Seed Co International Limited anticipates rising costs of doing business due to inflation and the effects of climate change in Africa. Commenting on the Published Financial Results for the year ended March 2022, SeedCo International Chief Executive Officer, Morgan Nzwere highlighted that the year was marked by the adverse effects of climate change (late and erratic rains with incidences of drought and flooding) that was at variance with normal-to-above normal rainfall forecasts.
“The Covid-19 pandemic, soaring fertiliser prices and currency fluctuations added to make the financial year more challenging.” The group recorded declined profits of US$7.1 million compared to US$ 11.1 million last year. Nzwere pointed out that The Group's cash generation remained positive but at a lower level compared to prior year. Borrowings and finance costs increased from CAPEX and working capital growth. “The Group's net profit reduced markedly because of these volume decline and pressure on margins.” Revenue was flat, albeit on reduced sales volume, helped mainly by the strengthening of the Zambian kwacha against the USD and business growth in Mozambique.
Volume uptake was impacted by bad weather and reduced government subsidy support in Malawi. Nzwere highlighted that non-current assets increased due to new CAPEX focused on enhancing seed production as well as capitalisation of the vegetable seeds joint venture. He said they expect global supply shocks and imported inflation to impact the cost of doing business. “Regional food security will however remain top of the agenda to mitigate global supply shocks, and the Group will step up its operations to satisfy the anticipated increase in the demand for seed in regional markets.” Seed Co International has subsidiaries, an associate and joint ventures located in Botswana, Democratic Republic of Congo (DRC), Ghana, Kenya, Malawi, Mozambique, Nigeria, Rwanda, South Africa, Tanzania, and Zambia. Its operations in Angola, Ethiopia and parts of West Africa are in developmental stages.