Afgri a5 booklet feb2012

Unaudited condensed consolidated financial results for the six months ended 31 December 2011

and cash dividend declaration

AFGRI LIMITED (Incorporated in the Republic of South Africa)

(Registration number: 1995/004030/06) ISIN number: ZAE000040549 Share code: AFR

Growth the natural outcome

Unaudited condensed consolidated financial results for the six months ended 31 December 2011 and cash dividend declaration

Administration

Business address and registered officeAFGRI Building, 12 Byls Bridge BoulevardHighveld Ext 73, Centurion, 0157 Tel 011 063 2347Fax 087 942 5010

Company SecretaryMs M ShikwinyaPO Box 11054Centurion, 0046 BankersABSA Bank LimitedFirstRand Bank LimitedHong Kong and Shanghai Banking CorporationInvestec Bank LimitedLand and Agricultural Development Bank of SA LimitedNedcor LimitedStandard Bank of SA LimitedStandard Chartered Bank

AuditorsPricewaterhouseCoopers Inc.32 Ida StreetMenlyn Park, 0102PO Box 35296Menlo Park, 0102Tel (012) 429 0000

Transfer secretariesComputershare Investor Services Proprietary Limited70 Marshall StreetJohannesburg, 2001 PO Box 61051Marshalltown, 2107 Tel: 011 370 5000

SponsorInvestec Bank Limited100 Grayston DriveSandton, 2196PO Box 785700Sandton, 2146Tel (011) 286 7000

Directorate

Non-executiveJPR Mbau (Chairman), DD Barber, L de Beer, LM KoyanaBA Mabuza, NL Shirilele, CT Vorster, NC Wentzel

ExecutiveCP Venter (Chief Executive Officer)JA van der Schyff (Financial Director)

www.afgri.co.zaThis announcement is available on SENS and AFGRI’S website at

page 1


Revenue from all operations 24%

Improvement in debt equity ratio from 2,9 to 1,8

Substantial reduction in contribution from poultry business unit

HEPS from all operations 17% to 36,9 cents (2010: 44,6 cents)

Retail and equipment profits on the back of record tractor sales

Continued expansion into the Foods sector

Strong grain management performance despite lower silo volumes


page 2


Commentary

The directors of AFGRI Limited (“AFGRI”) are pleased to present the unaudited condensed consolidated interim financial results of the AFGRI Group of companies (“the Group”) for the six months ended 31 December 2011.

Operating environment The final 2011 summer crop in the AFGRI area, estimated at 2,9 million tons, was 19% below the 2010 season’s crop. During the 2011 calendar year, the grain storage industry saw high despatch rates, the result of higher maize exports, leading to generally lower stock levels. The opening stock stored in AFGRI silos at 1 July 2011 was 600 000 tons lower than 1 July 2010 as a result of these factors. At 31 December 2011, stock stored in AFGRI silos of 915 000 tons is 37% down on the stock holding on 1 January 2011. The impact of these reduced volumes in the silos had an estimated R48 million negative effect on profit before tax, compared to the prior period.

Maize prices reached record levels at the end of 2011, increasing from approximately R1 400/ton in March to over R2 600/ton during December 2011.

The increasing maize price encouraged farmer spending on mechanisation and other farming requisites, leading to improved results from the Group’s retail and equipment division, but placed pressure on margins in AFGRI’s foods sector business units. In particular, higher raw material prices and increased competitiveness in the market negatively affected the animal feeds division’s results. A 33% increase in feed prices, driven primarily by maize prices, placed margins under pressure at the AFGRI poultry division which only managed to pass some of this increase on to consumers with an 18% increase in average selling prices.

Rand strength inhibited price increases of imported goods such as farming implements and inputs, but encouraged poultry imports. Low interest rates failed to stimulate growth in consumer spending due to concerns over rising inflation and the continuing hangover of the 2008 financial crisis.

The financial services division posted an increase in fee income which resulted in an improvement in profits.

Agricultural conditions in Western Australia improved and this business unit posted an increase in mechanisation sales.

Operational review AFGRI continues to focus its activities in three segments – AFGRI Agri Services, AFGRI Financial Services, and AFGRI Foods. The acquisition of the yellow maize milling business of Pride Milling was approved by the Competition Commission and the results of this operation have been included from 1 December 2011 under the renamed Oil, Milling and Protein division. The acquisition of Rossgro Poultry was only effective from 1 March 2011 and as such the comparative period figures do not include any results from this operation.

The results of the Group’s African and Australian activities are reported under the retail and equipment division.

AFGRI’s John Deere dealership increased its market share for the period to 31%, from 27%. This was achieved through record sales of tractors across all operations. AFGRI entered the mechanisation market in Zimbabwe by establishing a John Deere dealership in which AFGRI owns 49%.

Sales in the Group’s retail stores strengthened and margins were maintained. Greater competition by suppliers and the increasing availability of credit resulted in a reduction in the division’s bulk direct sales to farmers.

On 1 December 2011, AFGRI successfully concluded the sale of its farmers debtors book to the Land Bank. This resulted in R1,57 billion (R1,80 billion by 31 December 2011) of farmers’ debtors being sold to the Land Bank and a concomitant reduction in the Group’s liabilities by a similar amount. The cash collateral deposits associated with this liability had been renegotiated and released in the previous financial year. The Rabo Bank debt securitisation structure was also unwound on 1 December, resulting in the release of R75 million of cash collateral deposits. A further R88 million of cash collateral deposits were released through the renegotiation of the Group’s Wesbank facility. Management hopes to finalise a similar transaction for its corporate debtors book by 30 June 2012. These transactions resulted in a much stronger balance sheet and provides AFGRI with a solid foundation to grow its financial services offering to the agricultural sector.

