The manganese and silicon smelting company with vertical exposure in mining and trading has announced its consolidated financial results for the half-year ended 30 June 2022 (1H2022).
However, it should be noted that with effect from 1 January 2022, the Group voluntarily changed its presentation currency from Australian Dollars to United States Dollars.
The Group highlights strong results in all key financial metrics with substantial uplifts from the previous corresponding six-month period ending 30 June 2021 (1H2021) in net profit after tax (NPAT), earnings before interest, tax, depreciation and amortization (EBITDA), total earnings per share, gross profit margin and net cash generation from operations.
Revenues and gross profit margins during the period were markedly higher despite lower product volumes being sold as compared to 1H2021. The Group’s revenue amounted to US$466.7 million in 1H2022, representing a 35% increase over US$345.9 million recorded in 1H2021. Gross profit doubled to US$129.2 million during the period in focus compared with US$65.6 million in 1H2021, while gross profit margin came in at 27.7% versus 19.0% in 1H2021.
Meanwhile, its NPAT more than tripled to US$60.0 million in 1H2022 from US$18.1 million recorded in 1H2021. For further comparison, the Group’s NPAT stood at approximately US$64.0 million in 2H2021. EBITDA surged to US$104.6 million from US$48.7 million the year before, a significant growth of 114.8%. Basic and diluted earnings per share of the Group stood at 6.69 cents for 1H2022 compared to 1.82 cents in the corresponding period last year.
The overall strong financial performance have been supported by higher prices for manganese ores, ferrosilicon and silicomanganese alloys which have prevailed since Q42021.
The strong market environment experienced earlier this year has flowed through to the 1H2022 reporting period due to prices being set 2-3 months in advance during a period of supply uncertainty in Q42021.
The Group reported an improvement in borrowings to equity ratio from 0.67 times as at 31 December 2021 to 0.54 times with the repayments of approximately US$12.9 million for the Sarawak Project Finance loans and lower utilisation of trade financing facilities.
“Despite pandemic related workforce challenges and the fluid working environment in a year of furnace conversion and major maintenance, we have delivered operationally and the Group has been able to post very robust financial results,” Mr Low Ngee Tong, Executive Chairman and Chief Executive Officer of OMH remarked whilst thanked his staff.
The Group’s flagship smelter complex, OM Sarawak, is predominantly powered by sustainable hydropower, underpinned by a long-term power purchase agreement, providing OM Sarawak with a lowest quartile cost profile and substantial carbon-footprint benefits over comparable peers.
“OM Sarawak has been undertaking major maintenance works since June 2022, but is on track to achieve production of 340,000 to 360,000 tonnes of ferroalloys by end-2022. Meanwhile, we remain focused on our Environmental, Social and Governance (ESG) commitments and are on track to achieve the key targets set out in our Sustainability Statement. We are entering a very exciting phase with major growth projects on hand, and the completion of full ownership of the Sarawak smelting operations is currently underway despite the challenging macro-environment,” he added.
“Over the years, we have significantly reduced our debt to equity ratio, from above 3 times to the current level of 0.54 times. We are of the opinion that refinancing the debt in the near term will create value by transiting out of a restrictive project finance structure, and will allow the company to target a moderate debt level and establish a sustainable dividend policy in the near future,” he added.
OMH has had a primary listing on the Australian Securities Exchange since 1998 and a secondary listing on the Main Market of Bursa Malaysia Securities Berhad since June 2021.
