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Aico posts half-year loss

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AGRO-INDUSTRIAL concern Aico Africa Limited’s after-tax loss for the half-year to September remained flat at $27,1 million compared to the same period last year due to improved performance in some of its operations, a company official has said.

Victoria Mtomba,Business Reporter

Aico chief executive officer Patrick Devenish told NewsDay that the company’s performance for the first half of the year was weighed down by subdued agriculture.

“Seed Co performed well and Olivine performance has improved although it’s still loss-making. The issue is basically about timing,” he said.

The seed producing company posted a 6% decline in revenue to $51 million from $54 million due to a slump in sales volume to 36 094 tonnes. Operating loss for the group stood at $17,1 million, 6% lower than last year.

Aico said liquidity constraints continued to hamper economic activity and also the increases in non-performing loans showed the operational challenges in commerce and industry.

“Similarly, the economy is showing signs of stagnation, punctuated by looming company closures and high unemployment both of which are dampening the country’s economic outlook,” the company said.

In a statement accompanying the financials, Aico said the conclusion of the restructuring and fundraising project would unbundle the group to improve operating efficiencies.

“With the fundraising project earmarked predominantly for Cotton Company of Zimbabwe Limited, we anticipate recovery and a rebounding of business going forward,” the company said.

Aico said although Seed Co was expected to continue growing in the outlook period, Olivine still needed to be recapitalised.

The company said seed cotton intake fell to 34 500 tonnes during the period driven by a very low national crop size.

While the market share for cotton fell to 24% from 42% last year, maize seed sales increased by 17% and winter cereal sales went up by 34% over last year.

“Performance in the FMCG (fast-moving consumer goods) business continues to be restricted by working capital constraints. There is, however, notable improvement in operating efficiencies and everything being equal, we expect this business to show improved full year performance over last year. Sales volumes for the first half were 57% higher than last year,” the group reported in a statement.

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