Our interim results for financial year 2023. It's a pleasure to have you all here. Before we start with our proceedings, I just want to highlight a few safety requirements. The exit to the room is to the right of me, and in case of emergency, please walk in a calm single file out into our parking area, which is a safety point for us, and you will be instructed by our safety officers with further instructions. In terms of safety, I'd just like to ask Tanya Rae, our head of finance, to provide us with a safety moment.
Thanks, Norina. Thanks for opportunity to share with you what is top of mind and front of mind for Omnia on a daily basis, and that is a thought around safety. I'm sure all of you have noticed the state of our roads as we drive around and in particular at night, I've been aware of the potholes. Really just a shout-out to all of you to be aware of the roads around us and take care as we travel. Thanks very much.
Thank you very much, Tanya. I'd now like to call upon our CEO, Seelan Gobalsamy, to start with the results proceedings.
Thanks. I've got a mic. Okay. Good morning, everybody. Thank you for coming. A special welcome to all of our board members on the line and in the room. A special welcome to all of our shareholders, our other stakeholders, media and staff who've joined the session. It's not often that a company has a change in Chairperson and we honored today to have the Chairperson of our board with us in the room. I'm gonna actually introduce all of you to Tina Eboka. Tina was appointed the Chair of our board at our AGM in September. Tina has been on our board since 2016.
She's a BSC graduate, an MBA, and has been a steady hand and leadership on our board for a number of years. I think it would be okay if I call Tina up on stage just to say hello and maybe say a few words since she's been appointed. Let me do that before I start. Thank you. We need a microphone.
Can I just do it from here? Thank you. Thank you, Seelan. Good morning and welcome to everyone who's here. I kind of feel like I'm having to make sure that I can get my thoughts all together this morning. Welcome to those actually who are online, which I'm sure a lot of our board members are, and some of our important stakeholders. As we know, the past few years have been extremely challenging for business all around the world. Not only that, we at Omnia, we've actually had to continue operating during that time. Many people have had to contend with personal health issues as well as a lot of loss in terms of life, and it really has been a challenge.
COVID-19, I pray that it doesn't come back in our lifetime so that, you know, we can actually improve, not only the business, but actually the market environment also has been very tough and I'm sure, all of you are aware of just the challenges, especially in our country and across the continent, in the other markets where we operate. For Omnia, these challenges were further compounded by a turnaround strategy we started a few years ago. We had to make sure that we continue to deliver, to create a sustainable business, not only for our customers, for our employees, but for many stakeholders who benefit from that. As I stand here today, I'm delighted to report that these hard decisions have held us in good stead.
You know, you saw the results this morning and we'll discuss further in this meeting. This has been good. I don't think we would have done this in terms of delivering the strong performance, especially for this period, if it was not for the hard work and dedication of all Omnia employees, the leadership team, as well as the support and oversight from the board. I want to thank very humbly the previous chair, Ralph Havenstein, for his really steady leadership of the business during this time. He actually helped the board and the leadership team steer through all those challenges and ensure that in a very few years, the turnaround strategy was delivered. Thank more to Seelan and the leadership team.
While we're confident that we're well-positioned to benefit from the ongoing execution of our strategy, we as a board are also committed to a process of continuous improvement. We continuously strive to embed Omnia's desired culture, values, aligned behaviors, so that we act safely everywhere we operate. We respect and support the growth of others, do the right thing to empower our people, achieve excellence together. Our board will continue to provide necessary oversight and support to the leadership team and the company to continue to drive the excellence that we now become accustomed to. And I must say that for us, it's the same whichever geography we operate in. Before I get carried away with all the things that the board are committed to, let me hand back to Seelan. Thank you very much.
Thanks, Tina. We look forward to your leadership and guidance of the business over the coming years and decades. Let me get started. I think just to say that this is an incredibly pleasing set of results for me to present. You know, I think the performance you're seeing today is an exceptionally strong performance of the Omnia group in some very different and difficult times. What we're seeing and what we're getting accustomed to is that the macro environment that we operate in continuously changes. There's continuously tailwinds and headwinds that impact our business. The agility, the resilience, the performance of every single person in the Omnia group has really come together to deliver this set of results. If I press ahead.
Let me start off just with some key indicators. I think the first thing to report is during this period, we've had 0 fatalities. I think if I think of how our chair has spoken and Tanya has spoken, safety is a key measure in our business, and it's a key value in our business and something that we will continue to subscribe to. No ton of fertilizer, no ton of explosives, you know, or no jerrycan of chemicals is more important than any person's life or any person's health in our company. We continue to deliver against our ESG goals, and you will see some of that coming up a little bit later. I think most importantly, we continue to provide supply security for our farmers, for our mines, and for our manufacturers.
It's in a time like this, during significant disruption from a supply chain perspective, from a road perspective, a port perspective, that Omnia stands tall amongst all suppliers and competitors to be able to continue to provide the primary products and services that we provide to the mining, agriculture, and manufacturing sector. What you will also see today is very disciplined management of cash, very disciplined management of working capital. You know, we will show you an investment that we've made in inventory positions, and with that investment, we show a positive cash balance for the reporting period. That results in a very strong financial position, and we are incredibly proud to show you the strength of our balance sheet and how we have strengthened the balance sheet during these times.
From a overall perspective, you'll see revenue up 19%, operating profit up 47%, operating margin up to 9.2%, and our adjusted headline earnings up to ZAR 4.01. What we have done, and Stephan will talk a little bit about this a little bit later, we've set aside and we've shown the impact of Zimbabwe, hyperinflation, Forex, and the profit we've made in Zimbabwe separately. We didn't want that to distort our results, and we provide our shareholders with a chunk of annexures around that in the back. You know, just to state that Zimbabwe remains an important market for us. We have been cash generative in Zimbabwe. We have made profit in Zimbabwe.
However, the Zimbabwean issue of Forex and hyperinflation does have a distorting impact on the numbers. We've tried to show that a little bit separately. No business is sustainable without a very clear purpose. I think what we know is that our people in any organization across the world, all rally around a very noble purpose. What we've done in our company is we've been rolling out our purpose statements. We continue that process to roll out our values, and we continue the process to roll out our behaviors. Our company will be 70 years young next year, and our job is to make sure that, in the next 70 years, our people are energized, inspired, and this is a great place to make a difference.
This is why we continue to rally our people around a very noble purpose, a purpose that is important to life and livelihoods across the world. We have a significant impact in food security, we have a significant impact in mineral extraction, and we have a significant impact in the provision of clean water across the markets we operate in. We sustain livelihoods by creating employment.
Whilst we employ 4,000 odd people across a number of countries, there's immense supply chain downstream, and immense customer and upstream businesses that are reliant on the critical solutions and supplies that we provide, whether that be fertilizer, whether that be agronomic services, whether that be explosives, whether that be detonator and other blasting services, or whether that be all the products we supply via Protea that has a large impact on life across millions of people that Protea touches. We apply technology on an efficient basis. When you read through our strategy, when you read through our documents, you will see that we focus on doing what's right for the environment, what's doing what's right for people's life.
We use whether it be solar, energy, water, nutrients, macro or micro, we use that in a sustainable way. You will see that come through our capital allocation as well, that when we allocate capital, we allocate capital on very key ESG themes. Safety. On all scores, our business has improved our RCR. It's a very important part of metrics that we look at. I think RCR is one thing, but we also have a number of initiatives that look at lead indicators. I think what we know is we operate in a vast world with an environment that is open architecture, so people drive on roads. Some people drive too fast, some people drive too slow.
We've got to look after all of our people, we've got to look after all of our suppliers, our contractors, our partners, and our customers. A big thing we measure is to see how we perform on that score and continuously improve. I think a big theme, which our chair has also mentioned, is that we continuously improve our business, is continuously focused on excelling and doing better continuously. Great performance from all of our teams around our objective of zero harm. We also promised you that we will measure a number of other ESG components. We will put those into our incentives, and we will ensure that they are properly measured and managed going forward. We put up a few here. The first one is to say our CO2 emissions have also reduced substantially.