Despite the current challenging trading environment for poultry, other sectors in the Group remain strong and committed to growing their representation in the industrial foods processing sector. 51% of the Group’s year-to-date capital expenditure has been invested in the foods segment, notably at Nedan and Animal Feeds. The planning and design of the new preparation and extraction plants at Nedan, to be commissioned in April 2013, is progressing well.

The results of AFGRI Poultry for the six months ended 31 December 2011 are disappointing. The main cause is market forces putting pressure on margins, and operational inefficiencies which are currently receiving serious attention. To this end, the management team at AFGRI Poultry has been strengthened by the appointment of Mr Izaak Breitenbach, as Managing Director, to ensure the success of both the continuing operations and expansion projects. Mr Breitenbach has 25 years’ experience in the poultry industry, and is highly regarded and well placed to direct the operations of AFGRI Poultry. The operations at Rossgro have been integrated into AFGRI Poultry. The opportunity to reduce this processing plant’s relatively high unit costs will be addressed to realise the full value of the operation. In order to extract synergies throughout the entire poultry production chain, from grandparent stock to processing plant capacity, further expansion is being considered.

page 3


Following a preliminary investigation into the dumping of chicken products, the International Trade Administration Commission found enough evidence of dumping by Brazilian exporters to request the South African Revenue Service to increase duties on imported Brazilian chicken products for an interim 26-week period. AFGRI welcomes these provisional findings and is confident of a similar finding once the investigation is finalised.

Another notable development during the period was the purchase of business premises, including offices, showroom and workshop in Lusaka, and the establishment of a bunker in the Mkushi area of Zambia. Both of these exciting projects are reported under the retail and equipment division.

Financial review Higher commodity prices, in particular maize, drove the Group’s revenue up by 27% to R4,4 billion (2010: R3,5 billion) for the six months ended 31 December 2011. Increased raw material and feed cost could not be fully recouped from customers resulting in lower gross margin percentages, particularly in the animal protein division. However, margins were maintained in the retail and equipment division.

The lower interest rates and the sale of the farmer debtors book with effect from 1 December 2011 saw interest on trade receivables decline during the period. The finance cost of R200 million (2010: R205 million) do not reflect a commensurate reduction due to increased borrowings resulting from the Group’s Rossgro acquisition and its capital expenditure of R111 million (2010: R171 million). Included with finance cost is an amount of R39 million (2010: R40 million), relating to the finance charge on the borrowings associated with the Group’s B-BBEE ownership structure.

The Group controlled its selling and administration expenses well by limiting it to an 8% increase.

Profit for the period from continuing operations of R134 million is 16% lower than the comparative period’s R159 million. This decrease of R25 million is analysed in the Group’s business segment results below. The Group has reported no results for discontinued operations for the current period (2010: loss of R12 million). Profit for the period from all operations is 9% lower than the prior year.

Given the challenging environment in the foods and grain management segments, headline earnings per share from all operations for the period reflect a decrease of 17% from 44,6 cents to 36,9 cents and earnings per share from all operations of 39,7 cents, reflect a decrease of 11%.

The Group’s net asset value per share has increased by 10% during the six months from 30 June 2011. Inventory levels have been well controlled and the increase in inventory values is the result of higher commodity prices and the consolidation of Pride Milling’s inventory.

Trade and other receivables have decreased by R1,5 billion from 30 June 2011 due to the sale of the farmer debtors book. Bank borrowings to finance trade receivables reflects a similar reduction. This transaction has allowed AFGRI to reduce its debt to equity ratio to 1,8 at period end compared to 2,9 at 30 June 2011.

The period leading up to December is traditionally a period when the Group experiences negative cash flow due to the advancing of funding to farmers and increasing inventories during the growing season. However, during 2011, working capital increases were well managed given the higher commodity prices. The purchase of the yellow maize milling operation of Pride Milling was finalised at R220 million. This, together with selected items of capital expenditure, were funded through general banking facilities.

Changes to the Board of Directors and Company SecretaryMs Marion Shikwinya was appointed as AFGRI’s Company Secretary with effect from 1 February 2012, replacing Ms Niki van Wyk.

On 13 February 2012, AFGRI announced the appointment of Mr Nick Wentzel as an independent Non-executive Director to the Board of AFGRI.

ProspectsThe recent 2012 summer crop estimates indicate a maize crop of 16% higher than 2011, and receipts into the silos are not expected to begin until mid-April. Low silo stock levels are therefore expected over the second half of the financial year in the grain management division. Maize prices are expected to remain high until harvesting of the 2012 crop, depending on the final crop size and international prices. This could result in continued margin pressure in the food businesses. Given the difficult trading conditions and low maize stock, cost control will remain a focus area of the Group’s operations during the second half of the financial year.

Sales of farming mechanisation are expected to remain strong throughout the summer crop harvest.

With the sale of the farmer debtors book completed, AFGRI Financial Services now has the platform and the requisite funding stream from which to expand its offerings.

Animal protein, especially AFGRI Poultry, is expected to remain under pressure for the second half of the financial year with the remainder of AFGRI’s performance expected to be in line with the market prospects for the various business units.

