thank you. Thank you, Stefan, and I think we must thank you and the team for all the effort it takes to get these results out, and we're obviously getting them out a little bit sooner each period than we initially did, so thank you for that. I'm just going to try and bring things together in the form of a close. I wanna firstly just talk about our growth initiatives and tell you where we are on that score. Firstly, to state, we said before that our focus is to continue to deliver against these three pillars, protect and grow our core business. So we've got a fantastic business in terms of supply, manufacture, and demand management.
There's an immense amount of agility and flexibility in that, that we can sell product on a local basis in South Africa, into SADC. We can change product between fertilizer and explosives, and maximize the value of the nitrogen molecule, and we've got great value propositions in that space in BME and in agriculture. So we will continue to invest and protect our core business. The second thing we would do is expand our agriculture international business. So James, our MD in Australia, and the team continue to make good progress to develop partnerships across the world. You know, we continue to distribute via some very, very large agriculture business, and we believe we have a great business in our Humates investment, and we will continue to expand and run that business prudently.
We do know that that business also is highly sought after, and I will talk a little bit about that later. We will also continue to grow our mining international business, and I think Ralf has made great traction in Canada and Indonesia, and we hope to leverage the investments we've made in Australia and hopefully see our Australian entity also grow profits the way the other two have. We've touched on a number of the other points on the slide, so I'm not gonna repeat those. If I just go one step deeper, and this is something we haven't done before, so bear with me, and hopefully you can have a cup of coffee just now for those of you who are in the room.
But we wanted to give you a sense of what our competitive advantage is in our supply chain. We believe we have an incredible moat in our supply and manufacturing complex in South Africa, and we wanted to talk through that a little bit. So this diagram tries to achieve that, and what we're showing you there is we have sources of inputs. So we have various sources where we can get ammonia from. We have various sources where we can buy urea and other inputs from. So we have a source which is from Sasolburg, which is from Sasol itself, a source from Secunda, and a source from Richards Bay, where we can buy a ship. We can bring the ship to Richards Bay, put it into our facility there, and then train it up.
So those sources then either move via pipe, they move via road, or they move via rail into our facilities. So when you hear me speaking about all the macro challenges, you know, probably at any point in time, maybe the rail didn't work, or maybe the port didn't work, or maybe the road didn't work, or maybe the pipe didn't work. But I guess what our competitive advantage is, is that we are able to move between all of those, and in certain instances, when one works and one doesn't, we can do something a little bit differently. We then take this into our plants, and what you do know is our executives sitting in the front here, they run the largest capacity, the most modern, and they tell me the most reliable as well, and they deliver that, in terms of our plants.
So then, you know, this feedstock goes into our plants, and we're able to then optimize that between the agri market in South Africa, the agri market in Africa, the mining market in South Africa, the mining market in Africa, and also into some strategic sales and ammonia derivatives to other customers. And, and that has been what we've been doing and optimizing in our business. That is. It's this process that has resulted in us limiting the impact that a massive decline in commodity prices could have had in our business, and it also allow us to capture the upside. And the next slide, I'm gonna talk to you about how we capture the upside. We then also have the option at the bottom to import both raw materials and finished products.
So in times, there are years, there are quarters, or there are half years, when we decide to make a little bit less fertilizer and import some fertilizer and optimize the use of our supply chain, our plants. There's still a lot we can do there, but what you're seeing is the value that's being generated there is lower stock, inventory days, higher cash conversion cycles. What you're seeing is, is our business demonstrating a higher degree of resilience, to volatility. And this is something we will guard against. This flexibility, we will protect. Where we feel we need more rail wagons, we will buy them and build them, which we have done in the current period. We've ordered 20 more rail wagons and taken delivery of three.
Where we feel our plant or our facility is under threat due to reliability of energy, we will put up a solar plant, which you see us having done, you know, and delivering, you know, 10, more than 10 MW at peak performance. This is. We'll continue to build this out, but this gives you a view into the pilot's cabin of what's happening at the back and how we're optimizing and what flexibility we have. You know, if you look at the fact that we have been able to supply through various challenges, we've been able to do that because of the agility, because of the flexibility we have in terms of this supply production and demand.
