Seedco profit declines
Seedco International has recorded One point five Million United States Dollars (US$1.5 Million) profit for the half year ended September 2021- Approximately Seventeen Million Pula (P17 Million. That is against Two point five Million United States Dollars (US$2.5 Million)- roughly Twenty-seven Million Pula (P27 million) recorded last year during the same period.
This One Million United States Dollars (US$1 million)- about Eleven Million Pula (P11 Million) profit decrease has been attributed to rise in operating expenses and flactuated tax rates among other factors.
“Other income declined on the back of the once-off non-seed sales done last year not repeating. Operating expenses rose in line with the increase in sales because of the associated distribution costs. Furthermore, some of the savings arising from limited activities due to COVID-19 containment measures in the previous year did not recur. Additional overheads were incurred on business development activities in the nascent Ethiopian and Mozambican markets.
The Group’s tax expense surged as the Group’s profitability was heavily skewed towards higher tax jurisdictions versus last year which is mainly responsible for the decrease in the profit for the period under review.” E M Kalaote, Company Secretary reported.
However, the management is cautiously optimistic of achieving earnings growth from prior year underpinned by sustained regional seed demand driven by the need to achieve food security amidst the pandemic and save foreign currency on food imports. On the contrary, Seedco is worried about the unfavourable weather forecast in East Africa which poses a downside risk though this should be offset by availability of early maturing seed varieties which are suitable in drought conditions in that market. As normal to above-normal rainfall is expected elsewhere, the company is optimistic about doing well going forward.
Some of the highlights on Seedco’s performance on the just ended half year include; fourteen percent (14%) increase in maize seed sales volume; Twenty-seven percent (27%) increase in revenue; Nine point five percent (9.5%) increase in EBITDA (earnings before interest, taxes, depreciation, and amortization), and One point four percent (1.4%) decrease in net debt.