Tinaye Agere
Michael Tome
SeedCo Limited demonstrated a robust top-line growth in the first half of 2024 with a 73 percent increase in revenue driven by higher seed sales volumes, particularly in maize and wheat.
This reflects strong market demand and the company’s ability to expand its product offerings and export footprint.
However, the company had significant profitability challenges, with profit after tax declining sharply from US$15.97 million in the first half of 2023 to US$1,21 million in the first half of 2024.
This is attributable to increased operating costs, rising inflation and input costs, coupled with higher processing expenses.
“Revenue for the half-year increased by 73 percent to US$18, 9 million, primarily driven by growth in winter cereal sales and exports which contributed to the overall 24 percent volume increase to 10,625 metric tonnes.
“Wheat seed sales went up by nine percent over the previous year despite drought-related water shortages, power outages, and high prices for essential inputs such as fertiliser,” said SeedCo Group Secretary Faithful Sithole in the company’s half-year results to 30 September 2024.
According to SeedCo, borrowings increased by 35 percent to US$29.6 million, resulting in higher finance costs.
However, the company’s liquidity remain healthy, with improved cash balances and inventories, indicating its ability to cover short-term obligations.
SeedCo’s strong revenue growth and market position make it an interesting medium to long-term investment opportunity, especially if cost control improves and regional exports expand.
Looking forward, SeedCo’s strategic focus on regional exports, advanced seed technologies, and adaptive strategies for unpredictable climatic conditions positions it well for recovery.
Online Reporter