Read the Seed Co International Limited 2019 Full Year Report
We have extracted the financial summary from the 2019 Full year Report of Seed Co International Limited , listed on the Botswana Stock Exchange and the Zimbabwe Stock Exchange. under the share code SCIL. Seed Co International Limited is one of the leading certified seed companies authorized to market seed varieties developed by itself, government and other associated seed breeders in its markets. From years of intensive investment in R&D, the Company is involved in the breeding, multiplication and distribution of mainly hybrid seed varieties for the following crops.
The Group successfully listed on the Botswana Stock Exchange in October 2018 as the first and only agro-counter so far.
Performance during the period under review was adversely affected by the subdued demand in East Africa due to the severe drought experienced there. In addition, the adoption of IFRS 9 resulted in a $1.7m impairment charge on the income statement.
Development of the vegetable business is ongoing’ with the finalization of the acquisition of Alliance Seeds in South Africa subsequent to e financial year end date.
Turnover decreased to $60.1m mainly due to the drought—induced suppressed demand in Tanzania and Kenya. The entire second season was lost as the rains only came after the reporting date.
Other income surged on account of exchange gains on foreign denominated assets in Zambia as the Kwacha depreciated.
In spite of increases in LIBOR, finance costs were contained through prudent treasury management.
PROFIT FOR THE YEAR
The Group’s profit for the year was down resulting from:
- drop in revenue due to drought in East Africa; and
- IFRS 9 doubtful debts provision.
Overheads were kept under control despite the credit losses resulting from the IFRS 9 adoption
RESEARCH & DEVELOPMENT
4 new maize seed hybrids for the South African market were approved for internal release.
The breeding pipeline for the Maize Lethal Necrosis Disease (MLND) is now in shape and testing of the hybrids in adaptation trials in territories outside the MLND endemic area of East Africa is being done. MLND tolerant and highland varieties were licensed in Kenya.
Collaboration with global research partners HM Clause has facilitated the sourcing of starter germplasm for commencement of breeding work on vegetables
Chokwe research station in Mozambique for breeding of lowland varieties is now operational.
The Group expects earnings to rebound due to:
- increase in anticipated demand due to expected grain shortages caused by drought in East Africa and floods in Malawi and Mozambique;
- adequate stocks on site in all major markets; and
- contribution from Alliance Seeds.