By order of the Board

JPR Mbau CP VenterChairman Chief Executive Officer28 February 2012

page 4


Group balance sheet (R’millions)

Note

31 December Unaudited

2011

31 DecemberUnaudited

2010

30 JuneAudited

2011

ASSETS

Non-current assets 2 718 2 196 2 464

Property, plant and equipment 1 845 1 512 1 699

Goodwill 248 37 118

Other intangible assets 256 286 269

Investments in associates 48 36 41

Available-for-sale financial assets 41 42 41

Financial receivables 164 161 164

Deferred income tax assets 116 122 132

Current assets 4 310 5 656 5 474

Inventories 1 227 934 1 024

Biological assets 47 64 53

Trade and other receivables 630 509 450

Trade receivables financed by banks 5 1 895 3 290 3 425

Derivative financial instruments 44 64 91

Current income tax assets 22 2 26

Cash and cash equivalents and cash collateral deposits 445 793 405

Cash collateral deposits 54 399 147

Cash and cash equivalents 391 394 258

Assets of disposal groups classified as held-for-sale 7 17 40

Total assets 7 035 7 869 7 978

EQUITY

Capital and reserves attributable to equity holders 1 734 1 592 1 571

Share capital – – –

Treasury shares (86) (90) (90)

Incentive trust shares (130) (151) (133)

Fair value and other reserves (22) (63) (64)

Retained earnings 1 972 1 896 1 858

Non-controlling interest 5 6 4

Total equity 1 739 1 598 1 575

LIABILITIES

Non-current liabilities 770 1 016 748

Borrowings 572 832 560

Deferred income tax liabilities 183 184 188

Provisions for other liabilities and charges 15 – –

Current liabilities 4 526 5 255 5 648

Trade and other payables 1 393 1 164 1 221

Derivative financial instruments 44 79 41

Current income tax liabilities 7 15 2

Short-term borrowings – – 10

Call loans and bank overdrafts 1 187 674 951

Bank borrowings to finance trade receivables 5 1 895 3 323 3 423

Liabilities of disposal groups classified as held-for-sale – – 7

Total liabilities 5 296 6 271 6 403

Total equity and liabilities 7 035 7 869 7 978

Net asset value per share attributable to equity holders (cents) 486 446 441

page 5


Business segment results (R’millions)

AGRI SERVICES FINANCIAL SERVICES FOODS OTHER TOTALS

Six months ended 31 December 2011 and six months ended 31 December 2010

Retail andequipment

GrainManagement Animal protein Oil, milling and protein Corporate BEE SPVs Inter-group eliminations Continuing operations Discontinued operations All operations

Unaudited 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010

Revenue 2 014 1 620 252 287 201 214 1 780 1 390 379 264 – – – – (47) (106) 4 579 3 669 – 36 4 579 3 705

– sale of goods and or services 2 007 1 609 252 287 74 63 1 780 1 390 379 264 – – – – (47) (106) 4 445 3 507 – 36 4 445 3 543

– interest 7 11 – – 127 151 – – – – – – – – – – 134 162 – – 134 162

Operating profit/(loss) (before the items below) 86 61 134 151 118 131 103 153 24 24 (9) (30) – – – – 456 490 – (13) 456 477

– other operating income – – – – 3 10 – – – – 5 6 – – – – 8 16 – – 8 16

– depreciation and amortisation (8) (7) (10) (9) (12) (16) (36) (33) (4) (2) (13) (5) – – – – (83) (72) – (2) (83) (74)

Operating profit/(loss) 78 54 124 142 109 125 67 120 20 22 (17) (29) – – – – 381 434 – (15) 381 419

Other items of profit and loss 7 – – – – – – – – – – – – – – – 7 – – – 7 –

– share of profit/(loss) of associates 7 – – – – – – – – – – – – – – – 7 – – – 7 –

Profit/(loss) before finance costs 85 54 124 142 109 125 67 120 20 22 (17) (29) – – – – 388 434 – (15) 388 419

Finance costs (23) (19) (18) (10) (74) (93) (34) (37) (9) (3) (3) (3) (39) (40) – – (200) (205) – (2) (200) (207)

Profit/(loss) before income tax 62 35 106 132 35 32 33 83 11 19 (20) (32) (39) (40) – – 188 229 – (17) 188 212

Income tax (54) (70) – 5 (54) (65)

Profit after tax 134 159 – (12) 134 147

Assets 1 612 1 737 882 898 2 023 3 402 1 938 1 551 720 191 653 526 (43) (256) (750) (180) 7 035 7 869 7 035 7 869

Non-current assets 296 235 397 378 319 541 1 110 879 337 86 302 333 (43) (256) – – 2 718 2 196 2 718 2 196

Other current assets 836 819 98 109 40 5 253 260 177 33 39 35 – – (96) (180) 1 347 1 081 1 347 1 081

Trade and other receivables 387 495 371 358 1 597 2 435 547 402 206 72 71 37 – – (654) – 2 525 3 799 2 525 3 799

Cash and cash equivalents 93 188 16 53 67 421 28 10 – – 241 121 – – – – 445 793 445 793

Liabilities 512 760 237 318 1 600 2 676 750 652 294 76 1 856 1 470 558 550 (511) (231) 5 296 6 271 5 296 6 271

Non-current liabilities 6 103 2 1 20 19 97 277 22 8 65 63 558 545 – – 770 1 016 770 1 016

Other current liabilities 493 579 235 317 222 77 653 372 272 68 80 71 – 5 (511) (231) 1 444 1 258 1 444 1 258

Borrowings to finance trade receivables – – – – 1 358 2 542 – – – – 537 781 – – – – 1 895 3 323 1 895 3 323

Call loans and overdrafts 13 78 – – – 38 – 3 – – 1 174 555 – – – – 1 187 674 1 187 674

Net assets 1 100 977 645 580 423 726 1 188 899 426 115 (1 203) (944) (601) (806) (239) 51 1 739 1 598 1 739 1 598

Capital expenditure 38 9 10 16 – 11 48 46 9 11 6 78 – – – – 111 171 111 171


page 6




Retail andequipment


Unaudited 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010

Revenue 2 014 1 620 252 287 201 214 1 780 1 390 379 264 – – – – (47) (106) 4 579 3 669 – 36 4 579 3 705


