See Dc of y 2013 Presentation

7/28/2019 See Dc of y 2013 Presentation

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Au te Fu Year IncomeStatement

MARCH 2013

US $ M

MARCH 2012

US $ M

% INCREASE/

(DECREASE

REVENUE 110,6 117,7 (6%)

OPERATING EXPENSES 30,9 29,3 5%

FINANCE COSTS 7,4 4,3 72%

P B T 15,5 23,4 (34%)

PAT 12,6 19 (34%)


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Full Year EBITDA & EPS

0

5,000

10,000

15,000

20,000

25,000

30,000

2009 2010 2011 2012 2013

18,23019,663

28,175 29,90026,341

Group EBITDA $ 000s

6.62 6.77

9.059.91

6.49

-

2.00

4.00

6.00

8.00

10.00

12.00

2009 2010 2011 2012 2013

EPS( US cents)


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Sales VolumesMARCH 2013

Metric tones

MARCH 2012

Metric tones

%

INCREASE/

(DECREASE

MAIZE 34 667 35 678 (3%)

WINTER CEREALS 2 758 5 450 (49%)

COTTON 11 867 12 148 (2%)

SOYA BEANS 7 581 5 221 45%


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Maize & Cotton

Maize seed

Very late rains in the main markets

Reduced Gvt & related input programmes

Tight liquidity facing Small scale farmers

Cotton seed

Slow uptake of seed due to price disputes in

industry


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Winter Cereals

Continued weak demand

Poor Commodity prices

Power shortage

Soya beans

- Increased demand for soyabeans in the region


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F2012

Turnover Contribution

Zimbabwe

33%

Zambia

23%

Malawi14%

SCI4%

SC Tanzania

7%

Kenya

5%

Quton Zim

11%

Quton Tanzania

3%

F 2013


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Gross Margins

FULL YEAR 2013 FULL YEAR 2012

GP % 46 45

Devaluation of the Malawi kwacha

reduced the growth in margins


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Operating Costs & Finance Charges

Operating Costs up 5% due to

Right sizing costs of $2m across the Group

Finance charges up 72% due to

-carry over borrowings used to finance the

stocks

-Increase in interest rates due to liquidity

challenges in Zim and Malawi


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Statement of Financial PositionSummary of Assets at year end


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Debtors Perfomance

Zimbabwe:There has been good progress on the 13,7m due from

Zim Gvt last year which has cumulatively paid 9,1mleaving a balance of 4,6m now expected to be paid

before June 2013Other related input programmes in Zimbabwe owe

$11,2m on current year sales ,expected to pay bySeptember 2013

Payments still slow on some overdue Zim debtors.

Other CountriesNo problems expected from both Gvt and Other

traders in the region


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Inventories & Borrowings

InventoriesMaize Stocks down from 49k mt to 36,9mt

Zim stocks down from 23k mt last year to 13k mt

Stocks now balanced Borrowings

Borrowings have remained unchanged at $45m due to

delayed payments from major debtors ( esp Gvt)Interest rates now down to a weighted average rate of

11,75% pa

16

%


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FULL YEAR 2013

Operations Review


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THE SEED BUSINESS


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General Environment

Zambia

Economy booming Rebasing of the kwacha

Continued participation in inputs schemes by Govt

Low tax regime

Introduction of new exchange controls

Zimbabwe Depressed Government input activity

Liquidity still a serious issue

Payment issues

Elections

Malawi

Continued kwacha devaluation

Seed Input programme up

Renewed confidence

New factory back on track


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Environment contd

East Africa

Growing market

Inroads into Rwanda

West Africa

Growing economies

Muslim insurgency


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What have we been focussing on ?

Reducing stocks to free up cash

Chasing up debtors

Reducing costs through rightsizing

Growing business in new markets

Identify technical partners in West Africa

Reducing borrowing costs

Technology enhancement of Research activities

Widen product basket in East Africa

Highlandvarieties

Research on MNLD in East Africa


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Key developments 16 new varieties released in 2013 300 series released bulking up in progress Technology lab nearing completion Monsanto & PSR agreement F1 conversions now in the ground

in USA Breeders compliment beefed up MLND Research in East Africa

Research & development

-

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

2009 2010 2011 2012 2013

0.77

1.44

3.21

4.23 4.22

Investment in R & D

$m


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MLND INFECTION


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MLND IN EAST AFRICA


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MLND IN EAST AFRICA.


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Production Production right-sized

Maize:

Stocks back to desired carry by next financial year

end

Focus on quality

East Africa production being managed

Closing stock 2013 36600

Expected deliveries 23500

Total available for sale 60100

Expected sales 44000

Projected closing stocks 16100


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Aggregate Production

Crop 2012/13 2013/14Maize 29,300 23,500

Cotton 16,900 12,200

Soya beans 10,000 10,500

Winter Cereals 2,700 2,650

Totals 58,900 48,850


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Processing Capacity

New Seed processing plant in Kenya

commissioned in January

New Acid delinting plant commissioned early

this year in

Mwanza, Tanzania

Lilongwe, Malawi

Malawi factory construction

expecting to

complete in April 2014

i


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Penetration

Last mile reduced with appointment of

additional distributors in all marketsExtension officers recruited in Zim, Malawi,

Zambia and Tanzania to assist with

proliferation


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Proliferation

West AfricaAgreement with Saro Agro-Sciences in Nigeria signedMO826 about to be released

DRC

DRC Depot was operational for first time

good earlyindications

EthiopiaProduction facilities still a stumbling block

East AfricaDistribution network grown

Recruitment of growers for the highlands

First sales in the highlands


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OUR FOOTPRINT..


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Key challenges inside our controlCurrent

trendComment Previous trend

Grower

productivity

Higher yields

Quality going up

Costs Unit costs are comingdown

Bad debts a concern

Staff Headcount reduced by 90


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Current trend Comment Previous trend

Cost of debt Reduced WACC Average no around 11%

Sales Volumes up in Malawi and

East Africa New cotton plants in Malawi

& Tz

Zim depressed

Inventories Inventories reducing Working capital freed

Key challenges inside our control


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Current

trend

Comment Previous

trend

Weather Erratic Rains

Seed prices Prices up in Zambia & East

Africa Depressed demand in Zim

Kwacha devaluation in

Malawi

Seed demand Opportunities in East Africa& Malawi

Buying power +ve region Buying power neutral Zim

Competition Maintaining our position Growing regionally

Key challenges outside our control

h ll


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Current

trend

Comment Previous

trend

Political Uncertainty Inconsistent Government

policies

Election year?

Banking

sector

Unstable

Absence of credit

Liberal exchange controls

High rates of interest

Macro -climate

Appears to be growth

Key challenges outside our control


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Outlook

Reduced stock holding freeing up cash Better support for agriculture after elections serious maize deficit

looming

Upcoming elections in Malawi should drive up demand in that market.

The new cotton seed businesses to start contributing meaningfully in the

coming year Continued upward growth projectile in East Africa.

Reduced costs as a result of the right-sizing

Continued business development efforts in West Africa

Introduction of the e-voucher system in Zambia should give the farmerschoice in terms of the seed they buy

The recently released 300 series should also increase uptake bycommunal farmers in drier areas due to their earliness

Our products will continue to outperform the competition

Documents

See Dc of y 2013 Presentation