SeedCo Limited says maize seed sales volumes declined by nearly one-third in the year ending March 2024 due to the El Niño-induced drought, as reported by the Chronicle.
On the positive side, export sales saw a substantial increase, effectively mitigating the impact of decreased local seed demand.
In the financial statement for the year ending March 31, 2024, SeedCo’s group company secretary, Tineyi Chatiza, attributed the decline in sales volumes to the El Niño-induced drought, which adversely affected both maize and soya seed sales. He said:
Sales volume of the flagship crop, maize seed, was below prior year by nearly a third. On the other hand, export sales increased notably earning the business with much-needed foreign currency while at the same time reducing the impact of lower local demand for seed.
Regarding wheat seed sales, Chatiza reported that volumes remained steady compared to the previous year, despite challenges faced by farmers, including power cuts, high input prices (such as fertiliser), and exchange rate volatility.
Nevertheless, Chatiza expressed cautious optimism about Zimbabwe’s economic outlook, even in the face of ongoing challenges. He said:
The agricultural sector, a vital economic driver, is expected to improve with anticipated favourable weather conditions as El Niño transitions to La Niña in the upcoming season.
Moving forward, the focus will be on increasing the contribution of exports and USD-denominated sales while ensuring competitive pricing and effective cost management.
The firm said it remains committed to leveraging its intellectual property by providing an optimal mix of seed varieties suitable for diverse conditions, including both drought-prone and favourable rainfall environments.
Chatiza said due to low sales volume performance, revenue dropped by 10 per cent. However, other income increased due to exchange gains from US dollar-denominated receivables and higher non-seed sales.
He reported that finance costs accounted for 16 per cent of turnover, a decrease from the previous year’s 26 per cent.
Despite the lower sales volumes, SeedCo achieved an eight per cent improvement in profitability compared to the previous year, primarily due to exchange gains resulting from the revaluation of US dollar-denominated receivables.
SeedCo said that research and development continue to be the cornerstone of its competitive advantage. The company is actively pursuing various climate-responsive product initiatives across different pipeline stages.
SeedCo has expanded its maize seed portfolio by introducing SC661 and SC657, both medium-maturing hybrid varieties.
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