Vusumuzi Dube
Judith Phiri, Business Reporter
ZIMBABWE Stock Exchange (ZSE) listed, seed producer, SeedCo Limited recorded an increase in maize and soya bean seed sales volumes for the year ended 31 March 2023, driven by seed demand and government programmes aimed towards ensuring food security.
In a statement accompanying the trading update for the year ended 31 March 2023, the Group secretary, Mr Tineyi Chatiza said the seed sales volumes for maize increased by 12 percent while that of soya bean by 49 percent.
“Maize and soyabean seed sales volumes increased by 12 percent and 49 percent from prior year respectively driven by the heightened seed demand due to improved rainfall received and government programmes aimed towards ensuring food security supplemented by export opportunities across the region,” said Mr Chatiza.
He, however, said winter wheat sales were subdued when compared to prior year, dropping by 7 percent driven mainly by high prices of inputs, unreliable power supply and uncertainty around commodity producer prices.
Mr Chatiza said the revenue growth recorded was on the back of 14 percent increase in sales volumes and selling price adjustments in response to inflation-induced increases in operating costs, as well as the general effects of exchange rate fluctuations.
“Other income increased due to exchange gains on debtors and non-seed sales. Operating expenses rose steeply due to the prevailing hyperinflationary conditions. Finance costs were at 26 percent of turnover with an interest cover ratio of 4.4 caused by the unexpected hikes in interest rates that ranged 80 percent-200 percent per annum,” he added.
“The appetite to borrow was worsened by delayed payments from Government schemes and a sharp increase in prices for both operating expenses and seed deliveries.”
In terms of associate and joint venture operations, Mr Chatiza said these made a negative contribution to the company’s performance due to subdued sales volume growth.
He said Quton sales declined 10 percent and Prime Seed sales were 18 percent below prior year.
Mr Chatiza said the operating economic environment was crowded with a busload of headwinds and increasing uncertainties, while the Global economy was also facing unprecedented challenges.
“Whilst these developments impact fragile economies the most, the unavoidable need to focus on food security places the company in a better position to leverage its strong brand and intellectual property to actively participate in enhancing primary food production to plug supply gaps,” he added.
Online Reporter