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Judith Phiri, Business Reporter
SEED manufacturer, SeedCo Limited has said it is expecting to experience volume growth as well as a notable increase in hard currency revenue at the back of significant exports.
In a trading update for the third quarter ended 31 December 2022, the company said the volume growth will be recorded from encouraging export growth, among others.
“In Zimbabwe the business is expected to experience volume growth as well as a notable increase in the contribution of hard currency revenue from encouraging export growth and a significant increase in domestic sales in United States dollar (USD). On a regional level, a mixed volume performance is predicted, with growth forecast in some regions of Southern Africa and East Africa and a drop due to drought in other regions of East Africa,” said SeedCo.
However, it said inflation, foreign exchange, and interest rate risks remain significant in Zimbabwe and throughout Africa as the group nears the end of its fiscal year.
“The Board and management are still dedicated to protecting and enhancing stakeholder value along the entire value chain of the Group in Zimbabwe and in the region.”
The company said for the period under review, value was maintained in real terms during the business’s peak period of revenue generation because of the stability of the exchange rate and the increase in hard currency sales in Zimbabwe.
It said volume increased by 14 percent over the past nine months compared to the same period prior year and by 46 percent compared to the same quarter prior year, helped by ample stocks, exports, record local sales of wheat and soybeans as well as favourable rainfall projections towards the start of the main planting season.
In terms of financial performance, SeedCo said: “In line with volume growth and the evolution of the ZWL/USD exchange rates, revenue increased by 425 percent during the nine months compared to same period prior year and by 516 percent during the quarter compared to same quarter prior year in historical cost terms.”
The company said when adjusted for inflation, revenue increased by 12 percent compared to the same nine months period prior year, and by 14 percent compared to the same quarter prior year reflecting the volume rise.
SeedCo said some of the major challenges the business in Zimbabwe was dealing with include the ongoing energy crisis, the lack of and high cost of fertilisers and agrochemicals, the loss in consumer purchasing power and the shortage of liquidity in both local and hard currency.
Meanwhile, SeedCo Limited Board recently approved the company’s listing migration from the Zimbabwe Stock Exchange (ZSE) to the Victoria Falls Stock Exchange (VFEX). SeedCo Limited will follow its spin-off, SeedCo International which migrated to the VFEX in 2020 becoming the first counter on the US-denominated bourse.
The company advised stakeholders to exercise caution when dealing in the company’s securities.
Online Reporter