The EnviNOx converter was maintained and refreshed during this period, and you see the decline in the CO2 emissions. We've also been measuring the efficiency of the energy that we use, and you will see a substantial increase in recycled water that we will use over the coming period due to our reverse osmosis plant. We've highlighted two issues here. The one is our investment in a solar farm in Sasolburg. We commissioned that a few weeks ago, and we're able to generate between 5 and 6 MW of energy. We use that to supplement our Sasolburg facility, so we're able to generate between 25% and 35% energy from the solar farm.
Most of you know that we also generate steam, and that is also used for to supplement the load reduction processes that Eskom implement. We will increase that capacity. We have plans to double that capacity by another 5 to 6 MW over the coming 12 months, and that will also then make us significantly less dependent on the utility provider. I think most businesses that operate in South Africa and SADC are forced to make sure that you are more self-sufficient. We've done similar on the water side. We built and commissioned a reverse osmosis plant. The plant cost us ZAR 13 million to build, and it will save us roughly ZAR 5 million a year in water costs.
Obviously what it does is it allows us to reuse, water into our facility, once it's gone through the cooling towers, which is another pleasing outcome for our business. I really must compliment, you know, our manufacturing teams for coming up with these great initiatives to enhance the value from our current, businesses that we've invested in, and our current plans. If I step onto the business update, the story of today, I think it's fair to say that we've be operated in an incredibly complex and challenging macro environment. The first thing that we had is we entered the business cycle with much higher commodity prices, than we've seen.
You know, the world said, the commodity prices will downturn and what happened is, you know, Russia and Ukraine went into the difficult patch that they went into. Most people said that will end quite swiftly, so this will be a three-week or a two-month war and everything will normalize. I guess the rest is down in the history books. What we've seen is sustained higher commodity prices. We've seen sustained volatility, and what we've seen is sustained disruption in supply chain. You know, whether it be COVID, the Suez Canal, port disruptions, container shortages in China locking itself down more often than not around COVID. You know, our teams had to deal and perform in an incredibly difficult environment.
When you add to that what we've had in the local environment of. You know, social political issues, Transnet, Eskom, and ports. You know, you go, wow. You know, it's a, it's an incredible amount of headwinds that businesses face today. What I can show you is how we've performed with these headwinds. Added to that, I don't want to miss this point, is really the issue of climate change. You know, we're seeing more and more that climate change is not something that's there for future generations. It's actually right here with us today. We're seeing the floods in [KZN], my heart goes out to all of our colleagues in Indonesia. I'm sure most of you have seen that Indonesia has had a 5.6 earthquake. Have I got that right?
either in the last day or the last few hours, I'm not sure exactly when it happened. We see more and more of these climate events that impact people, impact business. You know, our sales team in our fertilizer business show us the extent of the storms and the rain that comes, and you would have seen that in a number of parts of SADC. More and more, we will have to do better for the environment, and more and more we will have to be agile to be able to deal with these matters so that businesses are sustainable. That's the macro and micro environment. I guess it's a story of challenge.
It's a story of teams needing to be agile to respond to these and respond to them quickly. You know, We have also seen locally the main arterial vein between Gauteng and Richards Bay and Durban being stopped, the coal line. We saw what's happened there, and we've just heard of a head-on derailment on the Mozambique line a few days ago. You know, more and more you need agility of supply, you need flexibility of inputs, and I guess you need to have increased safety stock. We've been encouraging our farmers, we've been encouraging our mines, we've been encouraging our manufacturers, you know, to enhance their processes around supply chain.
You know, we all learnt, doing our business school MBAs and courses that just in time is the way to go. I guess what we're seeing today is that the world is turned on its head, and actually what you need is more safety stock. You need more flexibility of supply. You need local supply and global supply to deliver the type of results that you're seeing our teams delivering today. Just again to remember that our story around purpose. What you've got is an Omnia that has got a very noble purpose, a business involved in the primary sectors of food security, mineral extraction and chemicals in the manufacturing space. That comes with a lot of robustness, a lot of sustainability in our business. We also set out a flight plan.
You know, what you do know is our business is beyond a financial year. Our business cycle is beyond a financial cycle. Our business has a long business cycle. What we set out a few years ago was to say, you know, we will have a bit of a flight plan. We set out to stabilize our business. We set out to fix our balance sheet, and we set out to go and do a whole lot of fixes in our company. I think, you know, I can say proudly today that that has been done fairly well. Our teams have rallied together and our company's in a very different space to what it is today compared to where it was in 2019 and 2020.
Today, what we're doing is we're continuing to renew our business. We believe that there's significant value in the current core. The assets we've invested in, our Sasolburg plant and facility, our AgriBio business in Australia. You will see what our chemicals business has done in this half, and the significant value in our explosives business, which we're taking to a number of countries across the world. We will continue to invest. We will continue to increase the returns in that business and renew those businesses. That's what we refer to as manufacturing excellence, winning in customer markets, investing in our performance culture, increasing our organizational capacity in our current invested assets. We've still got a lot of work to do there, and we still have significant value we can unlock in our current core.
I guess each time you hear us speak, we speak about headwinds and we speak about great delivery. You know, I'm waiting for the day when there's no headwinds and just super, super delivery. You know, then we will see what our current core can actually deliver. The second phase we're in, and these phases don't run sequentially, you know that they often overlap, and there's always things between them, is really the phase of growth. To say, you know, where is Omnia investing for its future growth that will come in the next five, the next 10, the next 15, the next 25 years? I guess the first statement we wanna make there is that we will align that growth to very clear ESG objectives. We will not invest in technologies or businesses that are not aligned with our ESG policies and objectives.
The second thing is we will continue to invest in R&D and innovation. We know that we've got great people, great products and great services. We see that we're able to do some of the largest blasts in some of the most difficult terrain across the globe. You know, our explosives business, BME, you know, has got some incredible technologies in there. We will continue to invest in those technologies. Our agriculture business, you know, each time I meet our people and I see the impact they make on the farm, it makes me so proud. You know, we are able to be efficient with nutrients, we are able to be efficient with water. Our agronomists solve real problems on the farm.
They're able to go onto the farm, understand, analyze with science, with technology, what the core issue is and solve it. That's great R&D, great innovation, and great expertise. Omnia has some incredible technologies in that space. We will continue to invest in it. We will continue to bring in scientists. We will continue to bring in agronomists. We will continue to bring in businesses that can enhance and grow our footprint in that space. Let me give a word about Protea. Protea as well has a number of technologies that are new generation. You see some of that coming through the results. I see the Protea team looking for principal relationships across the world. Looking for folk that have got newer technologies that they can bring into its customer base and into its manufacturing base.
We will continue to invest in R&D and innovation. I'm gonna get into a rabbit hole if I give you more examples of those, so let me stop. The other two things we will do and what we've told you before is we will invest in our AgriBio business, and I'll talk a bit about that later. We'll also invest in our explosives business across the world, and I'll talk about that a little bit later. We will explore certain inorganic opportunities as well. In doing that, we will be very prudent about capital allocation. You know, we often put out our capital allocation framework, and I'm sure Stephan will talk a bit about that, and I will talk a bit about that. We will not deviate from managing our balance sheet carefully.
We will not deviate from being very prudent with capital allocation. We will not rush to take on debt. We will not rush to take on risk that we can't manage. We will deeply understand our business and deeply understand what are the right businesses that are complementary to our company. Our objectives in doing this is to grow our earnings. I certainly don't believe these great results you're seeing here are peak earnings. I think there's a lot more to come, and I'll show you our production plans, why we've got capacity in them and, you know, how much more value that can generate. We will continue to increase our margins and obviously, Stephan will talk a little bit about it just now. You know, our margins have increased.