What this has done for us, and if I just go back, so I'm gonna build out a little bit on that strategic sales bucket right at the bottom. So we said, previously, and you would have heard me say, that we've made a decision as a management team, not only to sell our produce to BME and to our agriculture business, but also to sell our product on a wholesale basis. So what you do know is we have a number of nitrogen derivative products, and we've entered into a process to sell that, those on a strategic basis, where customers or non-our customers need the product, where other users of the product on a wholesale basis need it. And over the last few years, if I would just take FY 2019, y ou know, to FY 2023, and we're just using 100-187 as a, as to give you a value.
You know, we've increased the amount of strategic sales we've done through our facilities by 87%. This has been a—this is testament to the agility and the delivery of the previous slide, and it has helped us in terms of our working capital management, our supply and demand management, and our profitability. It shows you as well how we've been able to run our nitric acid plants higher. So if you take broadly from FY 2019 to FY 2023, 20% higher. And we also see how we've been able to, you know, I think in 2018, 2019, my first job and Francois' first job was to fix the nitro phosphate plant.
You know, how we've been able to get that sorted and ramp up the volumes fairly significantly for us. If you correlate this nitro phos production to the slide we put up previously, and how we make money out of that, you can see that's another profit generator for us, that actually further moves the performance of our business away from being purely an ammonia and urea-driven business. So what you're seeing here is further diversification, further agility of being able to sell our product into not only BME and agri core markets, where both those businesses have grown volumes in the six months, but also into an additional, into an additional market for us. This is not something that we've ...
It's very difficult to articulate and—but I thought, you know, a lot of our shareholders have been asking us, "Explain beyond, you know, how are you—what are you beyond correlated to, rather than just ammonia and urea?" And we've tried to do that on these slides. I think great delivery, you know, to demonstrate the value we add on the P, to demonstrate the value we add on strategic sales, and to show how we're able to run our facilities better, and there's still more to come here. The next growth vector for us is the scaling up of our agriB io business, and broadly, what you can see there is that our humates volumes are determined by us signing on a new big customer.
So they are lumpy. When you sign that customer on, if you take what's happened from 2020, financial year 2020 to financial year 2021, you see the jump. And I guess I'm very pleased to know that we are doing a number of trials with very big distributors, distributors in all parts of the world. You know, and we've been pointing to as those distributors land, you know, we will see another build-up in value. We know that this is an attractive market. These businesses trade at fairly high multiples, and we do have significant interest from a partnership perspective in this business, and we continue to look at that and consider, you know, how we unlock value in this business going forward. What I also just wanted to touch on is the operating margin in this business.
The operating margin in this business, you know, you can see a margin somewhere, let's say 28%-30%. You know, that is significantly ahead of your traditional fertilizer business, you know, and it's something that as it grows and as it continues to scale, will have a profound impact on our agri segment. What we've also done is further articulation of an investment in our AgTech business. We've been talking more about this to our customers and our shareholders, and we've been talking more about not just what we do, but how we do it, and we've been looking to monetize this further for our group.
There are certain elements of our AgTech that we can take to other parts of the world, and certain elements of our AgTech tech that has application in our mining business, and we have, we have started doing that, and we've started seeing some of the benefits from that. There's still more we can do there. Clearly, here is an area where we are in artificial intelligence. We are in intelligent capture of cameras and colors. You know, we're able to sense, you know, what is brown, what is green. We're able to spray accurately. If any of you have seen, I'm not sure what his, what his name is, but he has a name.