– interest 7 11 – – 127 151 – – – – – – – – – – 134 162 – – 134 162








Finance costs (23) (19) (18) (10) (74) (93) (34) (37) (9) (3) (3) (3) (39) (40) – – (200) (205) – (2) (200) (207)


Income tax (54) (70) – 5 (54) (65)

Profit after tax 134 159 – (12) 134 147

Assets 1 612 1 737 882 898 2 023 3 402 1 938 1 551 720 191 653 526 (43) (256) (750) (180) 7 035 7 869 7 035 7 869





Liabilities 512 760 237 318 1 600 2 676 750 652 294 76 1 856 1 470 558 550 (511) (231) 5 296 6 271 5 296 6 271





Net assets 1 100 977 645 580 423 726 1 188 899 426 115 (1 203) (944) (601) (806) (239) 51 1 739 1 598 1 739 1 598


page 7

Unaudited condensed consolidated financial results for the six months ended 31 December 2011 and cash dividend declaration Unaudited condensed consolidated financial results for the six months ended 31 December 2011 and cash dividend declaration



Retail andequipment


Unaudited 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010

Revenue 2 014 1 620 252 287 201 214 1 780 1 390 379 264 – – – – (47) (106) 4 579 3 669 – 36 4 579 3 705


– interest 7 11 – – 127 151 – – – – – – – – – – 134 162 – – 134 162








Finance costs (23) (19) (18) (10) (74) (93) (34) (37) (9) (3) (3) (3) (39) (40) – – (200) (205) – (2) (200) (207)


Income tax (54) (70) – 5 (54) (65)

Profit after tax 134 159 – (12) 134 147

Assets 1 612 1 737 882 898 2 023 3 402 1 938 1 551 720 191 653 526 (43) (256) (750) (180) 7 035 7 869 7 035 7 869





Liabilities 512 760 237 318 1 600 2 676 750 652 294 76 1 856 1 470 558 550 (511) (231) 5 296 6 271 5 296 6 271





Net assets 1 100 977 645 580 423 726 1 188 899 426 115 (1 203) (944) (601) (806) (239) 51 1 739 1 598 1 739 1 598


page 8




Retail andequipment


Unaudited 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010

Revenue 2 014 1 620 252 287 201 214 1 780 1 390 379 264 – – – – (47) (106) 4 579 3 669 – 36 4 579 3 705


– interest 7 11 – – 127 151 – – – – – – – – – – 134 162 – – 134 162








Finance costs (23) (19) (18) (10) (74) (93) (34) (37) (9) (3) (3) (3) (39) (40) – – (200) (205) – (2) (200) (207)


Income tax (54) (70) – 5 (54) (65)

Profit after tax 134 159 – (12) 134 147

Assets 1 612 1 737 882 898 2 023 3 402 1 938 1 551 720 191 653 526 (43) (256) (750) (180) 7 035 7 869 7 035 7 869





Liabilities 512 760 237 318 1 600 2 676 750 652 294 76 1 856 1 470 558 550 (511) (231) 5 296 6 271 5 296 6 271





Net assets 1 100 977 645 580 423 726 1 188 899 426 115 (1 203) (944) (601) (806) (239) 51 1 739 1 598 1 739 1 598


page 9


Group income statement (R’millions)

Group statement of comprehensive income (R’millions)

Note

Six months ended


2011

Six monthsended


2010

Yearended

30 JuneAudited

2011

Continuing operationsSales of goods and rendering of services 4 445 3 507 6 998 Interest on trade receivables 134 162 292

Total revenue 4 579 3 669 7 290 Cost of sales* (3 477) (2 578) (5 231)

Gross profit 1 102 1 091 2 059 Other operating income 8 16 27 Other operating expenses* (729) (673) (1 407)

Operating profit 381 434 679 Finance costs 2 (200) (205) (387)Share of profit of associates 7 – 1

Profit before income tax 188 229 293 Income tax expenses (54) (70) (68)

Profit for the period from continuing operations 134 159 225

Discontinued operationsLoss for the period from discontinued operations – (12) (34)

Profit for the period 134 147 191

Profit for the period attributable to:Equityholders of the Company 133 146 190 Non-controlling interest 1 1 1


Number of shares in issue (’m) 375,5 375,5 375,5Weighted average number of shares in issue (’m) 333,3 328,7 328,5Diluted weighted average number of shares in issue (’m) 356,7 356,5 356,5

Earnings per share from continuing operations (cents) 39,7 47,0 65,5Losses per share from discontinued operations (cents) – (2,6) (7,5)Earnings per share from all operations (cents) 39,7 44,4 58,0

Diluted earnings per share from continuing operations (cents) 37,1 43,4 60,3Diluted losses per share from discontinued operations (cents) – (2,5) (6,9)Diluted earnings per share from all operations (cents) 37,1 40,9 53,4

* Prior year information has been reclassified. Refer to note 8.

Six months ended


2011

Six monthsended


2010

Yearended

30 JuneAudited

2011


Other comprehensive income Exchange differences on translating foreign operations 35 (3) 8 Cash flow hedges (4) 2 7 Other comprehensive profit/(loss) for the period, net of tax 31 (1) 15

Total comprehensive income for the period 165 146 206

Total comprehensive income attributable to:Equityholders of the Company 164 145 205 Non-controlling interest 1 1 1

165 146 206


page 10


Group cash flow statement (R’millions)

Six months ended


2011

Six monthsended


2010

Yearended

30 JuneAudited

2011

Operating activities

Cash generated by operations before changes in working capital and tax paid 259 279 381

Changes in working capital (340) (554) (360)

Tax paid (27) (12) (48)

Net cash utilised in operating activities (108) (287) (27)

Net cash utilised in investing activities (282) (122) (467)

Net cash generated from/(utilised in) financing activities 287 (139) (467)