Our cash generation is good. After investing ZAR 3 odd billion in inventories and ZAR 2.2 billion in working capital, we show a cash positive balance at the end of the reporting period. You know, how many companies can show that? We'll talk about the working capital. We will continue to be prudent around working capital. I guess we will be disciplined in our quest to increase the return on capital of our company in the coming periods. The flight plan is underpinned by a business model or an operating model. Just to remind all of you, this is our operating model. In essence, what we said is we will strengthen and grow our core.
And you see today that we have invested in certain capabilities in our core. We'll talk later about investing in more rail wagons and trains. We've spoken about the solar project that we've invested in. We will invest more money in an additional solar farm, and we've invested in a reverse osmosis water treatment farm. Where we believe our core can be strengthened and grown, we will invest in it. We will also integrate and synergize some of our businesses. I've said before that Omnia has been run very separately, and there's an opportunity to have our folk work together, have our people work together.
It's very, very pleasing for me to see how our management team are integrating, how the different business units are looking for synergies, and there's still a lot more we can do in that space. From a manufacturing perspective, we've got a lot of value to unlock in optimizing our plant, optimizing our supply chain, and optimizing our distribution. We have unlocked value there, and the teams have done incredibly well. You see it in the results, but there's still more that we can do. From an international perspective, we'd like to continue to grow our partnerships. You see us expanding in Canada and Indonesia on a partnership basis.
Where it makes sense, you know, we will consider distribution partnerships as well, but we also will consider some inorganic acquisitions where it makes sense and it's complementary to our agriculture, our AgriBio business, and our investment business. Getting to our financial highlights, I think this is all the good news. Our revenue is up 20%. Our profit is up 47%, excluding the impacts of hyperinflation and the Zimbabwean Forex and Zimbabwean profit is taken out of that. Our margin is up to 9.2%. Our EBITDA, ZAR 1.4 billion. I think the most pleasing thing for me is our cash position after investing the numbers we've invested in working capital. You see a very good cash position for the business.
We've put in, you know, a chunk of money into working capital and stock. We'll talk about that later. Our adjusted headline earnings up 32%. Overall, a very, very, a pleasing set of results. I think this is an exceptional performance in a very tough, macro environment. Just to talk about the profit. We've put out this slide before. The operating profit of our business is up 47% if you exclude Zim in the current half and in the prior half. All three businesses' profits margins are up.
Agriculture, you know, up ZAR 165 million, mining up ZAR 109 million, and Protea, an exceptional performance for the half year, you know, up ZAR 54 million and almost, I think, a 100% increase in our Protea business. In terms of strategic objectives, I think it's, it's more important to know that our businesses are focused on their strategy and their execution plans and what comes out of that is the financial result. Our business has been focused on ensuring supply security. You know, I can stand up in front of you today and say, you know, we have worked incredibly hard to ensure that farmers, mines, and manufacturers have security of supply. You know, we have not needed to declare force majeure, whilst a number of our suppliers have, a number of our competitors have.
You know, we've tried to assist as many farmers, as many mines, and as many manufacturers with supply during these difficult times. We've continued to improve our plant utilization. I think our manufacturing and supply teams have worked well together. We've grown our African footprint. You see an incredible result coming out of Brazil and Australia and a very pleasing growth there with a lot of plant utilization still available. From a mining perspective, you know, BME again, you know, great safety track record. You know, also operating in very, very difficult territory, securing business, renewing contracts, and supporting mines that are running out of explosives due to supply chain issues.
We continue to invest in our people in the BME business, 'cause there's a lot of expansion taking place there, and we continue to think carefully about capital allocation. I think I've said it before, you know, capital allocation is not just about allocating, but it's also about taking away. You know, we continue to look at our assets and see where our assets are not performing and to make the necessary difficult changes that are needed there. From a chemicals perspective, you know, the Protea Chemicals business has had a very good six months, you know, and great performance there. Whilst revenue is slightly up or flat, you know, profits are significantly up, and Stephan will talk a bit about that later.
From a margin perspective, we've given you margin guidance, ranges, I think all of the margins are moving in the right direction. There's still a chunk of value we can unlock in the BME business. I think, you know, there were some headwinds there in terms of supply chain, supply of used oil and others that has impacted that margin. However, still an improvement on the last half. I think we're pretty pleased overall with the cost discipline, with the management of customer delivery, you know, and with the profitability that we're seeing in our business. There's still more we can do. Obviously it's been supported by higher commodity prices.
I think, you know, you know, we've got a very complex purchasing strategy, a very diversified supply chain between local and global suppliers. I think you all know that we buy locally and we buy globally ammonia. We bring that ammonia in, it's stored in Richards Bay at the RAM Terminal, and then it's trained up to Sasolburg. In a time like this, you know, where you have three weeks, maybe longer, where trains don't move, you know, we then use our onshore provider. We manage our processes and our facilities to ensure that our customer needs are still met. To date, we've been able to do that with significant disruption locally and significant disruption with the train lines.
It's great to know that our trains are well-maintained by our engineers and our folk, you know, and all of our trains are able to move and move seamlessly between Richards Bay and ourselves. Obviously, we're still reliant on Transnet's rail lines to be there and the locals to pull our trains. If I just move to the big topic of working capital, and I think this is an incredible story, and I'm gonna spend a little bit of time on this. I think what you've seen is the last few years, you know, Omnia performing very well in a lower commodity price space with lower working capital. What we told you at the end of the year, we said that we want our balance sheet to work harder.
We said that we have got flexibility on our balance sheet. We have got balance sheet strength. Actually, you know, maybe we're entering into a time where we can put that balance sheet to deliver higher returns, higher profits, and actually we can put a bit more money into working capital. What you're seeing here is we've put ZAR 3 billion into stock. We've thought very, very carefully about which specific stock items to put that money in. We've thought how we price the nitrogen molecule. We've thought about whether we build that stock in BME, in agriculture, or in trade sales. We've looked at the stock turnover cycle in the mining business, the agriculture business, and we very carefully went and took positions to have a very strong position in stock for the planting and the mining season.
I guess what you're seeing is even doing that, you know, we still deliver a cash positive position and you see the impact, or you will see the impact of this on our future results in the coming periods. We've managed our receivables well, and our team has done a good job there. Obviously, our supply chain finance continues to be in being rolled out. You see a nice uptick in payables, which means the impact of the increase of stock is muted on the working capital cycle. What we do know is that, if you ask me, how's the planting season going?
What we do know is when farmers see a rising commodity cycle, they want to buy fertilizer quickly and get it in as cheap as possible, and we all would do that. When we entered this period with the higher prices, farmers then said, "Let's wait a little bit, you know. Let's see the commodity cycle turn down, and you know, let's get the fertilizer a little bit cheaper." Unfortunately, what's happened is, you know, the prices haven't come down, the demand for fertilizer is incredibly high, and the supply chain issues have resulted in significant shortages. In our business, what we've seen is last half year. We had a whole lot of pre-buying happening, a whole lot of volumes coming in the first six months of the year. This year, those volumes have moved to the second six months of this year.
I guess what you're seeing is a great result overall with a lot less volumes, 'cause those volumes are moving, have moved to the second six months, generally. You know, there's still volumes, and you will see that in one of the annexures, you know, Stephan can talk through. Overall, what has happened is the season has moved back to a little bit of more normalization, in the second six months of the year, and we've positioned ourselves very strongly, from a mining perspective and an agriculture perspective. What's great is, you know, we can. The rains has arrived. You know, the plants are very busy. I was at Sasolburg on Sunday, and it was so pleasing to see the amount of trucks and fertilizer going out.
I think what was even more pleasing, which our director of sales and marketing, 'cause I sent a picture, and I said, "It's great to see the fertilizer going out." He said, "Seelan, it's even greater to see how good the bags, the brand, and the quality looks." I thought, "Hmm, that's I." You know, so I thanked him for that. You know, but our fertilizer looks good, our plant looks good, and obviously what you're seeing is, you know, all this fertilizer, you know, going out as planned. I think the working capital situation is particularly pleasing. I think we're seeing, our stock positions in Zimbabwe and Zambia and in SADC, you know, working through the system the way we would like.
