SeedCo H1 loss grows 66pct to $9,3mln

SeedCo H1 loss grows 66pct to $9,3mln

HARARE, November 28 (The Source) – Zimbabwe’s seed producer SeedCo’s loss widened by 66 percent to $9,3 million from $5,6 million due to inventory write-offs and exchange losses in the six months to September 30.

Revenue rose by a third to $24,8 million, driven by maize and vegetable seed sales.

Chief executive Morgan Nzwere told an analyst briefing that SeedCo had written off assets worth $1,3 million, mostly seed and chemicals.

“What we decided to do this year was to do all significant writeoffs at half year stage. We wrote off about a 1,000 tonnes of seed, which was old. We also disposed off some old chemicals that were part of the biggest stocks that we got when we bought prime seeds. Those write offs totalled about $1,3 million and they ended up affecting margins,” said Nzwere.

Finance costs nearly doubled to $2,141 million from $1,126 million in the prior year. Trade receivables dropped by 17 percent to $38 million  from $46 million reported last year. Included in the trade receivables is the $3 million due from Zambia government — which was paid last week — and $1,3 million due from Malawi. Tanzania and Rwanda owe the group a totall of $7 million.

The Zimbabwean unit has a foreign debt of over $5 million.

Maize seed volumes went up 26 percent while winter cereals seed decreased by 25 percent due to water and power shortages.

Nzwere said the company will meet the market demand for the 2016/17 farming season and  had distributed 6,000 metric tonnes under the Zimbabwe government’s input programme.

The group’s cash and cash equivalent balance worsened by 150 percent to a negative of $35,053 million.

In an effort to raise cash, the group has sold Treasury Bills worth $7 million at discount rates ranging between seven and nine percent.

Going forward, Nzwere said positive rainfall forecasts will spur demand for seed and enhance sales.

Additionally, the commissioning of new seed drying and processing facilities in Kenya is expected to increase its foothold in the East African region.