SeedCo revenue increases to $18,8m

HARARE - Zimbabwe Stock Exchange-listed agricultural concern SeedCo Limited (SeedCo) revenue increased by 17 percent to $18,8 million in the six months to September 2015 driven by a slight recovery in winter cereals and early maize sales.

The group’s chief executive, Morgan Nzwere, said his company was looking forward to a year of steady growth underpinned by quicker product release due to the strategic technical equity partnership with Limagrain.

“Positive prospects in the medium to long-term are expected to come from the acquisition of Zimbabwe’s leading vegetable seed distribution company and leveraging on the expertise of Limagrain in the new line of business in all our markets,” he told analysts last Thursday.

Nzwere noted that Africa’s largest seed company was also banking on increasing demand of its ultra-early maize seed varieties — particularly SC 301 and SC 303 — which mature faster than all of SeedCo’s maize varieties.

“We are also looking at increasing our market share in East Africa with Kenya, Tanzania and Democratic Republic of Congo all continuing on an impressive growth projectile,” he said.

This comes after the current year has presented major challenges for the group mainly coming from the weakening of currencies as well as erratic rainfall in SeedCo’s major markets.

Nzwere said government input programmes in Zimbabwe, Zambia and Malawi were reduced significantly in the period under review and the seed manufacturing company was now directing its efforts towards the open market, which is however, struggling from the severe effects of the regional economic crisis.

In the half year to September, SeedCo’s margins were lower mainly due to the higher insurance and depreciation charges on revalued assets in Zambia and in Malawi on completion of the new office block, warehouse and factory.

“Operating costs were up due to the coming on stream of Prime Seeds.

“There were also increased payroll costs in research and
development as additional experts were hired to boost our capabilities in Maize Lethal Necrosis Disease research as well as doubled haploid work in our new laboratory,” he said.

In the period under review, the group’s finance charges reduced by 44 percent from $2 million last year to $1,126 million this year benefitting from aggressive debt collection and access to more cost effective bank facilities in most markets as well as the strengthened balance sheet with new capital injected in prior year.

Nzwere said the group’s loss after tax for the period at
$5,6 million was 27 percent than prior year due to a combination of increased volumes, reduced finance charges and positive impact of exchange gains as a result of currency movements.

However, despite the depressing figures, SeedCo remains upbeat on the future as the group “is on course to secure adequate levels of seed production for the selling season which occurs in the second half of the year”.

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