ZSE-listed seed producer, Seed-Co Limited has reported a 60 percent increase in its topline over the year to March 31, 2021 as a production and sales volumes also saw an upturn.
Group revenues rose 60 percent to $5,8 billion from $3,7 billion in the prior comparable period, largely attributable to a 36 percent rise in volumes and price adjustments, said management.
Said CEO Morgan Nzwere during the group’s analysts briefing:
“Product availability was good this year but stockouts were experienced both in Zimbabwe and the regional markets due to the unanticipated surge in demand across the board.
“Demand surge helped to run down carryover stocks.”
According to the CEO, profit after tax for the year amounted to $0,8 billion in inflation adjusted terms, a significant improvement from last year’s inflation adjusted loss despite a jump in operating costs.
“Operating costs grew faster in inflation adjusted terms due to exchange rate induced hyperinflation,” said group finance director John Matorofa.
“Finance costs were also significantly up in line with higher interest rates and increased borrowings to finance higher volume.”
In respect of sales, maize remained the flagship seed crop, contributing 55 percent of the volume and growing by 61 percent due to “strong Government and open market demand, as well as 3,600 metric tonne exports to Malawi, Tanzania and Mozambique.”
Wheat sales grew 66 percent, buoyed by a once-off 2000mt export order to Nigeria, while soybeans volume was 17 percent up, driven by strong oilseed local demand. Sorghum and barley was stable.
Seed-Co said other sales were significantly lower than prior due as they was not much deteriorated stock sold as commodity this year.
With regards to the group’s joint ventures and associates, Seed Co International nearly doubled its profit from US$6 million to US$11 million in real terms, while Quton’s profitability halved as its monetary loss also doubled.
Prime Seed (the local Vegetable JV) suffered a loss due to margin erosion mainly attributable to foreign currency losses on imported seeds.
Seed-Co did not declare a dividend for the period under review.