BY TAFADZWA MHLANGA
seed manufacturer, Seed Co International Limited says it will focus on breeding more drought-tolerant seeds to mitigate against risks of global warming and unpredictable rainfall patterns.
The group’s loss widened to US$2,5m from US$1,5m recorded during the same period last year due to the decrease in exchange gains and increased finance costs.
Zimbabwe suffered its worst drought in 30 years in the past year.
“The changing weather patterns have a potentially significant impact on the group’s future financial performance. With the emerging risks of global warming and erratic rainfall, the group’s research and development is increasingly focusing on breeding more drought-tolerant varieties,” Seedco company secretary Eric Kalaote said.
According to the 23rd Southern African Regional Climate Forum, Zimbabwe received normal rainfall over the three-month period from October to December and is expected to get normal to low rainfall between January and March 2020.
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FEWSNET, the US Agency for International Development focused on food security, reported that record-high temperatures in late-October to early-November impacted water sources, agricultural activity, and livestock.
As of late-November, widespread rainfall across most areas had led to enough soil moisture for planting.
However, despite November rainfall, land preparation and planting activities were at markedly low levels mainly due to limited availability of agriculture inputs, specifically seeds and fertilizers.
Kalaote said for the half-year ended September 30, 2019, revenue from maize seed volume sales remained unchanged at US$17,7m owing to late arrival of rainfall which led to the delay in planting in the region.
Financial costs, that impacted on profits, increased from US$948 030 to US$1,6m in the period under review due to increased borrowings which amounted to US$46,8m with working capital tied up in receivables and inventories.
The group’s cash and cash equivalents reduced to US$13m after payments for seed production, capital expenditure and dividends to shareholders.
Capital expenditure increased by 31% from US$2,8m to US$3,7m during the period under review.
Non-core income declined to US$1,3m on account of reduced exchange gains on foreign-currency denominated receivables in Zambia as the Kwacha rate of depreciation decelerated.
Fixed assets increased to US$39,2m owing to the purchase of a farm for seed in Zambia.
The group recently acquired 80% stake in a South Africa-based vegetable seed company, Alliance Seed that is expected to boost its foreign currency position.
Seed Co has operations in Rwanda, Botswana, Ghana, Kenya, Malawi, South Africa, Tanzania, Zambia and Zimbabwe.