It's great to see us being able to deploy our balance sheet strength to deliver this to our customers firstly, and to generate the profit and the value it generates for us, which you see in our results. All of our businesses, you know, the mining and the agriculture have had a increase in working capital, and I think I'm really pleased that we're able to do this, you know. Some of you will say, "Seelan, why didn't you do a bit more, you know, so that you can use your balance sheet further and go into a little bit of debt?" You know, however, you know, we've looked at the different products, the grades, and we've done what we believe is prudent from a working capital perspective.
From a CapEx perspective, also well managed. Our teams have a very robust process in managing capital, so I don't think you need to be concerned that we are just building another ZAR 1 billion plant on the side or doing anything untoward. Our teams are managing capital very prudently. We're using capital to strengthen our core in SADC. We're using capital to build some more rail wagons, which I've said, and we're using capital to expand in our AgriBio and our BME international businesses in Canada and Indonesia, where we've got partners, and those are moving swiftly ahead. We are exploring very religiously to expand our Australian business, both the agriculture and the mining business there, whether that be from an organic or an inorganic perspective.
Overall, from a track record perspective, what you see is another six months of enhanced margins, another six months of enhanced return on equity, another six months of well-managed working capital. This time, in a much higher commodity cycle, a different cycle. I think it's good to see how we flex our muscle in a lower commodity cycle, how we flex our muscle in a higher commodity cycle. I guess what you'll see is how we flex our muscle as the commodity cycle comes down, maybe in the next 12 months or 24 months. You'll see how we flex our muscle in a good rainy season, in a dry season. All of that really comes together with us adding more value than the actual commodity.
In all three of our businesses, whether it's agriculture, mining, or chemicals, all of our CEOs in those businesses are focusing on adding more value to the end customer. Whether that's agronomic services, whether that's soil testing, whether that's blasting technology, you know, whether that's the ability to blast in very reactive and strange land, you know, or whether that's check services in our Protea Mining Chemicals, all of our MDs are focused on adding more than the commodity. I think that helps us manage the business in changes, in volatility, that's become the norm.
From a cash perspective as well, a continued track record, you know, cash well managed, you know, dividends being paid in this half of the year and last half of the year, from a timing perspective, and our cash being very prudently managed. Our capital allocation and, you know, either Stephan and I or I keep putting this up just to remind our investors that we will be very clear about how we manage capital. We will continue to maximize our cash flow. You will see when he speaks, how much cash we generated in the period and how we deployed that cash into working capital. We will focus on investing cash to protect our core. We will focus cash on expanding in selected markets.
Any free cash, we will return to shareholders by the way of ordinary or special dividends. We will continue to ask permission of our shareholders for share buybacks as well, so we have the flexibility of that in due course. You know, in looking at this, the board also assessed, and you'll see that in our results, the board assessed our cash position. Over the last few years, you know, the board has made a decision to assess dividend and pay dividend on an at the end of the financial year.
Again, at half year, we, the board has met and we've had those discussions and we agreed to reconcile the books at the end of March and then make the decision around dividend, you know, whether that be ordinary dividend, special dividend, or other, at that point. I think what I will say is we will continue to manage the balance sheet prudently, we will continue to manage cash prudently, and that is expenses, working capital, CapEx, you know, and cash generation. I'm gonna pause here and hand over to Stephan, and he's gonna go through the results in a little bit more detail. I will come back, and we'll be able to take questions thereafter. Thank you.
Yeah. Thank you, Seelan, and good morning everyone, and for the folks on the line as well. First of all, I think I feel very privileged and proud to share this exceptional results with you, generated by all the folks in Omnia. Maybe just before we jump into some of the details, you know, of the numbers, maybe just a quick update on the SARS matter since year-end. At the end of September, we actually received feedback from SARS on the matter at hand. Basically, SARS partially allowed some of the objection that we actually sent through. Basically, it's a bit of a process from now going forward. Omnia will lodge an objection to the revised assessments by the 12th of December.
From that process going forward, we expect the ADR route to play out. That is a bit of a process. There's a 90-day window which by SARS and Omnia will assess the matter from that point of view. If the matter cannot be resolved within the 90 days, basically that will move towards the tax court from that perspective. We've also in parallel executed on the MAP or the Mutual Agreed Procedure, which actually takes into account the double tax agreement between the South African and SADC countries. From a Zimbabwe point of view, as Seelan mentioned, Zimbabwe remains a key market for us. It's an iron market on our doorstep that we actually can support out of Sasolburg.
What played out in Zimbabwe, you know, is, on the 20th of May, there was introduction of a new change in monetary policy. Effectively what played out there was disproportionate Forex movements. Effectively what played out, the U.S. dollar stock that was procured, that brought into the country, since that period with the, with the introduction of the new monetary policy, there was the disproportionate unrealized Forex movements coming into play. Unfortunately, it's right over our half year, which you can see in all the results. What we can see playing out after year-end, as we liquidate that U.S. dollar stock, for U.S. dollars, we get the opposite playing out in disproportionate gross profits coming through, after year-end.
If we look through the cycle, as Seelan mentioned, you know, strong performance by the teams, still generating U.S. dollars and profits throughout the period. We generate $2.7 million over the six-month period. We've actually externalized close to $19 million as well, which is a strong performance by our local teams. Maybe just jumping into some more of the details of the numbers. From a revenue perspective, revenue was up 23% and gross profit was up 32%. Maybe on the gross margin, just to highlight a couple of factors in that. If you cast your mind back to year-end as well, the fixed price contract in Zambia, that is non-recurring in the current period.
Obviously, had an impact on the gross profit numbers, as well as the elevated gross profit, the stock that was already liquidated prior to year-end. You can see that's coming through the gross profit line as well. Shift to the margin mix, and that comes across all our businesses, but obviously sticks out fairly boldly in our Protea business. That was slightly offset by some of the challenges in our mining business, more specifically the used oil that had a negative impact on the margins. If I move maybe further down the income statement, if you look at our distribution and admin expenses in general, really well managed in a high inflation environment from that perspective.
That re-resulted in operating profits all baked in of ZAR 800 million versus ZAR 679 million in the prior period, an increase of 18%. The slide that Seelan just touched on earlier in the base, if you then isolate the Zimbabwe component, that resulted in a ZAR 1.1 billion operating profit in the current year versus ZAR 700 million in the prior period. Also a significant increase in the margin from 7.5% to 9.2%. If I just move us down, maybe to highlight the income tax expense. You can see there's increase of 18% in the income tax expense on our income statement.
A big driving factor from that point of view is in the comparative period, Omnia was still in a sales loss position, which was utilized in full in the prior period. That also resulted, and which I'll touch on in the cash flows, a bigger provisional payment being in a tax-paying position from that perspective, as well as the effective rate increasing slightly to 31%, that is on the back of intercompany dividends resulting in additional withholding tax payable in the SADC region. From an EBITDA point of view, you know, cash is a big driver in our business that we focus on as the management teams. If we just isolate the Zimbabwe impact, you can see a big increase in the EBITDA, increasing from ZAR 1 billion to ZAR 1.4 billion, a 30% increase.
You can see that playing out across all our businesses, a really strong performance overall. If we jump into some more of the details, specifically in agriculture, more specifically agriculture RSA, you can see a significant increase in revenue of 34%. That's due to a big drive through our marketing teams, our rhizology concept. You've seen managing the on-farm risk from a customer's perspective. That was also supported by higher commodity prices, I suppose the key thing to highlight, the 30% increase versus the comparative period. If you take into account in the prior period, the farmers actually bought some of the inputs earlier, versus we're in a more normalized cycle. It just puts that performance really as exceptional in the first six months for this year.