Orio. Oh, it's a difficult name, Louis, but I thought you would just say Oz. But if anyone has seen Orio, he's fully functional. We had him at a number of our different agriculture shows across the country, you know, and he operates 24/7. You know, he doesn't eat as much as I do, he doesn't need as much coffee as I do, he doesn't complain as much as I do, and he gets on with it being very, very accurately. So he doesn't drive as zigzag as I do as well. He drives to perfection and precision. We continue to build that out. We continue to form partnerships globally with various technology providers and bring the best that's out there to our farmers.
We fundamentally believe that Africa needs the latest and the best tech, and we should be providing that from an agriculture perspective. From a mining perspective, we've spoken at length. There are just three things we're doing there: growing our Indonesian joint venture, moving across those contracts. Ralph's doing that in a very responsible way. We've secured some new contracts there as well, and that's a little bit ahead of where we planned. The Canadian operation is also going well. The blasts are happening on the Côté Gold Mine. Our non-electric site is there and being commissioned. So I think that great progress being made there. Australia is the one area where we'd still like more progress, so it's not fully profitable yet.
We're doing some new trials, we've enhanced our management, and we've enhanced our infrastructure. Hopefully, at some point, we'll be telling you what we did in Canada in Indonesia is now up in Australia, and those profits are coming through. We've all touched on it, Stefan did, Ditebogo did, and I did. We've invested and bought roughly 10% of equity in a business called Hypex Bio. They are a Swedish-based explosives business. They are the only commercially viable non-nitrate explosives business. It's green. They are blasting in the northern hemisphere in very cold conditions. We've also signed an exclusivity with them to take their product into certain parts of the world, and we will start off by doing some tests and building a test plant of theirs in Canada.
Clearly, Canada being in the north and also being cold, you know, the product is tested and fully functional in cold environments. So we'll take that off there, and then we'll start doing the tests in some of the Southern Hemisphere countries where we are involved. We're excited about this. We see a great demand for greener, cleaner explosives going forward. And what was particularly pleasing to me, after, you know, Ralph put pen to paper, one of our competitors called Hypex Bio and said, "We'd like access to the product." And Hypex Bio said, "You've got to go through BME," because they have sole exclusivity in this territory. So it shows you the demand for a disruptive technology, you know, very similar to what you've got in humate in agriculture.
We've now invested in something of a very different nature in the mining business. Very excited about this. It will take time. It's not something that's gonna ramp up immediately. So, you know, similarly, you will not see a complete end to chemical-based fertilizers. Those are needed. They have a big role to play in food security. Similarly, you will not see just a switch off of nitrogen explosives. You will see a transition. It'll take a while. There's a lot of work to be done there, but it's great for our company to be in the forefront of that. You see the impact of our mining chemicals business doing very well in the mining international segment. We believe we've got a great asset here. We believe we've got some great solutions here, and we've made a decision to continue to expand that business.
We will add to the team, we will add to the principals we've got, and we will, at the right time, in a very careful manner, take this business alongside BME into the territories BME is in, and take it to the customers of BME. So actually enhance the value proposition of our BME with these, with these chemicals. I've personally been involved in some of these new sales, meeting some of these customers, and this is a great business we've got, so we'll continue to grow this and grow, more growth will come from it. From an outlook perspective, and we're almost done, there's only three slides coming, and I don't have a fourth. You know, we positively leverage to population growth.
You know, so I said, you know, previously that food security is of critical importance to all of us. You know, for those of you living in South Africa, you might have seen a few weeks ago, the price of eggs went from ZAR 2.50 to ZAR 8.50 in some places, and every WhatsApp group was saying, you know, "Is there eggs? Aren't there eggs?" So food is a critical part of what population needs, and that's what we're in. We're in the primary sector of, as this population is growing, to provide the inputs for food security. We also have our business very aligned to decarbonization and climate change. So, you know, Ditebog o spent quite a bit of time initially talking to us about how our investment in ESG is not something we do on the side.
