Seed Co Limited (Zimbabwe) – HY 2024 Results Presentation

By Published On: December 8th, 2023Categories: Corporate announcement, Earnings
Seed Co Limited 2024 Presentation Results For The Half Year

Seed Co Limited ( HY2024 Presentation

General environment

  • Zimbabwe’s economic crisis went on unabated, compounded by:
    • Post-election political and continued policy uncertainty weighing on economy
    • Mixed signals around dollarisation despite the 2030 Gvt declared multi-currency use timeframe
    • Widening of gap between the official and alternative currency markets
    • Compulsory 25% export surrender across the board
    • Recommendation to remove 10% FX trading margin cap might help multi-currency pricing
  • Unfavourable weather outlook (drought) further compounding Zimbabwe and regional economic headwinds
  • Globally, the continuation of the Russo-Ukraine war and outbreak of Israel-Palestine war compounding global challenges (logistics, inflation & soaring interest rates)
  • In the region, economic headwinds being experienced characterized by power shortages, inflation and depreciating currencies with limited global donor support
  • Government programs continuing in most markets though under budgetary constraints


  • Satisfactory product pipeline renewal to address the ever changing climate and farmer needs
  • New varietal registrations in Zimbabwe
    • Soyabean: – Two new releases (SC SZ06 & SC SZ08)
    • Beans: – Three new releases (SC PV 04, SC PV 06, & SC PV O8)
    • Sunflower – Two hybrids: LG 50745 & SC HAH02 and one Open-Pollinated Variety (SC HA01)
  • Regional maize varietal registrations:
    • Kenya: SC739 & SC805- Highlands adaptable hybrids
    • Zambia: SC669 & SC 671- Cob rot tolerant 600 series hybrids
    • South Africa: SC710, SC657 & SC653 came top in silage trial evaluations
    • Nigeria: 5 hybrids undergoing on farm evaluation including SC417
  • Significant progress made towards developing fall armyworm tolerant breeding


  • FY22/23 production exceeded targets due to significant yield and quality gains achieved.
  • Total maize seed stocks available in Zimbabwe for sale this year stood at 31,600MT that is 40% higher than PYr
  • Total maize seed stocks for sale in the region this year stood at 58,850MT that is 14% higher than PYr
  • Available maize seed stocks more than adequate to satisfy anticipated demand this year across markets with intercompany exports
  • Whilst overall stocks are adequate some varieties like SC719 have already stocked-out as they are highly in demand


  • The newly commissioned Zim drier handled its design capacity 5,000MT this year.
  • Processing plants working very well but power outages are a challenge in Zimbabwe, Zambia, Malawi, and Tanzania
  • Back-up power investments are being made but these are however costly to run compared to the grid
  • Broke ground to build a new factory in Tanzania to address the needs of this growing market
  • Work in progress to increase maize seed drying capacity and storage capacity in Zambia


  • The Zimbabwean operating environment remains highly uncertain
  • Recent national budget taxation proposals are causing anxiety, and we await the passing of the Finance Bill
  • The country is facing a drought induced by the El-Nino and this is dampening farming activities
  • Small-scale farmers will still however attempt to plant, and we have seen increased open market demand despite the challenges of weather and the economy
  • We have an optimal varietal mix suitable for both drought and good rainfall
  • To preserve shareholder value in a highly uncertain environment we are:
    • increase exports and harnessing USD sales from the open market
    • containing overheads in line with the obtaining level of business
    • liquidating costly borrowings from cash collections


  • A mixed selling season is being anticipated benefiting from:
    • the Group’s diversified geographical footprint; and
    • a diverse climate-smart product portfolio.
  • Potential downside from unfavourable rains in Southern Africa though sales to date are not showing signs of being adversely impacted by the bad weather
  • Attractive commodity prices in the region motivating farmers to stock seed regardless of weather forecasts in Malawi and Zambia
  • YTD sales are well ahead of same period PYr and expectations despite the El-Nino
  • Tanzania solid performance growth trajectory continuing riding on growing demand driven by good rains and the fertiliser subsidy
  • Kenya is on the rebound buoyed by good rains and fertiliser subsidy
  • Nigeria is however expected to perform below expectation due to low disposable incomes and absence of Gvt agricultural inputs support
  • Business unit balance sheets successfully restructured:
    • to mitigate exchange losses by refinancing USD liabilities with local currency borrowings
    • increased finance costs from local currency borrowings expected to be significantly lower than potential exchange losses without the refinancing
  • Key risks being monitored and managed going forward:
    • Inflation in most regional markets due to imported global inflation
    • Currency devaluation pressures in most regional markets
    • Mixed rainfall outturn El-Nino phenomenon

The contents of the post above were obtained from third parties, which We, AfricanFinancials, believe to be reliable. However, We do not guarantee their accuracy and the above information may be in condensed form. The reader is encouraged to refer to the original source of the information, which, in most cases, is in PDF format and on the originating company's letterhead. While We endeavour to replicate the original content accurately, We cannot guarantee the absence of errors in the above article and We disclaim any liability regarding reliance on information provided in this article.