HARARE – SeedCo’s profit for the year to March 31, 2018 improved to $21,4 million from $20,4 million due to reduced finance costs and profitability from associate company, Quton.
Total group turnover however retreated by five percent to $128 million from $134 million of the previous year largely due to product shortages. The revenue for continuing operations increased seven percent due to strong demand for seed that outstripped supply driven mainly by both retail and Government programs in Zimbabwe.
“A combination of product shortages and mid-season drought experienced in Southern Africa, resulted in 15 percent overall reduction in volumes or the regional business being unbundled,” said SeedCo finance director John Matorofa at the company’s analyst briefing.
The group’s sales volumes were flat at 55,400 metric tonnes while maize volumes were down due to product shortages in all markets.
SeedCo chief executive Morgan Nzwere said due to seed shortages the group is however exploring cob harvesting and seed drying technology to speed up seed availability and contain disease associated with late harvesting.
He said additional seed processing facilities will be set up in East Africa to increase capacity for this growing market.
Winter cereals more than doubled during the period under review due to high demand and improved power.
Overall margins for the group remained unchanged compared to prior year due to increase in volumes of low margin winter cereals and soya beans, despite production efficiencies and price adjustments necessitated by the prevailing inflationary pressures and farmer adoption of vegetable hybrids.
Other income which consists of commissions, exchange gains, doubtful debts recoveries and non-seed sales grew due to increased volume of commission based products.
Operating expenses for the group slightly went up due to continued investment in agronomic and research activities as well as a once-off restructuring of costs.
During the year under review, $7,9 million was spent on property, plant and equipment.
“This included acquisition of land in Zambia and Botswana for production and future construction of a warehouse respectively, capital improvements at various research stations, purchase of a vegetable seed processing and packaging plant by Prime Seed, renovations at the factory in Zambia, replacement of processing equipment in Zimbabwe and additional work on the Kenya facility which was commissioned last year,” said Nzwere.
The seed company declared a dividend of 2,95 cents per share and an additional once off dividend of 1,48 cents payable to shareholders.