It's not something we do at our plant. It's something that's embedded in our value propositions to customers. So we believe the world needing more greener, cleaner, and ESG-aligned solutions are the solutions we will be providing, both in agriculture and both in mining. And that will ensure that we, our business is sustainable and our business is clearly aligned to these big mega trends. We have demonstrated strong and consistent cash generation. So whether it's the rising, whether it's the high, whether it's the volatile, or whether it's declining commodity cycle, you know, we've demonstrated free cash flow, a good net cash position, and continuous returns to shareholders.
There's a slide at the back of the deck where, Glen, went and correlated what our dividend yields have been over the last period, and maybe it's worth, when you board, to just have a look at that. But strong, consistent cashflow. And we believe this is the right thing for our business and also the right thing for our shareholders. So in closing, we operate in primary sectors. We have a very focused business model, so a lot of the things I'm telling you is exactly the same as I've been saying for a number of reporting periods. You know, we've rolled out our purpose in our organization, but we've also rolled out our values, and one of our values is really to strive for excellence, you know, to help our people be precise.
You know, we operate in both our agri and mining markets to ensure precision, to ensure accuracy, to ensure efficiency. So we've got some very great operational excellence solutions for us. I think we've got a great moat and competitive advantage that we're investing in and protecting, and we'll continue to do that. And then finally, to underpin that is the strong capital and cash position. It obviously allows us flexibility; it allows our shareholders to get some view of, you know, what we would do with that capital, which we told you, you know, this is how we would spend it, and this is how we would return capital to shareholders.
But it also allows us, you know, to use that capital strength to invest in growth and to invest in protecting our businesses where we believe, you know, they are under attack. I think what we've got is a strong management team, focused. We've got a very busy planting season ahead of us. You know, good conditions, you know, and we look forward to working hard in the second half of the year, you know, to deliver a sustained performance. And hopefully, when we meet in June next year, we will be able to talk through how the next six months performed. But I'm gonna stop there, and we can take a few questions or comments or thoughts. Should we start on the line first or in the room?
We'll start in the room, please, Seelan.
Okay, we'll start in the room. If there's any questions in the room? And Andiswa, I thought you would have learned from the Springboks. There's a way of just throwing it.
Afternoon. [Ntokozo] from SBG Securities. Just wanted to say, Dylan, congratulations to your team on the results, given the current macroeconomic conditions, and I was speaking to Nerina earlier, said I was very happy to see a slide with volumes. It adds a lot more science to the art of modeling the future, you know? I just have two questions for you. Three, actually. The mining chemicals business, I really would love to understand more, how it looks currently in terms of location and, I guess, what it is in a short summary, and what you'd like it to look like going forward. Secondly, just your concerns around...
I know Omnia is not an ammonia-based business, but you guys have quite a large exposure to it, and I would like to understand what are the risks? What are you worried about towards year-end when it comes to the price environment, especially supply security, given the current conflict in the Middle East? And lastly, share buybacks. Should we expect to see more going forward to the end of the year based on what was approved at the last general meeting? Thank you.
Great. Now, thanks for that question. I mean, just on the volumes, we have disclosed price and volume slides for a number of years. So you will see the percentages of volume and price increases. We've always done that at the, in the back, in the appendix. Just in terms of mining chemicals, I think that's a very valid question. You know, what is the value proposition of our mining chemicals business, and where does it operate? Our mining chemicals business operates predominantly in Africa, so predominantly outside of South Africa. And it is predominantly a business that offers the safe transportation of various commodity chemicals, but also certain specialty chemicals for mineral extraction. That's broadly what it does.
It's got a few unique propositions where it has principals in Europe that have certain unique chemicals that it works and tests with a mine and then supplies that. It offers the full bundle service of doing you know some of that testing and analysis and then getting the chemical to the location. You know, so the opportunities for us there is to replicate that in South Africa, you know, to replicate that in other countries where BME is strong, because it's done that on its side. If we go back to Omnia four or five years ago, we largely ran a hub-and-spoke business, where each business operated separately. Now what we're wanting it to do is leverage the customer base and leverage the infrastructure that BME has.
