SeedCo records $15m profit

HARARE – Zimbabwe Stock Exchange-listed agriculture concern, SeedCo Limited (SeedCo), registered a 27 percent increase in profits to $15 million in the full year to March 2015 from $11 million in the prior period.

Morgan Nzwere, SeedCo group chief executive told analysts on Thursday that the company’s basic earnings per share rose by 17 percent to 6,92 cents and declared a dividend of one cent in the period under review.

“Profit after tax form continuing operations increased by 19 percent to $14,0 million. Non-current assets also went up by 81 percent due to the inclusion of treasury bills worth $23,7 million issued by government,” Nzwere said.

He added that the seed producer had acquired the country’s biggest vegetable grower, Prime Seeds, in the year under review.

“Through the disposal of Quton and with help from Limagrain, we now own Prime Seeds, it is not a very big acquisition but there is quite an opportunity as Prime Seeds is a $6 million turnover business,” he said, adding that SeedCo was going to buy Prime Seed’s assets and liabilities.

Nzwere also said the venture was expected to expand into the region to SeedCo’s regional subsidiaries in Botswana, Nigeria, Tanzania and Malawi.

During the period, SeedCo also managed to secure a structured deal with government for the supply of seeds on a cash upfront basis, were SeedCo sold 16 000 tonnes of seed.
“This is a deal we are working on so that this happens this year as well; however, all I can say is that one of the banks is the Afreximbank obviously,” Nzwere said.

The disposal of a 60 percent stake in the group’s cotton unit, Quton, to Limagrain went through in the period under review.

Quton also recorded a loss for the year, but the loss was offset with the profit disposal of the 60 percent stake at $2,6 million.

Meanwhile, the group’s revenue for the period stood at $ 94,6 million down from $106,5 million recorded prior period, while gross profit was $ 43,5 million.

Turnover reduced by 11 percent to $95 million from $106 million recorded prior attributed to a shift in consumer demand to short term season varieties.

Nzwere said operating costs also slumped 11 percent to $31,2 million for the period under review.

Finance charges reduced by 56 percent from debt collection and the injection of Limagrain, the seed producer’s technical partner.

The government has agreed to consolidate the $27 million debt owed to SeedCo by its various departments for seed supplied under agricultural input schemes since 2007.

SeedCo is owed about $14 million for the current 2013-2014 season while the other $13 million was accrued from the previous farming seasons through quasi government arms.

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