SeedCo revenue up 45pc

HARARE - Africa's largest seed producer, SeedCo, said its revenues went up by 45 percent to $36 million in the half year to September 2017 compared to $24,8 million in the same period last year due to early maize seed sales and improved winter cereal seed sales.

SeedCo chief executive Morgan Nzwere told analysts on Thursday that gross margins rose by nine percentage points to 49 percent attributable to the increased maize seed sales volumes.

“Loss for the period reduced by 78 percent to $2 million from a loss of $9,3 million in 2016 due to a combination of increased sales during the period, improved margins, reduced finance costs and increased profits from the cotton business,” he said.

SeedCo’s finance costs in the half year reduced by 40 percent due to the strong cash position at the beginning of the year. Nzwere noted that anticipated demand in the current season leading to stock outs in some markets, although this will be mitigated by moving inventories between subsidiary companies to ensure that the right seed is available in the appropriate market.

“Plans are underway to increase production this season from 43 000 metric tonnes (mt) last season to 62 000 mt due to stock-outs,” he said.

He further indicated that all seed processing plants in good working condition across the group, while seed drying and processing facilities in the Kenya Highlands are now complete. The SeedCo boss said the seed producer expects a stable set of earnings in the 2018 full year due to the continued market share growth in key markets, particularly East Africa as adoption of the company’s hybrids in that region is on the rise.

“We also expect earnings to increase as a result of the continuing input programmes in Zambia, Zimbabwe and Malawi. The bumper maize harvests recorded in Zambia and Malawi have led to a subdued commodity price for grain, and it’s not yet clear what the overall impact on the demand of seed will be in these markets, but we expect demand to remain steady,” Nzwere added.