SEED CO posted a $69,03 million profit after tax for the half-year ended September 30, 2018 following a fair valuation of its subsidiary, Seed Co International Limited.
BY TATIRA ZWINOIRA
The fair valuation was undertaken as Seed Co sought to partially unbundle 71% of its shares in the subsidiary by way of a pro rata dividend-in-specie distribution to unlock shareholder value from its continental operations.
Excluding the fair valuation, Seed Co posted a profit of $5,94 million for the period under review, from a loss of $2 million last year.
“The group achieved a profit after tax of $5,9 million largely due to the timing of maize seed sales which were earlier than normal,” Seed Co Limited secretary John Matorofa, in a statement accompanying its results released yesterday, said.
“This mainly arose from fair valuation of Seed Co International prior to its partial disposal to the shareholders of the group.”
In July 2018, Seed Co Limited announced the partial unbundling of Seed Co International Limited pending shareholder approval.
At the time, Seed Co Limited said: “The partial unbundling will be achieved through the dividend-in-specie distribution to all shareholders of 241 313 440 Seed Co International ordinary shares, on the basis of 1 (one) Seed Co international share each Seed Co Limited share held and duly registered as such on the distribution record date”.
Following the unbundling, there would be a private placement of “37 920 648 new Seed Co International ordinary shares, representing 10% of Seed Co International issued share capital post-unbundling and the private placement, with Vilmorin & Cie (a French seed producer) at a cash subscription price of US$0.5069 per share to raise US$19,2 million hard currency equity capital”.
Pursuant to the proposed partial unbundling and private placement, Seed Co Limited would then seek a primary listing of Seed Co International on the Botswana Stock Exchange and a secondary listing on the Zimbabwe Stock Exchange.
After the proposed partial unbundling and private placement, Seed Co Limited is expected to retain 26% shareholding in Seed Co International, followed by Vilmorin & Cie with 18,78%.
Seed Co Limited’s basic earnings per share for the 2018 half year were at 28,54 cents from a comparative 2017 loss of 0,83 cents.
Revenues grew by 81,76% for the period under review, excluding the fair valuation of Seed Co International, to $29 million from a 2017 comparative of $15,95 million.
“Despite the decline in wheat seed sales volumes, turnover increased by 82% to $29 million due top early maize seed sales on public agricultural support programmes. These sales were invoiced at the same price as last year,” Matorofa said.
Operating expenses for the period were contained to the similar levels last year, while the company realised financial income from interest held on Treasury Bills.
Seed Co International narrowed its loss for the period under review thanks to a depreciation of the Zambian kwacha against the greenback.