We can go a little bit further into that, maybe, in some of the. In at a future stage or, or even, you know, put out a bit of a brochure or something around that business. From an ammonia perspective, what are we worried about? And that's exactly why we put up that slide. You know, there's certainly a lot of unease about -- and our team often says it. It's not about the availability of ammonia, it's about the availability of ammonia at the point of where it's needed. So it's actually the logistics to get the ammonia where it's needed. So there's plenty ammonia across the world, but you don't need the ammonia in the Gulf. You need the ammonia in Sasolburg. We don't need the ammonia in the Gulf.
You need the ammonia in, you know, some other places where our competitors are. And that's where the problem comes, is the availability, the logistics, and the timing of that availability is often out. So that's what worries me, is that, you know, we have a fairly agile and robust supply chain, but it's to make sure that as the timing is out, you know, we have enough storage, we have enough moving, and we have enough product in various stages related to ammonia. I do think, though, in the medium term, you will see a level of consolidation in this space.
I do think there are certain manufacturing facilities that are, you know, will probably get bigger and stronger and succeed, and there are certain that probably need to change and reconsider where they are. So I think you will see a change in the ammonia landscape, or the, you know, the landscape in the country. I think in terms of share buybacks, we, you know, we seek permission to buy back shares, and we got that. We told you, you know, how much we got, and I think we said at the time, the board has set aside an initial tranche of cash to buy back shares.
So, you know, that will, you know, that will continue in a way that makes sense, based on where we are, what our capital allocation is. And clearly, if you look at, you know, how much we've spoken about our cash and our balance sheet, you know, we will, we will continue to consider all options of buybacks, dividends, you know, M&A, you know, special dividends. However, you know, just a reminder, we did say that we, you know, we will do that at year-end. So we, you know, we're not, you know, when thinking about a dividend, we, we, we have, we have paid dividends at year-end consistently for the last few years.
You know, so while we've got a very strong cash position at half year, we've made the same decision, the board made a decision to say, "Just look at it at year-end, and at year-end, decide what to do about, you know, the capital allocation." So, yes, I mean, at this point, there's no reason to stop the buyback. But, you know, there might- there is various things we will look at at all time, at all points in time, and we will tell you, as we've done now, you know, this is what we've done and this is why we've done it. Yeah. Is that okay? Anyone else in the room? I'm assuming the more difficult questions are online.
We have a couple of questions online. The first from Rowan Goeller of Chronux Research: Within the commodity cycle in the agriculture division, what is the seasonal impact from farmer demand expected to be this year between the first and second half?
Yeah. So that's a great question. I think and I said it, and I'm... You know, when I went down off the stage and I thought about it, I said, "Did I say it loud enough?" And thanks for the question, Rowan. In essence, what we're seeing is a more normalization of demand. So, you know, we expect an overall agriculture segment to have a bigger contribution to the Omnia Group in the second half of the year. That's what our expectations are. You know, having said that, we are in a very dynamic environment in terms of climate and planting. There's good agronomic conditions, which we say there's a high demand for fertilizer, which we're seeing.
Fertilizer prices have come down, so farmers are using that as an opportunity to restore, you know, some of the soil nutrients. And we are clearly well-placed to deliver that fertilizer. You know, our head of marketing and sales is telling me it's very busy, and, you know, supply chains are still disrupted. So we're in a strong position, and broadly, what we expect is to move to more of a normalized cycle, where the second half overall is better than the first half. Having said that, you've got a lot of factors that play into that. I think what you're seeing here is not a first half that has been, like we've seen in the prior two periods, prior two financial years, where the first halves were inflated by early purchasing.
you know, right now we're in a more normalized agriculture season.
Thank you, Seelan. We did have a similar question from Herbert Kharivhe of Investec, but I think you've addressed that. The next question comes from Adam Nkambule of Allocated Capital: Can you please give us more details about what precipitated the 95% fall in operating profit for the chemicals business? Talk to pricing and volumes. Strategically, why are you sticking with this business when it has been deteriorating for the past three years and has poor margins?
