Seed Co International Limited

Seed Co International (SCIL.bw) – Abridged Group Audited results FYE 31 March 2022

By Published On: July 1st, 2022Categories: Corporate announcement, Earnings
Seed Co International Limited 2022 Abridged Results

Seed Co International Limited (SCIL.bw) 2022 Abridged Report

Overview

The financial year under review was marked by the adverse effects of climate change (late and erratic rains with incidences of drought and flooding) that was at variance with normal-to-above normal rainfall forecasts. The Covid-19 pandemic, soaring fertiliser prices and currency fluctuations added to make the financial year more challenging. Resultantly, the Group’s performance was negatively impacted.

Financial performance

Revenue was flat, albeit on reduced sales volume, helped mainly by the strengthening of the Zambian kwacha against the USD and business growth in Mozambique. Volume uptake was impacted by bad weather and reduced government subsidy support in Malawi.

Gross margin was subdued on account of reduced economies of scale and the impact of a stronger Zambian kwacha on cost of sales. Other income improved driven by debt recoveries and exchange gains. Overheads went up linked to the marketing and selling efforts in anticipation of a normal season that regrettably turned out adverse.

The Group’s cash generation remained positive but at a lower level compared to prior year. Borrowings and finance costs increased from CAPEX and working capital growth.

Associate and joint venture’s negative contribution halved as their mainly start up operations begin to narrow losses.

The Group’s net profit reduced markedly because of above mentioned volume decline and pressure on margins.

Financial position

Non-current assets increased due to new CAPEX focused on enhancing seed production as well as capitalisation of the vegetable seeds joint venture.

Receivables declined mainly due to collections from related parties and long outstanding government debts. Related party indebtedness reduced significantly from a net receivable position of $11.1m to a net payable position of just $0.5m in FY22. The Group’s net debt-to-equity ratio improved from positive cash generation.

Outlook

Global supply shocks and imported inflation expected to impact the cost of doing business and compound the effects of climate change in Africa. Regional food security will however remain top of the agenda to mitigate global supply shocks, and the Group will step up its operations to satisfy the anticipated increase in the demand for seed in regional markets.

By Order of the Board

E. M. Kalaote
Company Secretary
29 June 2022

Seed Co International Limited (SCIL.bw)

Share price: 270.00 Thebe (0.00 | 0.00% – 10/08/22)