Net decrease in cash and cash equivalents (103) (548) (961)

Cash and cash equivalents at the beginning of the period (693) 268 268

Cash and cash equivalents at the end of the period (796) (280) (693)

Cash collateral deposits 54 399 147

Cash and cash equivalents and cash collateral deposits (742) 119 (546)

page 11


Group statement of changes in equity (R’millions)

Sharecapital

Fair valueand otherreserves

Retained earnings

Treasuryshares

Incentivetrust

share

Totalshare-

holdersequity

BEEpartners

Othernon-

controllinginterest Total

Balance 30 June 2010 (audited) – 43 1 820 (90) (171) 1 602 670 13 2 285

Profit for the period – – 146 – – 146 – 1 147

Other comprehensive loss for the period – (1) – – – (1) – – (1)

Payment to non-controlling interests – – – – – – – (8) (8)

Dividends paid – – (57) – – (57) – – (57)

Share-based payments – 2 – – – 2 – – 2

Sale of incentive shares – – – – 20 20 – – 20

Consolidation of BEE SPVs – (120) – – – (120) (670) – (790)

BEE partners share to NDR – 13 (13) – – – – – –

Balance 31 December 2010 (unaudited) – (63) 1 896 (90) (151) 1 592 – 6 1 598

Profit for the period – – 44 – – 44 – – 44

Other comprehensive income for the period – 16 – – – 16 – – 16

Payment to non-controlling interests – – – – – – – (2) (2)

Dividends paid – – (80) – – (80) – – (80)



Transaction with non-controlling interests – – (23) – – (23) – – (23)

BEE partners share to NDR – (21) 21 – – – – – –

Balance 30 June 2011 (audited) – (64) 1 858 (90) (133) 1 571 – 4 1 575

Profit for the period – – 133 – – 133 – 1 134

Other comprehensive income for the period – 31 – – – 31 – – 31

Payment to non-controlling interests – – – – – – – 0 0

Dividends paid – – (10) – – (10) – – (10)



Transfer of Group shares – – – 4 (4) – – – –

BEE partners share to NDR – 9 (9) – – – – – –

Balance 31 December 2011 (unaudited) – (22) 1 972 (86) (130) 1 734 – 5 1 739


page 12


Declaration of cash dividend

Notice is hereby given that the directors of AFGRI have declared an interim cash dividend of 18,45 cents per share for the six months ended 31 December 2011. In accordance with settlement procedures of STRATE, the following dates will apply to the interim dividend:

Last day to trade cum the dividend Thursday, 15 March 2012Trading ex dividend commences Friday, 16 March 2012Record date Friday, 23 March 2012Dividend payment date Monday, 26 March 2012

There will be no dematerialisation or rematerialisation of AFGRI shares between Friday, 16 March 2012 and Friday, 23 March 2012, both dates inclusive.

By order of the Board

M ShikwinyaGroup Company Secretary Centurion

page 13


Notes to the condensed consolidated interim financial statements

1. Basis of preparation and accounting policiesThese condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) IAS 34 under the historical cost convention, as modified by the revaluation of available-for-sale financial assets and financial liabilities (including derivative financial instruments) and biological assets at fair value through profit or loss, the Listings Requirements of the JSE Limited (JSE) and the South African Companies Act (Act 71 of 2008) as amended, on a basis consistent with that of the prior period.

2. Finance costs

(R’millions)

Six months ended

31 December2011

Six monthsended

31 December2010

Interest paid on bank borrowings used to finance trade receivables (110) (105)

Other interest paid to financial institutions (91) (100)

Finance cost – continuing operations (201) (205)

Less: Borrowing costs capitalised on qualifying assets 1 –

Finance cost – continuing operations (income statement) (200) (205)

Finance cost – discontinued operations – (2)

Finance cost – total (200) (207)

3. Reconciliation of headline earnings per share

Earnings 39,7 44,4

(Profit)/loss on disposal of assets (2,8) 0,2

Headline earnings 36,9 44,6

Diluted headline earnings 34,5 41,2

4. Business segment resultsThe pre-tax segment results are presented without taking into account any headline earnings adjustments and before the allocation of any minority share of profits. Operating profits after finance costs are shown after a charge for internal interest based on each operating unit’s net assets throughout the period. With the exception of the acquisition of the yellow maize milling business of Pride Milling (included under the renamed Oil, Milling and Protein division), no other significant changes to the Group’s structure and operations have occurred during the period. The Group changed the way it allocates Head office expenses during the 2011 financial year. Only centralised costs are now distributed with corporate head office cost remaining in the Corporate segment. Comparatives have been restated to ensure comparability.

5. Trade receivables financed by banks and related liabilityThe only security for the liability is the trade receivables themselves, and in certain cases, additional cash collateral deposits or cash trade receivables of between 10% and 15% of the facility. The Group carries the risk of loss on these trade receivables.

page 14


Notes to the condensed consolidated interim financial statements continued

6. Agency agreementsThe Group manages Agri debtors on behalf of third party financial institutions to the amount of R3 532 million (2010: R1 546 million). Administration and management fees are paid by these third parties to the Group for services rendered in accordance with the service level agreements.

On 1 December 2011 GroCapital Financial Services (Pty) Limited (a wholly owned subsidiary of AFGRI Operations Limited, “GroCapital”) sold its farmers lending debtors at book value to the Land and Agricultural Development Bank of South Africa (“Landbank”) for a purchase consideration of R1,57 billion. Part of this transaction is the origination of a Service Level Agreement under which GroCapital will manage, administer and service the farmer lending book on behalf of the Landbank. Under this agreement GroCapital is only liable for bad debts on a second loss basis. In accordance with IFRS, and as a result of the residual risk retained in the book sold, R12,0 million of the farmer debtors were not derecognised as part of the sale. A further R4,0 million guarantee provision was raised to accommodate the potential second loss in the book sold. Refer to the announcement on SENS on 5 December 2011 for further details regarding this transaction.

