Local seed producer, Seed Co limited turnover for the year ended September 2017 has increased by 45% to $36,1 million due to early maize seed sales and improved winter cereal seed sales.
According to the Group Secretary, John Matorofa, gross margin rose by 9% points to 49% attributable to the increased maize seed volumes.
“Gross margin rose by 9% points to 49% attributable to the increased maize seed volumes.
“Other income mainly relates to doubtful debts recoveries and non seed sales offset by reduced exchange losses this period,” said Matorofa.
He added that operating expenses went up by 27% due to research activities the company conducted in Muzarabani and Potchefstroom research stations.
“Operating expenses went up by 27% on account of increased research activities at Muzarabani and Potchefstroom research stations as well as increased throughput at the technical laboratory.
“There were also increased sales and marketing activities in some markets ahead of the selling season.
“In addition,non-recurring costs associated with the impending group restructuring exercises were incurred during the period.
“Finance charges declined as a result of the Group’s reduced net debt position at year end following strong cash generation in the last financial year.
“The loss after tax improved from $49.3 million to $2.0 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,” he added.
Trade receivables increased due to winter cereal sales.
“Trade receivables increased due to winter cereal sales,cumulative collections since year end were $38 million included in the receivables balance are amounts due from various regional governments amounting to $11.6 million.
“While significant progress has been made on collection of government receivables,efforts are being made ton get the outstanding amounts liquidated soon,” said Matorofa.
He added that the bumper harvests recorded in Zambia and Malawi led to a subdued commodity price for grain though it was not clear what the overall impact on the demand of seed will be in these markets.