malvernmugadzikwa
Nelson Gahadza
One of hybrid seed producers, SeedCo International, says it anticipates interim earnings per share (EPS) for the half-year period to September 30, 2024, to improve by approximately 20 to 40 percent compared to the EPS of negative 1.00 US cents reported for the prior period ended September 30, 2023.
The group in a trading update said the interim EPS is expected to range between negative 0.59 and negative 0.79 US cents.
“The anticipated improvement in EPS is primarily driven by heightened trading activity during the first half, as farmers make advance preparations for the upcoming cropping season following the previous season’s drought in Southern Africa.
“Investors are therefore advised to exercise caution when dealing in the securities of SeedCo International Limited,” reads the trading update.
SeedCo International Limited is primarily listed on the Botswana Stock Exchange (BSE), with a secondary listing on the Victoria Falls Stock Exchange.
The Equity Listings Requirements of the BSE mandate issuers to announce, through the BSE and the press, any variation in their expected Earnings Per Share (“EPS”) exceeding 10 percent compared to the previous corresponding period.
SeedCo International is one of the leading certified seed companies authorised to market seed varieties developed by itself, the government, and other associated seed breeders in its markets.
From years of intensive investment in research and development, the company is involved in the breeding, multiplication and distribution of mainly hybrid seed varieties.
IH Securities, reviewing the group’s financials for the year ended March 31, 2024, said the group is expected to retain its stronghold in its operating markets as it will leverage its wide geographical footprint to introduce new seed varieties across markets in line with their needs.
IH said key downside risks include persistent power outages and logistical delays in moving seed across borders.
“We forecast a 14.8 percent increase in SeedCo. International revenue to US$135.46 million in FY25, up from US$118 million in FY24, on recovery of volumes following the El Nino-induced drought,” IH said.
It said EBITDA is expected to come in at US$21,67 million while the EBITDA margin is expected to remain flat at 16 percent and then inch up going forward as imported inflation decreases following interest rate cuts.
IH said the group anticipates positive business performance in Southern Africa from a rebound in demand to restock grain reserves and mitigate the impact of the El Nino-induced drought.
“There is, however, a risk that flooding may impact the cropping season. Furthermore, a La Nina phenomenon could result in below-normal rainfall in East Africa, posing downside risk to volumes in that region,” reads part of the IH review.
Bongani Ndlovu