On all other service level agreements, the Group is liable for bad debts to a maximum of between 5% and 10% of the value of debtors administered.

The Group receives a fee for the handling, grading, storing and administration of commodities on behalf of third parties. The value of these commodities is R3 023 million (2010: R2 412 million) and are fully insured by the Group.

7. Business combinations

On 1 December 2011 the Group acquired the yellow grits and by-products milling business of Pride Milling Company (Pty) Limited, conducted at Ermelo, Kinross and Bethal, as a going concern. Purchase consideration amounted to R240 million, which includes contingent consideration of R20 million which will be payable on 30 November 2013 should certain profit targets be met. The initial accounting for this business combination in terms of IFRS 3 is incomplete as the purchase price allocation exercise is still to be finalised. The fair values of the assets and liabilities acquired were preliminarily determined as follows: property, plant and equipment of R98,5 million, inventory of R22,3 million, trade and other receivables of R76,8 million and trade and other payables of R83,2 million. Goodwill of R136,5 million arose as the difference between the fair value of purchase consideration and the fair value of the net assets acquired. The Group will revisit the assumptions and finalise the impact of IFRS 3 in the forthcoming year. Revenue of R29,7 million and a net profit of R0,3 million were included in the current period results.

8. Comparative figures

During the 2011 financial year certain costs, previously disclosed under operating expenses, have been disclosed as part of cost of sales. The prior year information has been reclassified to ensure comparability and a total amount of R25,5 million has been reclassified from other operating expenses to cost of sales for the six months ending 31 December 2010.

Interim results presentation

Growth the natural outcome

page 16


Agenda

2

The past six months

Operational overview

Financial overview

Prospects

Questions and answers

Interim results presentation29 February 2012

1 March 2012

page 17


Trading conditions

• Challenges for the period

• Grain Management

• Animal Protein

• General margin pressure in Foods segment

• Positive influences for the period

• Retail, Equipment and Australia

• Balance sheet strengthening

• Working capital

• Financial Services

• Procurement process (strategic sourcing)

• Cost control

4

Lower silo volumes+

Price and input cost pressure in Foods =

HEPS decline

Highlights

• Revenue

• HEPS (continuing operations)

• Interim dividend• Retain 2x dividend cover

• No discontinued operations

• Improved gearing

3

24.8%

(17.3) %

18.45 cps

page 18


Agri services segment

6

2 013 1 732 1 620

2 014

308 283 287 252

2008 2009 2010 2011

Revenue (R’m)Retail & Equipment Grain Management

6959

35

62

95114

132

106

2008 2009 2010 2011

Profit before tax (R’m)Retail & Equipment Grain Management

Retail and Equipment:• High maize price contributed to enhanced earnings• Improved retail conditions in Australia

Grain Management:• Significant volume reduction in silos

Operational overviewChris Venter

page 19


Agri services: Tractor sales

8

* Value of tractors sold only includes new tractors sold

Sales value of AFGRI tractors sold in South Africa:2011 (interim) R250 million2010 (interim) R174 million

2 2542 715

2 417

3 117

3 709

4 382

2 907

3 577

5 143

615814 609

863 7911 024

687 8211 130

191 240 182 309 302 426 237 2200

1 000

2 000

3 000

4 000

5 000

6 000

2003 2004 2005 2006 2007 2008 2009 2010 2011

National AFGRI area AFGRI sales

Current market share of 31% (27% - 2010)

513

AFGRI Africa

354


7

Retail & Equipment• High maize price and good rainfall brought recovery from second half

• Strong maize price boosted revenue

• Strong volume growth

• Margins maintained

• Farmers positive on agricultural sector

page 20



10

• Lower silo volumes

• Exports continued during the six months

• Successful move of Procurement arm of Trading into Grain Management

• Expanded Collateral Management footprint

• Plantings – (AFGRI area of operation):• 9% increase - maize

• 4% decrease - soya

• 24% decrease - sunflower

Grain Management

Grain Current year (ha) Prior year (ha)White maize 226 056 223 807 Yellow maize 408 851 358 220 Total maize 634 907 582 027 Sunflower 28 099 36 927 Soya beans 221 107 230 037 TOTAL HA 896 424 861 185


9

Africa

• John Deere dealership established in Zimbabwe and Zambia

• Tractor sales:• Zimbabwe – 25 (Aug – Dec 2011)

• One center in Zimbabwe• Cash sales

• Zambia – 134

• In process of negotiating an additional two John Deere agencies in Africa

• Supporting 24 farmers in Congo Brazzaville

page 21


AFGRI closing silo stocks (‘000)

12

Source: AFGRI

-

500 000

1 000 000

1 500 000

2 000 000

2 500 000

3 000 000

Dec-

03M

ar-0

4Ju

n-04

Sep-

04De

c-04

Mar

-05

Jun-

05Se

p-05

Dec-

05M

ar-0

6Ju

n-06

Sep-

06De

c-06

Mar

-07

Jun-

07Se

p-07

Dec-

07M

ar-0

8Ju

n-08

Sep-

08De

c-08

Mar

-09

Jun-

09Se

p-09

Dec-

09M

ar-1

0Ju

n-10

Sep-

10De

c-10

Mar

-11

Jun-

11Se

p-11

Dec-

11

December –

Drought conditions & low plantings

White and yellow maize plantings

11

1 73

7 00

0

1 48

9 00

0

1 71

9 70

0

1 41

8 30

0

1 59

0 20

0

500 000

700 000

900 000

1 100 000

1 300 000

1 500 000

1 700 000

1 900 000

2008 2009 2010 2011 2012

White maize: area planted (ha)