Well supported by agile supply chain, which Seelan touched on in the macro environment, which was really challenging over the last six months. We spoke about Nitrophos in the past, the additional Nitrophos benefits, which you can see playing out through our margins, as well as a sustained offtake by our mining division and additional trade sales, which really supported production efficiencies. That all resulted in operating profits being up 22%. If we look at the international business, we've added additional disclosure, maybe just to highlight the AgriBio business as well. Overall, the international business, the revenue down 22%, and that is the majority of that is due to the fixed priced contract in Zambia which played out the game earlier in the first six months in the comperative period.
Also, the fixed price contract had a negative impact on margins, specifically in our Africa operations, which you can see was sitting at 2%, 2.7% in the prior period. In the current period, a pleasing increase to 10.5% for the first six months. I think some of our growth areas to highlight is our AgriBio business or our business out of Australia and Brazil. You can see really strong performance by our business.
Close to 40% increase in operating profits, lifting it to just over ZAR 100 million for the first six months at a very steady, healthy margin of 32%. Strong performance out of Brazil, with growth in volumes and also export volumes out of Australia going to our Southeast Asia markets. You can also see we expect growth into the future out of our new footprints coming out of the U.S. as well as out of Europe. Overall, if you look at the growth here in AgriBio business from a production point of view, we're still only utilizing about 50% of our humate production capacity, which poses us well for the future for additional growth, as well as the commissioning of our Kouga plant that's further gonna enhance this return.
Maybe just to put in perspective the ZAR 105 million, if you take it, this business and what played out in the prior financial year, for the full financial year, generate operating profits of ZAR 107 million. For the half year today, we actually generated ZAR 105 million, which poses us well for the significant growth into the future in this space. From a mining point of view, overall the mining business, as Seelan touched on earlier, the targeted margin ranges, we're not there as yet. There's still a lot of work to be done in this space, in our mining business. You can see revenue up by 26%. There was multiple contract and extensions that was agreed in the first six months of this year. That was also well supported by the higher ammonia price.
There were some challenges. There was a lot of challenges specifically playing out, some of them highlighted on the slide, but we've got additional disclosures in the long form as well. The industrial action, you know, load shedding and some of the [RCR ]issues that was faced the business specifically in South Africa. What we mentioned, the used oil impact. Used oil had a negative impact on our margins for half year. The team has improved the used oil processing and collection from that point of view, and we can already see our margins returning past half year, more heading towards our targeted margin ranges. Operating profits being up by 53% and operating margins being up from 7% last half year to 8.5% in the current year. From the international point of view, revenue up 37%.
Certain challenges faced throughout across our international business. The revenue support came from our Protea mining business that really performed well in the first 6 months of the year with volume growth as well as margin growth. From a BME perspective, some challenges played out in Zambia in getting the new contract to ramp-up phase from that perspective, as well as a volatile environment still remaining in West Africa, negatively affecting margins from that point of view. Overall, operating margins at 8.2% in line with the prior period. From a chemicals point of view, revenue fairly stable in relation to the comparative period. That is in line with the chemical strategy to move towards value-added, high margin mix products.
That's playing out in our consumer care, industrial chemicals, as well as in agriculture. We can see further enhancement going forward from biodegradable chemicals, from the cleaning side, which will result in driving the margins going forward. Also, really strong performance from a supply chain to ensure we can, during all this disruption, supply at the demand of our customers. There was also some one-offs to highlight that came through our chemicals business. The sale of the Jacobs site in Durban resulting in an accounting profit of ZAR 34 million for the half year. That was also slightly offset by accelerated amort, specifically in IT software, as well as impairment on discontinued brands. From a balance sheet review, Seelan touched on the strong balance sheet as well as the working capital.
If I look at the assets were up by 20%, mostly driven by the inventory. We spoke about the high commodity cycle currently driving up the inventory. Also, slightly more volumes as well as a weaker currency driving it up overall. That was slightly offset by the sale of the Umongo asset. You can see that this asset held for sale, that actually declined versus the prior period. If you look at the liabilities, similar trends on the creditors playing out. If you look at the story of our balance sheet overall, you can see it's a story of working capital. Increased working capital overall, which puts Omnia in a really strong position for the second half.
I suppose the key theme to take away from our balance sheet is being in a net cash position at half year, taking into account the investment in working capital, and that bodes us really well for strong performance in the second half. The movement in cash. The current slide up on your screens is maybe just to give a picture to our shareholder community on how the cash has actually moved only in the last six months. At year-end, we were sitting at close to ZAR 2.4 billion worth of net cash from that point of view. Since that period, we've actually paid the dividend, which was roughly about ZAR 1.3 billion from that point of view. You can see we've actually generated a lot of cash in the first half.
If you take into account a big chunk of our agriculture business will still only play out in the second half. Strong performance coming through our chemicals and mining business as well. You can see the investment in working capital, close to the ZAR 1.6 billion-ZAR 1.7 billion point of view. Maybe just to tie the loop for the investors, purely, the cash flow movement versus on the face of the balance sheet. There's Forex movements or derivatives that tie that up, which is non-cash movements on the face of the balance sheet. This was actually the cash movement from that point of view. The big cash movement in tax resulted mostly from the provisional tax payment, as I mentioned, being in a tax paying position leading to half year.
That resulted being in a net cash position of ZAR 140 million at half year. More detailed, if you look at the total cash flow statement from that point of view, we've touched on the movement in the cash generated. Just purely from a working capital point of view, the working capital due to supply chain finances, each two separate lines on the face of the cash flow statement. The ZAR 1.5 billion in working capital further down, you will see under the financing activities where supply chain finance get disclosed, that gets highlighted there. You can also see the big dividend payment that went out, the ZAR 1.3 billion versus ZAR 1 billion overall. That resulted in an overall net cash and cash equivalent of ZAR 960 million at year-end.
A really, really strong performance of the team. Thank you. I'll just hand over to Seelan to close out.
Thanks, Stephan. I think it's, I mean, it's fair to say that our finance teams have done an incredible job, you know, to one, you know, manage our balance sheet and our numbers the way they have, but also, two, I can tell you that each half year, our processes improve, our timings get better and an incredible quality of information that we keep enhancing for our shareholders and adding to the disclosures we make. I'm gonna wrap this up, and we'll then open up for some questions. I think the first thing, s orry about the slide. I've just gone a few slides ahead when I did this presentation earlier. I spoke differently, and I see the slides got changed.
In wrapping it up, let's just talk about where growth will come from. I think the first thing to state is that Omnia is positively leveraged towards global mega trends. When you think about population growth, and you think about population and people needing food, you know, that's where we play. We make sure that there's critical inputs, technologies available to enhance food security across the world. When you think of population growth, and you think of people moving into urbanization or moving into cities, you know, folk need jobs, folk need minerals, folk need resources, and that's where our mining business plays. You know, both our core businesses, agriculture and mining, is well-placed to benefit from these global mega trends.
Both our core businesses are well-placed to also benefit from ESG objectives of decarbonization, of using natural resources efficiently, and of dealing with some of the impacts of climate change. When you think of us as an investment, when you think of us as a company, you know, one, we've got a noble purpose, but we're well-placed to actually benefit from these trends that take the world forward. I must go backwards now. Where will the growth come from? The first thing I can tell you is, you know, whilst we've delivered such great results, you know, been able to make such a great impact, there's still further value to unlock.
We did not tell you that we're gonna deliver good results in a high commodity cycle, in a low commodity cycle, in major disruption in supply chain and all of those things. We said we will deliver consistently through the cycle. We will continue to focus our business, to deal with shocks, to deal with headwinds, to deal with tailwinds and keep moving our business forward. What you see now is a set of results where we've been able to deliver in a more volatile and a much higher commodity cycle. The first thing that gives us a lot of comfort, and I think will give you a lot of comfort, is that we have significant value to unlock in our core. Stephan mentioned our plant utilization in Australia.
