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Sikhulekelani Moyo, Business Reporter

LISTED seed producer, SeedCo Limited, has reported an eight percent drop in turnover for the full year ended 31 March 2022 attributed to a decline in sales volumes due to delayed onset of rains in the last season and pricing distortions.

SeedCo

During the same period, the company said it also recorded reduced profit before tax of $0,9 billion when compared to $1,9 billion recorded in the previous year.

In a statement accompanying financial results for the period, the company said margin shrinkage from 64 percent down to 33 percent was recorded and blamed this on exchange rate distortions, which affected pricing resulting in the business incurring 15 percent increase in overheads.

“The company posted an inflation-adjusted turnover of $9,3 billion, which is eight percent lower than restated prior year’s $10, 1 billion with the decline being attributed to the drop in volumes by 20 percent due to the late onset of rains and pricing confusion at the start of the selling season,” said group’s chairman, Mr David Long.

“The impact of deferred tax on revalued assets reversed the profit before tax into an inflation-adjusted net loss $0,6 billion compared to a restated inflation-adjusted $1,4 billion prior year net profit.”

Seed Co Limited is a producer and marketer of certified crop seeds in Africa, mainly hybrid maize seed, but also wheat, soya bean, barley, sorghum, and groundnut seed.

Mr Long said while economic and climate challenges continue to affect seed production plans, the seed inventory available for sale in 2022 financial year was adequate to meet demand in Zimbabwe.

“The company released several new seed varieties all of which seek to provide solutions to our farmers to deal with the adverse effects of climate change,” said Mr Long

“We continue to invest in research and development as we pursue our vision, anticipating future needs due to climate change as well as changing eating habits.”

Covid-19

While the market is still grappling with the Covid-19 pandemic effects and local economic dynamics, he said the Russia-Ukraine war has further complicated global supply chains.

“Economies like Zimbabwe that were fragile already are likely to bear the brunt of the war as they have limited resilience to withstand imported global inflation as well as food, energy, and chemical shortages,” he said

“There are, however, opportunities for primary food and commodity producers in African countries to step up and fill the Russia and Ukraine supply void.”

Zimbabwe has this year increased winter wheat production in order to mitigate grain shortages brought by the Russo-Ukrainian war, which started early this year. -@SikhulekelaniM1