SeedCo in $3.5m capex increase

Published: 28 November 2017

LEADING seed manufacturer SeedCo increased its capital expenditure by 9.4 percent to $3.5 million during the half-year ended September 30, 2017 compared to $3.2 million during the corresponding period last year.

The seed producer said during the period under review, it has made significant progress on research and technology programmes.

"Property, plant and equipment increased by $1.6 million from the previous year end rising from acquisition of land in Botswana, construction of buildings at Potchefstroom research station; capital improvements at research stations in Zimbabwe; purchase of vegetables seed processing and packing plants by Prime Seed Co," said the seed producer.

"Capital expenditure for the period was $3.5 million."

It said progress had also been made in listing its products on the Common Market for Eastern and Southern Africa (Comesa) catalogue, which enables free trade of seed without the need for further trials once the product has been released in a particular market.

The seed manufacturer has so far registered on the Comesa catalogue 11 maize varieties, four soya bean varieties, and three groundnut varieties.

"The genotyping laboratory is working very well with all testing now being done in-house. The first generation of MLND tolerant hybrids have been submitted for registration in Kenya," it said.

During the period under review, SeedCo's turnover rose by 45 percent to $36.1 million due to early maize seed sales and improved winter cereal seed sales.

The loss after tax improved from $9.3 million to $2 million due to growth in maize sales, reduced finance costs and exchange losses and early cotton seed sales that saw the cotton business posting a profit as compared to a loss in the prior year.

"Loans and receivables decreased as some Treasury Bills, which were previously classified as long-term were re-classified to current assets because their maturity dates now fall within the next 12 months," said the firm.

Payments for dividend, capital expenditure, seed deliveries, fertilizer, chemicals, tax and operating expenses were largely responsible for the depletion of cash and cash equivalents from $55 million as at year end to $24 million as at the end of September 2017.

On the outlook, SeedCo anticipates a stable set of earnings due to among others, continued market share growth in key markets, particularly East Africa as adoption of the company's hybrid seed in that region was rising.

Stable earnings were also expected due to the continuing input programmes in Zambia, Malawi and Zimbabwe.
- zimpapers

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