You know, we've got significant value to unlock out of that plant. We are building out distribution, and we believe that that will unlock more value from our current core. We haven't correlated these exactly, so we've just put 100% and we've put some bars. Don't ask us for the exact spaces, but what you can see is we've got a chunk of further optimization to be done across all of our plants. An incredible amount of value being generated out of the nitrophosphate plant.
I did take a photo on Sunday of the Nitrophos powder, and I sent it back to the team, and I said, "This is the most valuable section of the plant." You know, Francois and the team have done an incredible job there to unlock the financial benefit of that plant, and there's more to be done there. We know that the Nitrophos, the price of the acid versus the rock has not correlated, there's a big benefit for us there. This is where value will be unlocked firstly. Secondly, we are well-placed in this growing high-demand biostimulant market.
We've said this before, we've spoken to you at our investor show a month or two ago, and we said we've got a business in this space which is faster-growing, which is unique, which is worth a lot to us. You know, you see this business doing, you know, Brazil and Australia doing at half year almost what it's done at for an entire year last year. There's still significant growth there. This business has got much higher multiples attributed to it. You saw what we sold Oro Agri for, and we believe we have a gem of a business in Australia. You know, we've been building out distribution in Pakistan. We've been building out distribution in Vietnam. We've done something in the EU. We've put some folk down in the U.S.
I think James and the team there still have a chunk of value to unlock out of this business. We continue to invest in registrations, and we continue to safeguard and manage that plant well. We've looked at plans of expanding it. We've secured the feedstock. We've got, we've commissioned a calc plant in the last period, and Stephan shows you how well the margins, the GP margins, and margins are doing in that plant. There's a significant amount of value to come from our Australian operation. What we also do is we continue to do trials and assessments across the world. You know, Omnia continues to register products. It continues to do R&D.
It continues to invest in all sorts of research activity that will stand us in good stead to grow globally. I was saying when this slide was prepared, our chief agronomist specifically put biotic and abiotic stress mitigation and recovery to make sure that I'm on my toes. I will later on take him on about what the actual definitions of those are, 'cause I spent last night making sure that if someone asked me, I can answer very articulate. I've got a full team of more qualified folk than me here who will answer that. I think we will continue to do these trials. You know, we've set up an office in the Netherlands. We will continue to register our products, and we will continue to invest in new generation products.
That's what you would expect from us. I guess the third area where we believe there's solid growth, you know, for future years is in our BME business. Our BME business has demonstrated the ability to serve customers by having the Omnia supply chain and manufacturing inside it. Our BME business has demonstrated the ability to do very large blasts in very complicated areas, with very scientific analysis to demonstrate the value add to our mining customers. We're expanding the business in Canada. We've got a partner, which is the largest drill and blast company in Canada, Consbec. We've got two detonator plants being shipped over. I think the one has arrived, and the other's still on its way. That's been set up. We've got an emulsion plant. The facility is looking good.
We've got a customer that signed up already. We believe that there's significant value for the BME business in Canada. In Indonesia, we've got a joint venture partner there as well. We're at the tail end. It's been very difficult to complete, all the legal agreements, but we're at the tail end of having that solved in the coming month or two. We continue to look for a bigger business in Australia. We are invested from the ground up, and we expand from that perspective, but we also look for a potential inorganic opportunity there for our explosives business. As I said, whenever I mention inorganic, I couch it with being careful, being considered, you know, and our very robust capital allocation plan.
Three areas where you will see growth. Our current invested capital, we believe we can deliver more growth from that. Our AgriBio business globally and our explosives business globally. That'll all be underpinned by these mega trends of population growth, of food security, and of mineral extraction. Having said all of that, we've put out some margin guidance. We believe this margin guidance still holds water in a high commodity cycle, in a low commodity cycle, with some tailwinds and with some headwinds. We did say that we will look at revising those margins up as we move forward, but I think it's pretty pleasing to see how we've performed against this margin guidance.
You can see that there are still businesses where, you know, we can do more, and we can extract more margin in the medium to long term. Obviously, why margin is important is because that ultimately increases our return on capital, and that's a measure that we heavily focused on. Enhancing shareholder returns, we will continue to focus on our ESG objectives. We will invest in R&D and innovation, which is important to us being a science and a chemical business. We will defend, protect, and grow our home base. We've got a significant presence in SADC. We've got a significant role to play in GDP across the African continent, so we'll continue to protect and defend and grow that. We will expand internationally carefully with partnerships.
We will make sure that when we explore inorganic opportunities, we will do that in a careful way. We've still got a lot to do on our operating model and to get our business, you know, fitter, to get our business more agile, to get our business more synergized. Finally, we will invest capital in a very disciplined manner. I'm not gonna go through this slide, but really, you know, five key points. We operate in primary sectors. I'm just doing it the other way to make sure everyone's awake. We operate in primary sectors that have got a high resilience during downturns. We've got some very distinct competitive advantages.
I mean, it's so good to see our nitric acid plants doing what they're doing when so many plants have gone through difficulties. That talks to our maintenance. It talks to the investments we've made in plant and equipment over the last few years. You know, we will continue to focus on excellence. I suppose when our chairperson spoke just now, you know, a number of our sentiments was around continuous improvement, you know, excel, do better. That is something that we will build in our organization so that every day we do what we do today a little bit better than we did it yesterday. We've got a very focused business model, you won't find us deviating too far from our core. You know, we're not going into the packaging business.
You know, we're not going to buy or do something untoward. We're gonna stick to our knitting. I think finally, we will manage capital carefully. We will manage capital robustly, and that is allocating and taking away. There are times when we take away, when we say you know, you're not gonna buy that stock, you're not gonna take that position, or you're not gonna, you know, have that warehouse because it's underutilized, and we're gonna sell it. Capital allocation is both allocating and taking away. I guess in closure, you know, this is a very, very strong set of results. It's an exceptional performance with supportive commodity prices. You know, I'm very pleased with what the team has been able to produce.
I just wanna thank all of the people of Omnia, the 4,000 people we've got in a number of countries. I wanna thank our suppliers. I wanna thank our customers, our mines, and our farmers for all of their support, our manufacturing customers for all of their support. Finally thank the board, our shareholders, and all of our other financial partners, our banks and folk that have come together to make this lovely 70-year-old company a success story, you know, and deliver the pleasing set of results you see today. Thank you very much. We will open up for questions, and Louise will manage that.
I do have a number of our management team here as well, so, you know, I will lean on them to help Stephan and I answer questions, if needed.
Are there any questions from the floor? There being no questions from the floor, we'll go to the webcast. We have a question from Itumeleng Seanego From Eskom Pension and Provident Fund: Your revenue growth of 23% is largely driven by steep price increases, which seems to come at the expense of volume. How sustainable can you continue to pass these steep price increases to your customers before you can see quite a negative volume reaction versus the current volume decline rate? i.e., in your agriculture S.A., price increase was on average of 48%, with a 14% decline in volumes. In mining RSA, it was a 36% increase, with 11% decline in volumes.
Great. Thanks, Itumeleng. I think let me first contextualize what happened in our business in this 6 months versus last six months. Last six months, or the first half of last year, we saw a steep increase in volumes because the purchasing cycle moved earlier. We were in a time where customers thought commodity prices were rising, so a lot of our sales happened in the first six months of last financial year. Two big drivers of that was our Zambia tender or Zambian contract. That contract actually a large chunk of it happened in the first six months of the year. It enhanced profitability and enhanced volumes in the first six months. Similarly, our SADC customers were also buying a lot earlier, and the volumes were up.
This year, what you're seeing is a more normalized cycle. The Zambian contract specifically has been delayed. You will only see that come through in the second six months of the year. Our SADC customers have also bought later. You know, two things there. I think outside of South Africa, a lot of complexity to get, to get contracts, to get logistics, to get governments, to get service providers working together. And locally, you know, farmers sitting back and saying, "You know, let's wait for the commodity prices to come down." I think what we've seen now is the commodity prices have held where they held and the rain has come, you know, so, you know, our products have moved out.