Yeah, thanks for that. I think, you know, the Protea business, and if we, you know, if we think long through a cycle, so not, you know, three years or five years, but if we take a 10-year horizon, you know, Protea has always been a difficult business for the Omnia group to run. And I think what this management team has said, and what I've said is, you know, part of Protea not being fully integrated into Omnia, you know, makes it a business that must stand up on its own two feet. It makes it a business that, you know, has had this cyclicality of being a lot more prone to some of the external factors.
You know, we then have said we're gonna run the business separately again, we're gonna run it to model, and we're gonna look for a partner. You know, we—the business clearly, you know, started running well towards a model, and what we're seeing. And really this fall, you know, if you look at the last six months of last year, you know, Protea made roughly about ZAR 20 million or ZAR 30 million of EBITDA saying ZAR 28 million of earnings. So it already started having a fall. So you see the acute impact of load shedding, of logistics, of customer issues, of the manufacturing sector in that business. Our commitment to that business, that's a, it's a 50-year-old business. There's certainly some very strong medication that the business needs to take.
You know, we've had to, we've had to make a few changes in that business, and, and, and we do remain committed to the business. We believe that business has a great SADC reach. It's got a great brand, it's got great facilities, and it's got some primary products that are needed for customers and manufacturing across SADC. What the business does need, it needs a partner, it needs additional principals, it needs some more sales folk, maybe. You know, so we remain committed to providing the business with the medication it needs, firstly. We remain committed to finding a partner for that business, and we remain committed to fixing that business.
I think it's the performance is certainly not what we would have expected, and we've started taking the necessary remedial action in that business.
Thank you, Seelan. The next question comes from Herbert Kharivhe of Investec. How does the current TFR situation affect your business? Farmer produce is likely to go bad as they wait to export. Does that affect how much they plant? And is the local ammonia supply still in force majeure?
Yeah. So, you know, there's a few questions there. I think if we take TFR overall, you know, that is affecting a number of sectors, not just agriculture. It certainly has affected the mining sector, it certainly has affected us, you know, and it has affected our competitors. You know, as far as a force majeure is concerned, we certainly haven't declared any force majeure, you know, and that's why the effort of showing you the slide of how we manage it. We have seen a benefit to us because of our strong supply chain. You know, I do think there's early... There's a lot of commitment, and there's early signs of wanting TFR to improve, and business, TFR, you know, and government are working together to try and solve it.
You know, do I fundamentally believe it'll solve immediately? No. So I do think a more agile way of moving produce, a more agile way of doing things is what's needed. You know, produce going bad clearly is not great for food security, and it's not something we want, and it's not good for our farmers. From our perspective, you know, we're not involved in that part of the chain. You know, we involved more at the primary end, so we involved, you know, in the inputs that go in the soil before the plant and potentially after the plant. There is some post-harvest that we do. And clearly, what we want is, we want our farmers and our mines to do well.
We want them to be profitable so they can expand and plant more and blast more. So TFR is an issue for us. You know, the ammonia force majeure issues, you know, there might be other companies that have declared force majeure, we haven't. And clearly, as I said, there is ammonia. It just so happens the ammonia might be in the wrong part of the world, and, and the demand and supply of it is not adequately matched. And we've, you know, from our perspective, you know, we work very hard to try and manage that logistics. Did I miss anything on that question?
The one part was whether the TFR issues are affecting how much farmers plant.
I don't know. Louis, do you wanna maybe answer that? I'm not convinced we've seen a slowdown in planting, but Louis can answer that.
No, thank you, Herbert, and thank you for the question. Yeah, from a TFR perspective, it's product then going out, and I don't think there's a real threat to farmers, especially our maize farmers, which is normally roadbound in terms of getting their produce either to the mill or to the port for export. Obviously, there's an impact on citrus farmers and export farmers, and I think goes to them extensively over the past six months. And it's just phenomenal, again, Seelan, how these farmers came up with plans and how they made arrangements to get their product not only to the port but actually to the receiving port in the country where they export to.
