eBusiness Weekly
Enacy Mapakame
Victoria Falls Stock Exchange (VFEX) listed group, Seed Co International Limited achieved earnings growth with profit for the year to March 31, 2021 jumping 81 percent on growing seed demand as the region continues to push for food security.
The group’s selling season witnessed above average rainfall across most countries which drove seed demand coupled with firm maize commodity prices and stakeholders’ support towards food security in the wake of the Covid-19 pandemic.
Resultantly, maize seed volumes jumped 24 percent to 38 300 tonnes from 30 700 tonnes in financial year 2020.
Generally, the year under review was marked by Covid-19 pandemic which had adverse effects on business operations across the region and globally.
“Thankfully, the group was spared the worst effects of the pandemic due to its essential business status as an agricultural entity in its multiple jurisdictions.
“Strong sales volumes and revenue growth was achieved due to heightened seed demand on the back of favourable weather, attractive maize grain prices and Government, quasi-Government and non- Government food security initiatives,” said company secretary Eric Kalaote.
During the year under review, profit surged 81 percent to US$11,1 million from US$6,1 million recorded during the prior year.
An operating profit of US$18,1 million was achieved which was 30 percent above the US$13,9 recorded in the previous year.
At US2,85 cents, basic earnings per share came in 74 percent above the comparable year. According to the group, profit performance improved significantly on robust revenue growth and interest cost savings.
Total revenue rose 26 percent to US$88,5 million on improved seed demand on the back of favourable weather. Gross margins remained unchanged while other income declined significantly as the exchange gains recorded in the prior year did not recur. Overheads rose on the back of distribution costs linked to growing sales.
Total assets came in at US$137,2 million from US$127,7 million in the comparable year. Non-current assets increased due to capex focused on future rental cost savings and enhanced seed production efficiencies as well as capitalisation of associates. Domiciled in Botswana and dually listed on the Botswana Stock Exchange, the group has subsidiaries, associate and joint ventures in Botswana, the DRC, Ghana, Kenya, Malawi, Mozambique, Nigeria, Rwanda, South Africa, Tanzania and Zambia while operations in Angola, Ethiopia and parts of West Africa are at developmental stage.
Receivables grew to US$58,3 million from US$52 million on account of increased sales though at a slower rate due to impressive collections. According to the group, included in the receivables is US$17,1 million due from related parties of which US$7,5 million was settled post year end.
While there are uncertainties due to Covid-19, food security is expected to remain high on the agenda across the region which should continue to push demand for seed.
“However, the regional bumper harvest expected from the ongoing harvest season may weaken maize grain prices though the potential impact on next season’s seed demand is still unknown,” said Kalaote.
The group declared a dividend of US0,97 cents a share.
