Almot Maqolo, Staff Writer 
SEED CO International (Seed Co) says it is revamping both its business model and balance sheet to address the growing cost of conducting business and to protect itself against depreciating currencies in the countries where it operates.
The pan-African seed processor indicated that its market position and brand equity were strong, as seen by the volume and turnover increases recorded during the year ended March 31, 2023. This comes amidst global and regional challenges.
The company’s topline rose 16,94 percent to US$103,5 million during the year from US$88,5 million previously attributable to good volume performance in East Africa as well as Zambia.
“The financial year under review was of mixed fortunes evidenced by record business growth in some markets, reduced business in others, and loss of value from exchange losses as regional currencies depreciated against the US dollar,” the company said in a statement accompanying its financial results.
“Despite achieving business growth that is testimony of brand resilience, external factors mainly exchange losses more than reversed business growth gains, and reduced the group’s profitability.”
Seed Co’s profit declined by 59,15 percent to US$2,9 million during the year ended March 31, 2023 from US$7,1 million in the comparable period. Supply shocks from around the world and high import inflation continue to exacerbate the consequences of climate change in Africa.
“The group, however, remains optimistic about the prioritisation of primary food production in Africa to mitigate global shocks,” Seed Co said.
“Further, the group is restructuring both its business model and balance sheet to respond to the rising cost of doing business and to hedge against weakening currencies.”
The company’s topline rose 16,94 percent to US$103,5 million during the year from US$88,5 million previously attributable to good volume performance in East Africa as well as Zambia. Maize seed sales volumes went up 14 percent during the year under review.
The pressure from worldwide inflation that could not be passed on to small-scale farmers resulted in a flat gross margin, according to the company.
“Other income reversed significantly into negative, driven by exchange losses as regional currencies weakened against the US dollar,” Seed Co said.
Operating expenses jumped 6,47 percent to US$32,9 million from US$30,9 million.
“Overheads increased in line with business growth in East Africa and in response to global inflation developments.”
The group said the expansion in capital expenditure and working capital resulted in higher borrowings and financing costs.
Exchange losses were a major factor in the negative contribution of associates and joint ventures.
No dividend was paid during the period under review.