1 06

2 00

0

938

500

1 02

2 70

0

954

000

1 04

0 00

0

840 000

880 000

920 000

960 000

1 000 000

1 040 000

1 080 000

2008 2009 2010 2011 2012

Yellow maize: area planted (ha)

page 22


Import and export price parity

14

Source: SAFEX

500.00

900.00

1 300.00

1 700.00

2 100.00

2 500.00

2 900.00

3 300.00

3 700.00

2-Ja

n-08

1-Fe

b-08

2-M

ar-0

81-

Apr-0

81-

May

-08

31-M

ay-0

830

-Jun

-08

30-J

ul-0

829

-Aug

-08

28-S

ep-0

828

-Oct

-08

27-N

ov-0

827

-Dec

-08

26-J

an-0

925

-Feb

-09

27-M

ar-0

926

-Apr

-09

26-M

ay-0

925

-Jun

-09

25-J

ul-0

924

-Aug

-09

23-S

ep-0

923

-Oct

-09

22-N

ov-0

922

-Dec

-09

21-J

an-1

020

-Feb

-10

22-M

ar-1

021

-Apr

-10

21-M

ay-1

020

-Jun

-10

20-J

ul-1

019

-Aug

-10

18-S

ep-1

018

-Oct

-10

17-N

ov-1

017

-Dec

-10

16-J

an-1

115

-Feb

-11

17-M

ar-1

116

-Apr

-11

16-M

ay-1

115

-Jun

-11

15-J

ul-1

114

-Aug

-11

13-S

ep-1

113

-Oct

-11

12-N

ov-1

112

-Dec

-11

11-J

an-1

210

-Feb

-12

R/to

n

PRICES OF YELLOW MAIZE DELIVERED (RANDFONTEIN)

Import parity

SAFEX

Export parity

SAFEX, Jul ‘12

AFGRI closing silo stocks (‘000) Dec ‘10 – Dec ‘11

13

Source: AFGRI

Tons

1 928 000

2 748 000 2 605 000

2 259 000

1 967 000

1 668 000

1 463 000

1 207 000

932 000

686 000 573 000

705 000

1 308 000

1 838 000

1 691 000

1 460 000

1 231 000 1 090 000

915 000

-

500 000

1 000 000

1 500 000

2 000 000

2 500 000

3 000 000

Jun-

10

Jul-1

0

Aug-

10

Sep-

10

Oct

-10

Nov-

10

Dec-

10

Jan-

11

Feb-

11

Mar

-11

Apr-1

1

May

-11

Jun-

11

Jul-1

1

Aug-

11

Sep-

11

Oct

-11

Nov-

11

Dec-

11

Low closing stock levels resulted in R48 million shortfall in income

Key:Jun ‘10 – Jun ‘11Dec ‘10 – Dec’11

page 23


Yellow and white maize price

16

Year White maize Yellow maize

Average for the year

2008 1 830 1 8442009 1 537 1 4252010 1 201 1 2632011 1885 18952012 (Jan) 2738 2764 Source: JSE and SAGIS

R / t

on

90011001300150017001900210023002500270029003100

02/1

1/20

07

02/0

1/20

08

02/0

3/20

08

02/0

5/20

08

02/0

7/20

08

02/0

9/20

08

02/1

1/20

08

02/0

1/20

09

02/0

3/20

09

02/0

5/20

09

02/0

7/20

09

02/0

9/20

09

02/1

1/20

09

02/0

1/20

10

02/0

3/20

10

02/0

5/20

10

02/0

7/20

10

02/0

9/20

10

02/1

1/20

10

02/0

1/20

11

02/0

3/20

11

02/0

5/20

11

02/0

7/20

11

02/0

9/20

11

02/1

1/20

11

02/0

1/20

12

WMAZ YMAZ

Maize exports (total)

15

Source: SA Grain Information Service

‘000

tons

0

50

100

150

200

250

300

350

400

450

May

-10

Jun-

10

Jul-1

0

Aug-

10

Sep-

10

Oct

-10

Nov-

10

Dec-

10

Jan-

11

Feb-

11

Mar

-11

Apr-1

1

May

-11

Jun-

11

Jul-1

1

Aug-

11

Sep-

11

Oct

-11

Nov-

11

Dec-

11

page 24


Financial services segment

18

GroCapital

• Product diversification

• Focus on commodities in Africa reaping rewards

• Sale of corporate debtors book

• Enhancing structured finance and procurement business and mitigating risk with a logistics partner

1 315

817

1 208

-

200

400

600

800

1 000

1 200

1 400

2009 2010 2011

Corporate debtors book (R’m)

Source: AFGRI data


17

485

339

214 201

2008 2009 2010 2011

Revenue (R’m)Financial Services

27

7

3235

2008 2009 2010 2011

Profit before tax (R’m)Financial Services

GroCapital• Restructure in 2009 – demonstrates positive trend• Strategic direction well entrenched with proven results

AFGRI Capital• Position for fee income rather than interest income

page 25



20

AFGRI Capital

• AFGRI retains strong working relationship with clients

• Farmers experienced no negative effect or change in service level

• Marketing opportunity exists now that available capital funding is in place

How is AFGRI experiencing the relationship with the Land Bank?

Is AFGRI still of the opinion that this transaction was the correct one?


