SEED Co Limited has expanded its pipeline of climate-smart maize and wheat seed varieties with higher yield potential to help farmers prepare for a forecasted El Niño-affected 2026/27 season after seed sales slumped 40% in its year ended March 31, 2026.
This comes amid international forecasts indicating the likely emergence of an El Niño from mid-2026, which could reduce rainfall during the November 2026 to March 2027 rainy season.
The Seed Co revenue slump was owing to normalising farmer demand after the previous season’s drought-driven buying spree, tighter credit risk management and weaker export demand as regional seed supplies recovered.
The weaker demand pushed revenue down 28% to US$51,5 million, although the decline was partly cushioned by an improved product mix and a lower contribution from relatively lower-margin export sales.
Consequently, profit after tax fell about 54% to US$8 million from a year earlier.
“Research and development remains a key competitive advantage, supported by a strong pipeline of climate-smart products,” Seed Co said in a statement attached to the group’s financial report for the year ended March 31, 2026.
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“The maize seed basket was expanded with the release of two new varieties, while a new high-yielding wheat variety was also launched.”
To sustain investment in climate-smart seed development despite the weaker trading environment, Seed Co increased borrowings by 16% to US$28,3 million to meet working capital requirements as trade receivables rose following the peak selling season.
The company said the additional funding helped support operations while it continued investing in research and processing infrastructure.
The strategy was underpinned by a sharp recovery in cash generation, with operating cash flows rebounding to US$7,8 million from an outflow of US$1,1 million in the prior year.
“Operating cash flow rebounded by US$8,8 million, driven by cash sales growth and quicker collection from local open market as well as export sales,” Seed Co said.
This led to a closing cash and cash equivalents position of US$2,5 million at March 31, 2026, from US$300 000 a year earlier, reflecting the improved cash generation despite weaker trading conditions.
“The operating environment remained challenging during the year, characterised by climate variability, evolving cropping patterns, heightened competition and constrained liquidity.
“Notwithstanding these headwinds, the company leveraged its brand and diversified climate-smart seed solutions, to strengthen farmer outreach and market presence.
“These initiatives partially offset the challenging operating environment and supported resilient performance in the domestic open market.”
Further, the company’s operating expenses declined by 17%, reflecting disciplined cost management and operational efficiency initiatives implemented across the business.
Seed Co said non-current assets were stable as depreciation was countered by strategic investment in research and processing infrastructure.
“Inventory levels reduced by 7% to US$24 million as prior season production was managed lower to align with forecasted lower demand,” the seed manufacturer said.
“Trade and other receivables increased by 10%, reflecting the timing of credit collections after the selling season peak which peaks towards the end of the first half of the financial year.
“Borrowings increased by US$3,9 million to bridge working capital needs aligned with the increase in receivables described above.”
Total assets increased by 7,2% to US$184,3 million during the review period, from the comparative year, supported by higher investments in associates, stronger receivables and improved cash holdings.
“Despite market challenges, climatic variability and global supply chain pressures, the company remains well positioned to deliver sustainable long-term growth through continued innovation, disciplined execution and market-focused strategies.”