HomeNewsSeedCo trims first half loss, lifts group turnover

SeedCo trims first half loss, lifts group turnover

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Zimbabwe’s largest seed breeder SeedCo Limited says maize seed production has increased 83% this year, lifting first-half group turnover 58% up from the comparable period 12 months and significantly trimming the loss margin traditionally associated with the period.

In a statement for the six months to September 30, Seedco reported that the loss for the period fell to $1,4 million from $1,8 million last year.

The period is characterised by cost accumulation and limited pre-summer season sales, as these normally boom in the second half of the year.

The major cost drivers include grower deliveries and activities to support seed intake.

Group turnover increased 58% to $20 million from $12,9 million in the comparable period last year, driven by the local operation, as seed consumption in Zimbabwe improved because of the rebound in agriculture following improvements in the operating environment.

“Maize seed sales in the first half of the year were 58% ahead of prior year on the back of early seed intake from growers coupled with demand in the markets that require winter plantings, SeedCo company secretary John Matorofa said.

“The limiting factor was lack of carryover stocks from prior year which meant we could not adequately supply all markets. Winter cereal volumes were 68% better than prior year due to the seasonal nature of the business.”

Total assets for the group stood at $53,6 million.

Operating expenses for the group were at $650 174 from $58 850 the prior year.

The group’s property, plant and equipment increased 8% due to the construction of new research and factory facilities in Zambia and Tanzania and the refurbishment and replacement of equipment in Zimbabwe.

Total borrowings for the group stood at $24 million from $3,6 million last year.

The group said inventories increased by 172% this year due to the increase in seed intake, resulting in 34 000 tonnes of maize stock, with Zimbabwe contributing more than other countries.

In its review of regional operations, SeedCo said it expected the Tanzanian unit contribute profits in the short term, while Zambia’s performance should boom with the centralisation of seed processing and storage facilities, both of which increase efficiency.

“In Malawi, the group has allocated more resources in an effort to increase production to meet demand for our seed,” said Matorofa.

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