Seed Co Limited (Zimbabwe) – FY22 Abridged Group Audited Results Presentation

By Published On: July 20th, 2022Categories: Corporate announcement, Earnings
Seed Co Limited 2022 Presentation

Seed Co Limited ( 2022 Presentation

Income Statement: Inflation Adjusted

  • ZWL0.6BN Inflation adjusted PBT a significant reduction from Prior year’s ZWL1.9BN, despite a significant monetary loss decline from ZWL3.3BN to ZWL1BN,
  • PBT reduced due to:
    • 8% revenue drop as volume declined by 20% -late rains & pricing confusion in the market
    • margin shrinkage from 64% down to 33% in a distorted market with de facto price controls
    • 15% increase in Opex due to both local [FX] & global pressures [Oil]
  • Finance costs went up 10% due increased interest rates and growth in working capital funding needs
  • Associates & JV contribution was lower mainly because the continental associate, Seed Co International, posted 35% reduced USD profit from US$11.1M to US$7.1M in FY22

Gross margin

Notable margin loss a manifest of:

  • marked increase in the cost of production
  • no relatively lower cost produced stock was carried over from FY21
  • pricing conundrum from the huge disparity between official and alternative market exchange rates – selling prices somewhat controlled at official rates while growers and suppliers of other inputs demanded viable prices

Other income – increased due to: –

  • Increased profit from chemicals & fertiliser (inputs) sales
  • Exchange gains from foreign denominated receivables

Operating expenses

  • The 15% jump, despite revenue coming down 8%, due to cost of living catch up adjustments labour costs and inflation-forward pricing by suppliers chasing the alternative market exchange rates


  • Global supply shocks from Covid and now the Ukraine war causing shortages and inflation that is compounding the woes of already fragile African economies.
    • Zimbabwe’s economic situation is not expected to improve soon in view of upcoming elections next year.
    • the gap between the official and alternative exchange rates in Zimbabwe set to continue weighing down real profitability as it is not easy to de-link selling prices from official rates given the sensitivities around stapple seeds in the country.
    • further currency headwinds expected in Malawi following the recent 25% devaluation
    • uncertainty hovering in Kenya (August 2022) and Nigeria (Feb/March 2023) ahead of elections
    • Zambia is however showing signs of recovery based on political confidence and ongoing discussions with international community to work out a debt rescue package
    • Tanzania continuing to show signs of stability
    • continuation of development partner activities in Mozambique to help mitigate national budgetary constraints
  • Zimbabwe and continental food security will however remain top of the agenda to mitigate global supply shocks as African governments activate import substitution local production strategies.
  • The Group is better positioned to leverage the strong brand and intellectual property to actively contribute to primary food production to plug supply gaps.

Seed Co Limited (

Share price: 8,996.16 ZWL cents (-30.16 | -0.33% – 16/08/22)