SeedCo International posts exceptional profits

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The Chronicle

Oliver Kazunga, Senior Business Journalist
SEEDCO International Limited (SCIL) reported a 26.2% increase in revenue to US $ 88.5 million in the fiscal year ended March 2021, from US $ 70.1 million in last year.

During the period under review, the largest seed producer recorded a 24.7 percent growth in maize seed sales volume to 38,300 tonnes from 30,700 tonnes last year.

Speaking at the company’s virtual analyst briefing yesterday, SeedCo International chief financial officer John Matorofa said the group’s gross profit was $ 43.8 million compared to $ 34.3 million.

“There was no significant increase in gross margins, there was only a marginal increase of 0.4% to 49.4% gross margin.

Other income, there was a sharp drop from the previous year, was US $ 6 million and this year it was almost US $ 2 million largely because we did not have no foreign exchange gains especially on US dollar assets in Zambia, ”he said.

SeedCo International is a holding company involved in the breeding, multiplication and distribution of hybrid seeds.

The company operates in regional geographic segments such as Zambia and the Democratic Republic of the Congo (DRC), Malawi, Zimbabwe, Tanzania, Kenya, the Southern African Customs Union (SACU) and South Africa. the west.

The SACU segment includes corn seed sales, management fee income, dividends and interest from South Africa, Botswana and Swaziland.

The West Africa segment includes sales of maize seeds from Rwanda, Nigeria and Ghana.

Regarding the joint venture and associates, Mr. Matorofa said SeedCo West Africa, mainly Ghana, has reached the breakeven point.

“On Prime Seed International. . . revenue increased nearly 32%, from $ 3.9 million last year to $ 5 million this year. So the loss on this vegetable trade has gone from almost half a million (US dollars) to 0.16 million dollars this year, ”he said.

Mr Matorofa said the financial costs of concessions from banks to support the business in the aftermath of Covid-19 also improved SeedCo International’s cash generation in the second half of the year under review.

“Financial costs have gone from $ 2.9 million last year to $ 2.5 million this year,” he said.

On the company’s balance sheet, the main item was property, plant and equipment, which increased from US $ 36.5 million to US $ 39.6 million thanks to additional investments made by SeedCo International in Nigeria and also production facilities. agriculture in Zambia.

This is in addition to the re-evaluations which were carried out during the year under review.
Accounts receivable for the year ended March 31, 2021 improved to US $ 58 million from US $ 52 million the previous year.

“Related party balances are included in these receivables. This year, the US $ 58 million represents US $ 17 million of related parties.

“The other partial balances are for Prime Seed International and the South African joint venture, if not on pure trade and trade receivables they stayed at $ 40 million last year. . . “

Seedco International’s borrowings during the year under review fell to US $ 32 million, largely owed by the group’s main bankers in Botswana and South Africa.

Speaking on the same occasion, Mr Morgan Nzwere, CEO of Seedco International Group, said that despite the Covid-19 pandemic, their business was seen as an essential service in almost all of the markets in which they operate.

“From an operational point of view, we haven’t really encountered any major difficulties. We also had normal to above normal rains in most markets and this was seen in the grain coming out of the fields in the main markets, all the farmers are very satisfied with their harvest ”, he added. he declares. – @okazunga.

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