SeedCo International posts bumper profits
SEEDCO International Limited (SCIL) has recorded a 26,2 percent spike in revenue to US$88,5 million in the year ended March 2021 compared to US$70,1 million achieved in the prior year.
During the period under review, the leading seed producer recorded a 24,7 percent growth in maize seed sale volume at 38 300 tonnes compared to 30 700 tonnes last year.
Speaking during the company’s virtual analyst briefing yesterday, SeedCo International chief financial officer Mr John Matorofa said the group’s gross profit was US$43,8 million compared to US$34,3 million.
“There was no significant increase on the gross margins, there was just a marginal increase of 0,4 percent to 49,4 percent gross margin.
Other income, there was a big decrease compared with the prior year was US$6 million and this year it was almost US$2 million largely because we didn’t have exchange gains particularly on the US$ assets in Zambia,” he said.
SeedCo International is a holding company involved in the breeding, multiplication, and distribution of hybrid seeds.
The company operates across regional geographical segments such as Zambia and the Democratic Republic of Congo (DRC), Malawi, Zimbabwe, Tanzania, Kenya, Southern Africa Customs Union (SACU), and West Africa.
The SACU segment includes maize seed sales, income from management fees, dividend, and interest from South Africa, Botswana, and Swaziland.
The West Africa segment comprises of maize seed sales from Rwanda, Nigeria, and Ghana.
On the joint venture and associates, Mr Matorofa said SeedCo West Africa, mainly Ghana, the business broke-even.
“On the Prime Seed International . . . revenue increased by almost 32 percent from US$3,9 million last year to US$5 million this year. So, the loss on this vegetable business decreased from almost half-a-million (United States dollars) to US$0,16 million this year,” he said.
Mr Matorofa said finance costs relating to concessions by banks to support the company in the wake of Covid-19 also improved SeedCo International’s cash generation in the second-half of the financial year under review.
“Finance costs reduced from US$2,9 million last year to US$2,5 million this year,” he said.
On the firm’s balance sheet, the main item was the property, plant and equipment, which improved from US$36,5 million to US$39,6 million on the back of additional investment SeedCo International did in Nigeria and also farm production facilities in Zambia.
This is in addition to the revaluations that were done during the financial year under review.
Receivables during the year ended March 31, 2021 improved to US$58 million from US$52 million in the prior year.
“Included in these receivables are related part balances, this year included in the US$58 million is US$17 million in related parties, these are largely SeedCo Limited, which owed US$10 million that was paid off just after year-end.
“The other part balances are for Prime Seed International and also the South African joint venture, otherwise on trade and pure trade receivables, they remained at US$40 million last year . . .”
Seedco International’s borrowings during the year under review declined to US$32 million and this was largely owed by the group’s major bankers in Botswana and South Africa.
Speaking at the same occasion, Seedco International group chief executive officer Mr Morgan Nzwere said despite the Covid-19 pandemic, their business was deemed an essential service in almost all the markets that they operate in.
“From an operation point of view, we did not really encounter any major difficulties. We also had some normal to above-normal rains in most markets and this has shown in the grain that’s coming out of the fields in the major markets, all farmers are very happy with their harvest,” he said. —chron iel. l.z