I guess what you're not seeing is volume destruction based on increased prices, Itumeleng. If you're asking me, you know, did the commodity prices increase to a point where Omnia had to increase its prices to a point that customers are now not buying, I think that would be the wrong assumption to make. What has happened is there's been a delay in the volumes, and you will see those volumes coming through in the second half of the year. It doesn't concern me. It doesn't concern me as in, you know, if there's a, you know, 'cause you've got to think about how much orders we've got in, what our order book looks like.
You've got to look at how our sales and marketing team are delivering against that order book. I guess what we've done is we've managed the inventory levels and the price risk that sits in that inventory levels very carefully. I'm hoping I've answered your question. I don't know if there's anything anyone else wants to add from the team here.
Thank you, Seelan. You've actually answered the next question from Jovan Jackson at Laurium Capital. He actually wanted to know about whether you expect overall volume growth for the full year in RSA Agri, given the delayed purchases. You've already answered that one.
Let me just make a comment on that. I think, what is very important to us and our sales and marketing director, you know, generally has a baseball bat this high, and he's hitting me with that bat every day. He reminds me that volumes are important, but profit is more important. I guess, Jovan, we've got we do have a key handle on volumes and inventory levels, but for us, the profitability of the stock is more important. We said that before. The stock turnover cycle in our mining business is very short. It's 30-60 days maybe. We will allocate our product to the shortest stock and the highest margin stock. I think the team have done very well, you know, in terms of in terms of doing that.
You would see that going into the planting season, we had a number of high Nitrophos grades, you know, which is good for us and good for farmers. I think having said all of that, you know, we speak a lot about Omnia being a purposeful, noble business, we also need to be very responsible. You know, we're dealing with food security. It pains me to see farmers needing fertilizer and needing product and not having it there because suppliers do not have the strong supply chain as Omnia or do not have the balance sheet as Omnia to actually buy the stock, you know. I wanna continuously encourage, you know, our farmers and our mines to make sure they deal with providers that have the security of supply and balance sheet to actually deliver the product.
It's sad if a farmer is unable to plant because the service provider is not able to deliver the stock.
Thank you, Seelan. The next question is similar to what you've just spoken about from Wessel Joubert of Oyster Catcher Investments. If commodity prices were to pull back, do you think that you should be able to hold on to margins?
Wessel, we've put our margin guidance out without knowing what commodity prices will be. Our teams have a number of plans in place to manage our business in a low and a high commodity cycle. We comfortable with our margin guidance for the medium and long term. You know, I think what you're seeing, if I go back to that slide, what you're seeing is fairly okay delivery against that. You know, certainly from the overall group and agriculture. I think where we a little bit, where it's been very, very painful is our explosives business, where, you know, we would have liked that business to be closer to 10%. Now Explosives CEO says, "Watch this space, it's coming." We'll...
I'm comfortable with our margin guidance, and I do think, you know, if prices come back a bit or if prices go up a bit, you know, our margin guidance still holds. We've got a lot of initiatives we still need to execute, you know, which will in the long term, I think I'd be disappointed if we don't revise these margins up. Obviously, in the short term and the medium term, this is what it is. You would remember that we actually took away a little bit of the tail. As all of our projects start being executed, you know, I'm comfortable that this margin guidance, you know, we will continue to deliver it and be focused on it and actually grow it over the long term.
Thank you, Seelan. Another question from Itumeleng of Eskom Pension and Provident Fund: Has the global supply chain disruptions led to market share gains for Omnia? The imports of urea or ammonia into the country would have been impacted, leaving farmers, who would not ordinarily buy from Omnia buying from them. If these supply chain disruptions ease, would the market share gained also be lost?
Yeah, sure. Itumeleng, our business and our relationship with our farmers and our mines are long-term relationships. To change a mining contract in...You know, an iron ore mine in the Northern Cape, it doesn't happen overnight. It actually takes months and months of planning, and processes to do that. I think the supply chain disruption has really taught our mines and our farmers that Omnia is stable, secure, and delivers. What it will do is it will lead to market share gains in the medium and long term for us. What it has done is it has delivered some short-term opportunities where we've been able to unlock value in the short term.
I think as a business, you know, a short term or a once-off deal is great, but it's not our focus. Our focus is the long term. Our focus is to make sure that as these mines diversify their supply chain, that we're well-placed to secure new business. We have secured new business. Our focus is long-term recurring business, not just short-term sales due to supply disruption. I'm hoping I'm answering that okay. There have been instances where a number of our farmers and our mines, you know, have asked us to do things differently 'cause they want enhanced supply security. Asked to increase safety stock, asked to increase stock closer to the sites, which we've done. You know, has that resulted in short-term gains for us?
It probably has. You know, we probably have got some tons of fertilizer or explosives, but our focus is the long-term contracts that will actually be long-term recurring business for us. That's where our BME business, I think, is really well-placed. I think what we've seen is, our BME business with Omnia supply chain and manufacturing's inside has been one of the few businesses that has not let customers down, that has not declared force majeure, that, you know, has had a great flexibility of supply chain and that has placed us very, very well for the coming years ahead.
Thank you, Seelan. Just a reminder to those on the webcast to please post your questions on the Q&A tab on the webcast. The next question comes from Cobus Cilliers’ of All Weather Capital. Well done on a good set of results. Just wants to find out about the comment on inorganic growth. How will any future acquisitions be funded? Will it be internal cash or debt-funded? What ticket sizes will be considered?
Yeah. Sure. Thanks. Thanks, Cobus. I think before we, you know, talk about an acquisition or the size, I think the first thing we're focusing on as a management team, and the board's been very clear on, is the rationale. Be clear that if you're doing something, it fits your rationale from an ESG, from a business perspective. I think we've cleared that up, that the areas we will focus on is AgriBio International and Mining International. In doing that as well, you know, we also said we want new generation products. We want products that are more sustainable and businesses that are more sustainable than the traditional bulk explosives and traditional NPK.
Having said that, you know, we explore various opportunities in those two spaces. Should we find the right opportunity that works for us, we will then look at whether we fund that from our own cash reserves and resources. You know, you will see in our long form, I think it is, we talk through what our current facilities are with the banks. I think that's all there. And you'll see a large chunk of that, I think it's north of ZAR 3 billion, is not utilized. Then we obviously have opportunities to debt fund as well.
I think what Stephan has said, I don't think he said it today, but he said it previously, you know, we would consider between 1 and 1.5x EBITDA of debt should we want to buy something. Having said all of that, I think you've got to weigh your risk return and be very careful that if you put debt on a balance sheet, that you understand the implication of that. You know, I've often had shareholders tell me, "Well, why don't you just take ZAR 1 billion or ZAR 2 billion of debt because you're gonna lower your WACC and increase your return?" I think that does happen, but also what you do is you change your risk profile.
I think what we're doing is we're gonna be very, very disciplined about our capital allocation. Every now and then, you know, you might shout at us and say, "You're too conservative. You know, you could do this or you could do that." What we're gonna run is a very prudent company over the next few years. I'm not giving you a specific number or ticket size because I don't think our management team must be looking for a ticket size. I think our management team must be looking for the right acquisition that delivers us the right return on capital and in the right space. You know, having said that, you know, we're able to digest, you know, I've given you parameters of how we would think about it.
Thank you, Seelan. Perhaps we can just go back to the floor if there are any questions? The webcast questions are complete.
Hi. Good day, Seelan. Bruce Williamson, Integral Asset Management. Could you maybe give us a little bit more information on the wagons that you've purchased and the sort of type of agreement that you've managed to get with Transnet?
