VICTORIA FALLS Stock Exchange-listed firm, Seed Co Limited, registered a strong turnover in the financial year ended March 31, 2023, despite global supply shocks and high inflation.
This, according to the company's secretary Eric Kalaote, confirms the strength of the group's market standing and brand equity.
The group's profit for the year declined to US$2,9 million from US$7,1 million in the comparable period last year.
Revenue, however, increased to US$103 million from US$88,5 million for the same period last year.
The increase in revenue was attributed to good volume performance in east Africa as well as Zambia, according to Kalaote.
Gross margin was flat and faced pressure from imported global inflation that could not be passed on in prices to the small-scale farmers.
"Receivables increased mainly due to the growth in business this year. Included in receivables is US$5,5 million due to related parties, that is, a reduction from US$5,9 million owed prior year," Kalaote said during an analyst briefing on Tuesday.
"The group's net profit to debt ratio increased because of lower profitability and the impact of exchange losses on equity."
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He added: "Turnover and volume growth registers this year confirm the strength of the groups' market standing and brand equity amid global and regional challenges.
"Global supply shocks and imported inflation remain elevated further compounded the effects of climate change in Africa."
Kalaote said despite achieving business growth, external factors mainly exchange losses remained a challenge as they reversed business growth gains, reducing the groups' profitability.
Other income declined significantly into negative driven by exchange losses as regional currencies weakened against the greenback.
Overheads increased in line with business growth in East Africa in response to global inflation developments.
"The group's cash generation remained positive but at a lower level compared to prior year. Borrowing costs increased from Capex (capital expenditure) and working capital growth, " he said.
The groups' non-current assets decreased in the period under review due to the impact of depreciating regional currencies. Also the carrying value of investments in associate and joint ventures reduced due to foreign currency-induced losses.
Kalaote, however, said the group remained optimistic about the prioritisation of primary food production in Africa to limit global shocks.