So to answer the question, I don't think there's a big impact from a TFR perspective, and also the ports situation at this point in time with plantings of our farmers.
Thanks, Louis.
We have another question from Wesley Gardner of Rezco Asset Management. Is it fair to say that Omnia has a ±12-month lead time in purchasing ammonia to a sale being made through Omnia's agri or mining segments?
No. Yeah, thanks for that question, Wesley. No, it's not. I wouldn't say 12 months. I think if we go back to the slide, you know, what we're trying to demonstrate here, it's going to be a bit tricky to go to that exact slide. What we're trying to demonstrate is that there are certain parts of our business where the conversion of ammonia to cash can be as low as 30 or 60 days. Broadly, you'd expect that in our explosives business. And then there are certain parts of our business where the end component in the bag of fertilizer might take 6 months or 9 months, or a much longer cycle.
This level of optimization is what our team manages to ensure that where you've got volatile commodity prices, you map the supply and demand, not only to just producing the stock, but also to understanding the risk of the ammonia devaluation or appreciation in the stock that you're carrying. That's what our supply, demand, and manufacturing teams do. There are areas where the end component in a bag of fertilizer, you know, might take six months to convert, but that's the ammonia component. Remember, there's an entire bag, and there's other chemicals in that bag as well.
But there are areas where, you know, and if we take our mining business, where ammonia converts a lot quicker into cash, and turns through our plant, and this is something the team have to manage and work out, and have done. You know, work out how to—when to make the product and which product to make. Because we're making, you know, we have the added flexibility that we have an agriculture business, a explosives business, you know, and a strategic sales business, and we can move ammonia and product through each one of those differently to maximize the margin out of that ammonia molecule. Not just the income statement effect, but also the stock risk or the working capital risk.
I think this is exactly what we've been able to do very well in the current period.
Thank you, Seelan. The last question online for now is from Cobus Wessels of Allweather Capital. On working capital, can you please provide a bit more detail on the increase in trade receivable days and how concentrated the debtors are currently, such that what percentage does the top five make up of the current debtors balance?
Yeah. So I mean, we don't - we haven't given out that detail. But I guess, you know, obviously, our working capital has got three components to it. It's got the stock, it's got the debtors, and it's got the creditors, and we've also got the supply chain finance that's a bit in there. So, you know, from a debtors perspective, we've obviously got debtors in BME. You know, from an agriculture perspective, we've got debtors in South Africa, where we are where we largely sell to very large commercial farmers, and we've seen a very good management of the debtors book in those spaces. And obviously, in SADC, we've got different exposure to different debtors there, which is largely governments and large contracts in the agriculture space.
So we, you know, unfortunately will not be able to give you a debtors list, but what we'll talk you through, because then you're going to have our customers and go and sell, quote, "your own fertilizer to them." But you know, what we can tell you is, we manage those debtors very carefully. You know, in all instances, you know, we have to consider whether we need letters of credit from some of the big commercial banks around some of those transactions, where we're uncomfortable with the underlying credit rating of the government or that we're dealing with. So this is something we look at, and they clearly are at different points in the cycle.
There are different exposures to, let me say, just broadly, Africa, mining, and South Africa. You know, are there specific exposures that, you know, out of the ordinary or worry us? I think those exposures are being managed well, and our track record in this space, you know, has been good. You know, having said that, you know, we have, you have, you know, you know, you have governments that can't pay in some instances, and banks that don't pay in some instances. But, I mean, this is something our team have to manage, manage well.
No further questions from the webcast. Don't know if there are any further questions from the floor?
No. Okay. So thank you then to all of you for coming here. We really appreciate it, and thank you to all of our shareholders online. If you have any further questions, please email our IR team or myself, and we will take care of that. And we thank you for the interest in our company and making the time to listen to what we have to say. We look forward to seeing you in June next year. Thank you.