Great. Thanks, Bruce, and pleased to meet you. We own roughly 180 wagons. Those are ammonia tankers. They transport ammonia between Richards Bay and Sasolburg. We have them split into roughly four block trains. A quarter of them going to Richards Bay, a quarter of them coming from Richards Bay, and a quarter offloading in each area, just broadly. What we've seen with the issue of Transnet and the disruption that we face, we've decided to order another 20 of those. We might order more. There's quite long lead times to build and make these. We would just like to enhance the number that are moving between the two points. There are other.
there is an open fleet, Transnet does have some wagons that they own. Unfortunately, those wagons, you know, have not been maintained adequately and are not in circulation. We prefer to have our own wagons that are maintained by our people, our engineers and mechanics, and those wagons are on our balance sheet. All we've done is placed an order with the supplier to build them, and they will start coming off one every few weeks or months over the next 18 or 24 months. Have I got that right? Yes. They're on our balance sheet, and we will own them. What that does is it gives us the flexibility of supply. We get ammonia.
Jacques buys them, buys it from across the world via an ammonia trader, and it comes on a ship. That ship gets offloaded in Richards Bay. We then put into a terminal there, and from there, we put it into our trains and bring it up. We then have a second source, which is from Sasol locally, and that's via pipeline. Obviously we're then able to manage those two providers. I don't know if Francois or Jacques want to. If I've said everything?
Just to point on the wagons, they have to go on statutory as well. We need extra capacity when we take them off for their statutory work. That's why we're building on more capacity as well. David. Sorry.
Okay.
How long is the contract for? Is it renewable?
We don't have a contract for these wagons. They're our wagons, so we own them on the line. We have yeah, an open-ended SLA with Transnet to move them on the line.
Yeah.
Yeah. I think what we, you know, Bruce, what we are taker of is the line. Firstly, we are taker of the line must be there. I think what we've seen of late is the whole line could disappear. You know, then we know cable theft and the, you know, the electricity to the line could disappear. I guess what Transnet's requirements are is that they need to provide the locomotive to pull the train. If we could, we would buy the locomotive as well, and I'm sure Francois or I will drive it and get the license to do it and pull the train, 'cause it is so valuable to us. You know, we own the train, we maintain the train, we have...
we can put it on the line, but we still need the line to be there, you know, the cable to be there, and Transnet's loco to pull it around for us. Having said that, we're the company with the best. We've got great resources of our own in this space, and we've chosen to invest it. I think we see now that it's a blessing that we've got these trains, that we own them, that our teams manage them, and we're reliant on Transnet for a little bit less.
Are there any further questions from the floor?
Thanks. Hi, Thulani. Ntuthuko Stihole from SBG Securities. I've got a follow-up question on the supply disruptions. I am curious to know, were you impacted by Sasol's force majeure? In securing your supply of your raw material, which is mainly ammonia, are you looking at any other alternatives?
Yeah. Sure. That's a very direct question. Thanks for that. Sasol's... I mean, there's been a number of force majeures from a number of suppliers. You know, Sasol has had more than one in, in the last few months. You know, there's been one around the Transnet infrastructure that didn't allow Sasol to move ammonia from Secunda to certain places. On that one, we were not impacted because we get ammonia from Sasolburg, and we get ammonia from our trains. That's why I'm emphasizing this, these trains, 'cause it gives us a massive diversification benefit. I guess there's been other challenges around ammonia supply that has impacted a number of folk.
We also get impacted by that, so we also have a reduction of ammonia, or we have a train that doesn't come through. Yes, we are impacted on that, by that, but our teams have been in the strong position of having sufficient agility to make sure that that didn't impact our customers. Would we have liked more ammonia? Would it have been better for our business in the last six months if the infrastructure worked, if Sasol had, you know, done what it... You know, and it's... And I'm saddened by some of the challenges, you know, Sasol has faced, and we work together where we can, you know, to make sure these things all balance out. Would we have liked more ammonia? Yes, we would have.
You know, would we have, would it have enhanced the profits and the value we generated? Yes, it would have. I think what you're seeing is this incredible performance in spite of a significant headwind of disruption and ammonia shortages. You know, the ammonia shortages has impacted the mining sector and has impacted the agriculture sector. I think it's important to know, you know, whilst we all focus on the coal line working to move coal around or on the iron ore line working to move iron ore around, we forget that that coal and iron ore would not move if you don't have the ammonia to do the blast. Often, the ammonia is also a train sitting to get onto the same line, you know, if you follow what I'm saying.
I think I really wanna encourage our mines to think about the critical inputs like the mining chemicals from Protea that's needed, and the ammonia that's needed to produce the explosives. 'Cause if a mine stops because it doesn't have the chemicals or it doesn't have the explosive, you're not gonna get the iron ore, you're not gonna get the coal. Yes, we have been impacted, but we haven't had the need to declare force majeure, and that's probably why a number of us are balding significantly and going gray because we we're balancing all of these things to make sure that our customers get what they need and our company performs the way it does.
Yeah. Thank you. One last question. This one will be less direct. In your net working capital, that's a significant amount to sit in your current liabilities. I noticed that you said you guys are looking at reconsidering your capital requirements. Could you please perhaps give us more color on what it looks like now and what would the ideal structuring of your debt be?
Yeah. I mean, let me just clear this up. In our liabilities there, what you see is the amount we owe our suppliers, and what you've got is some very good work being done by our folk to put in place supply chain finance and actually help our suppliers and help ourselves, you know, with supply chain finance. That you're seeing in that number. I think there's no need to take what is a short-term liability and change it. You know, we're not looking at a capital structure of needing debt to fund any different form of debt to fund our working capital. I think our resources are sufficient to fund that. You know, if that...
I'm hoping I'm going to the right place of why you're asking the question. You know, so we're comfortable with the working capital structure as it is, the debtors, inventories and current liabilities. I think obviously we-- that is being managed on a daily basis by our distribution, our manufacturer, you know, and our supply chain folk. We don't need any other form of liability structure around that. Unless our teams come up with something that is value-adding to us, you know, we're not looking to change that significantly. We will continue to roll out supply chain finance. Some of our businesses have just started with that. There's more value we can unlock out of that, actually, and that's been pretty good for the supply chain at, you know, at large.
It's been good for suppliers to have access to that.
Thank you, Seelan. We have another question from the webcast from Norman McKechnie of Momentum. Your working capital has increased sharply for reasons that you have highlighted. When do you see your working capital levels normalizing?
Yeah. Thanks, Norman. I think there are two things in the normalization. The one is, you know, normalizing as inventory, what's the word I'm looking for? Inventory levels. Quantities come down. That's, I mean, the rain has happened, so that's happened. That's happening as we speak. I think the other side of it is commodity prices being elevated. There will be a level of working capital that will stay in due to elevated commodity prices. I think by year-end, you will see the true reflection of that. You know, having said that, you know, I'm not concerned about our high levels of working capital. I think our team has got that completely in hand.
You know, and the heavens have opened, and the fertilizer has moved in SADC, in Zambia, in Zimbabwe, and in South Africa. You know, they'll. We need the heavens to close a little bit because it's pretty wet in some of the planting areas. Obviously what you're seeing as well, Norman, is that the challenges in supply chain have opened up a lot of opportunities for BME. There's a high level of demand for explosives and fertilizer, not just locally, but also globally at the moment. You know, the more we have, the more we can sell from an explosives perspective as well globally. You do know that we sell product via agriculture business, via BME, but we also do trade sales.
We also sell, on a wholesale basis, which Protea and Protea Mining Chemicals do, into the African and global market.
Thank you, Seelan. There are no further questions.
Okay. To all of our shareholders, our board members, our staff, media, thanks for joining us here. I appreciate your interest in our business, I can assure you that we're working hard to grow, to protect, and to maintain the Omnia Group. The company will be 70 years next year, hopefully you will see in our next set of results continued delivery and the continued trajectory that we're on. I also want to thank all of the people of Omnia that some of them in the room and some of them who will listen to this, thank you for your commitment, your dedication and all you have done to deliver such an exceptional set of results. Thank you very much.