Zimbabwe Stock Exchange-listed industrial concern Seed Co after tax loss for the half year to September was up 44% to $12,8 million compared to the same comparative period last year dragged by operating costs, the company has said.
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Revenue rose to $17 million during the period under review from $13 million while operating costs accelerated to $16 million from $13 million.
“Overheads at $16,6 million were 29% higher than the prior year due to a $3 million impairment of deposit receivable from one of the financial institutions currently under curatorship and an increase in the general provision for bad debts by another $1 million to take account of slow moving retail debtors from previous years”, the company said.
Finance costs, the company said, were higher than the prior year due to delayed receipts from government and quasi-government institutions that have been slower on their payments resulting in working capital constraints.
The group’s current ratio, which measures the company’s ability to meet current liabilities, stood at 1,4, a figure above the minimum efficiency of one. “Current assets at $119 million were 3% higher than prior year end figure in spite of 31% reduction in accounts receivable to $44 million.
A total of $8 million was received from the Governments of Zambia and Zimbabwe just after cut off. Efforts are still being made to obtain payment from related government institutions in Zimbabwe that still yet to honour their obligations.” This, according to the company, resulted in borrowings increasing by 51% $70,8 million.
Despite taking a knock, the group announced that performance was expected to improve in the second half of the year buoyed by improved support for agriculture and continued growth in East Africa with further gains in market share in Tanzania and entry into the highland variety in Kenya.
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Continuation of the subsidy programme in Malawi and improved product pricing on the market, the company said, was also expected to drive growth. Seed Co’s total assets turnover, a measure of how much assets were being used to generate sales stood at 0,10. The efficiency was below 1 showing under-utilisation of assets which might be a management issue or pricing policy in light of stiff competition.
