Overview

The past season was mixed, marked by good rainfall in Eastern and Central Africa which drove seed demand, while in Southern Africa the region experienced below average rainfall resulting in subdued performance. Overall, the Group experienced a rebound in product demand following devastating drought experienced in all markets last year.

Depreciating currencies dampened the revenue growth despite impressive volumes performance in both East Africa and Central Africa.

Income Statement

Revenue
A combination of normal to above normal rainfall in Tanzania, Malawi and some parts of Zambia together with improved maize commodity prices drove product demand resulting in maize seed sales volumes growing by 37%. Revenue however only increased by 19% due to sharp depreciation of the Zambian Kwacha against the reporting currency.

Net operating expenses
Net operating expenses decreased by a marginal 1% due to the reduction in credit losses and the positive impact of local currencies’ depreciation on translation to the Group’s US$ presentation currency.

Finance costs Delayed settlement of receivables from major Government customers kept our facilities at higher levels resulting in increased finance costs.

Joint Venture Operations
Unfavorable currency movements especially towards the end of the financial year adversely affected the vegetable business in Zambia and South Africa with exchange losses negating the positive trading results that had been achieved.

Profit for the year
The 62% increase in Group profit for the year was driven by strong product demand in all markets.

Statement of Financial Position

Property, plant and equipment
The increase in non-current assets was due to the acquisition and capitalization of the seed production farms in Zambia, and capitalization of right of use of assets as well as breeding rights.

Inventories and biological assets
A combination of excessive rains in Kenya in the first season and COVID-19 movement restrictions in the second season towards the end of the financial year stalled the sales volumes in this market and this resulted in increased inventories at year end.

Trade and other receivables
A combination of increased revenue growth and slow movement in the regional Government debts increased the receivables at year end. Efforts to get these paid are continuing.

Amounts due from related parties – mainly from Zimbabwe – declined by 25% compared to prior year and initiatives to have these balances settled are ongoing.

Equity
The decrease in equity is due to net exchange differences on translation of foreign operations whose currencies weakened against the reporting currency.

Net debt
The net debt increased due to higher seed production volumes as well as capital expenditure.

Seed supply

Despite the challenges posed by COVID-19 restrictions, the Group is adequately stocked to meet anticipated demand in the ensuing season. Fortunately in all markets, Agriculture has been designated as an essential and critical area and operations have been allowed to continue with limited interruptions.

Research & development

The first proprietary highland maize variety and 2 Maize Lethal Necrosis Disease (MLND) resistant varieties were released in Kenya.

Four new maize products and 3 soyabean varieties were released in Uganda to spearhead market penetration in the Great Lakes region.

The Group continues to improve training of its agro-scientists and