19

AFGRI Capital• Successful implementation of sale of debtors book

• Improve financial position and gearing

• Increase access to funding

• Opportunity to utilise capacity and infrastructure

• Change from interest income to fee income model

5 3894 864

3 965

2 886

0

1 000

2 000

3 000

4 000

5 000

6 000

2009 2010 2011 2012

Farm debtors under management (R’m)

Source: AFGRI data

Farm debtors under management(Land Bank and Wesbank)

page 26


22

• External market factors

• Increased raw material price - therefore increased margin

pressure

• Year - year increase of 33%

• NSV increased by 18%

• Imports continued at 39%

• Internal efficiency factors• Hubbard breed

• Impact of volume on unit costs

• Changes in Animal Protein• New appointments – Nick Wentzel and Izaak Breitenbach

• Focus on increased volume to reduce unit costs

• Appointed as YUM’s 3rd supplier

Animal Protein

Foods segment

AFGRI Board

Nick WentzelIndependent Non-Executive Director

AFGRI Poultry

Izaak BreitenbachMD

21

260 296 264 379

1 287 1 581

1 390

1 780

2008 2009 2010 2011

Revenue (R’m)Oil, Milling & Protein Animal Protein

13 1219

11

5568

83

33

2008 2009 2010 2011

Profit before tax (R’m)Oil, Milling & Protein Animal Protein

• Yellow maize milling integration• Margin pressure on Foods segment as a result of high raw material prices

Foods segment

page 27


24

Oil, Milling and Protein• One month inclusion of yellow maize milling business revenue

• Higher raw material price

• Margins remain under pressure

• Nedan expansion project progressing well

Foods segment

Impact of new crushing plants around South Africa?

Broiler pricing

23

Source: South African Poultry Association

10

11

12

13

14

15

16Ja

n-07

Mar

-07

May

-07

Jul-0

7Se

p-07

Nov-

07Ja

n-08

Mar

-08

May

-08

Jul-0

8Se

p-08

Nov-

08Ja

n-09

Mar

-09

May

-09

Jul-0

9Se

p-09

Nov-

09Ja

n-10

Mar

-10

May

-10

Jul-1

0Se

p-10

Nov-

10Ja

n-11

Mar

-11

May

-11

Jul-1

1Se

p-11

Nov-

11

Total sales realised of frozen broilers

R / k

g

page 28


26

• Income statement impact• Increase in interest paid : R 39 million• Increase in taxation : R 7 million• Increase in profit attributable to ordinary shareholders : R 9 million

• Balance sheet impact• Decrease in total equity : R 838 million• Decrease in net assets : R 838 million

Consolidation of BEE structure

Financial overviewJan van der Schyff

page 29


49%

4%

47%

Revenue - 31 December 2011

Agri ServicesFinancial ServicesFoods

50%

6%

44%

Revenue - 31 December 2010


Segmental overview

51%

27%

22%

Operating profit - 31 Decmber 2011


42%

27%

31%

Operating profit - 31 December 2010


28

27

DescriptionR’ million

6 months to31 Dec 2011

6 months to31 Dec 2010 Change

Total revenue 4 579 3 669 24.8%Cost of Sales (3 477) (2 578) (34,9)%Gross Profit 1 102 1 091 1,0%Net operating expenses (721) (657) (9,7)%Operating profit 381 434 (12,2)%Finance cost / associate profit (193) (205) (5,9)%Profit before taxation - continuing 188 229 (17.9)%Taxation (54) (70) 22.9%Profit for continuing operations 134 159 (15.7)%Discontinued operations - (12) (100)%Profit for the period 134 147 (8.8)%

Diluted weighted average number of shares in issue (‘m) 356.7 356.5 -Diluted EPS (cents) 37.1 40.9 (9.3)%Diluted HEPS (cents) 34.5 41.2 (16.3)%

Consolidated income statement

page 30


30

Agri Services – Retail & Equipment


6 months to 31 Dec 2011

6 months 31 Dec 2010

Change

Total revenue 2 014 1 620 24.3%

PBIT 85 54 57.4%

PBT 62 35 77.1%

Profit before interest margin

4.2% 3.3% 27.3%

2 014

1 620

62

35

30

35

40

45

50

55

60

65

0

500

1000

1500

2000

2500

2011 2010Revenue (R'm) PBT (R'm)

Business Results



6 months 31 Dec 2010

Change

Analysis of PBT

Normalised 44 35 25.7%

Sale of assets 18 0 -

Total 62 35 77.1%

Segmental overview

68%

14%

18%

PBT 2011


55%

11%

34%

PBT 2010


52%

27%

21%

PBIT - 2011


42%

27%

31%

PBIT - 2010


29

page 31


32

Agri Services – Grain Management




Change

Total revenue 252 287 (12.2)%

PBIT 124 142 (12.7)%

PBT 106 132 (19.7)%

Total tonnage received (million)

2.3 2.6 (11.5)%

Opening stock (million)

1.3 1.9 (31.6)%

Average storageperiod (months)

3.3 3.8 (13.2)%

• Notes• Low opening stock• Impact of volumes and storage period on HEPS (R48 million)• Offset by:

- Handling out- Trading- Grain sales

252

287

106

132

0

20

40

60

80

100

120

140

230

240

250

260

270

280

290


Business Results

31

Agri Services – Retail & Equipment



% Contribution


% Contribution

Revenue – Retail (Continuing**) 523 26% 391 24%Revenue – Mechanisation 627 31% 457 28%Revenue – Primary Inputs 123 6% 164 10%Revenue – Other services 518 26% 416 26%Revenue – Australia 223 11% 192 12%Total revenue 2 014 100% 1 620 100%PBT – Retail 16 26% 10 29%PBT – Mechanisation 23 37% 15 43%PBT – Primary Inputs 1 2% 3 9%PBT – Other services 24 39% 12 34%PBT – Australia (2) (4)% (5) (15)%Total profit before taxation* 62 100% 35 100%Net Profit – Retail 3.1% 2.6%Net Profit – Mechanisation 3.7% 3.3%Net Profit – Primary Inputs 0.8% 1.8%Net Profit – Other services 4.6% 2.9%Net Profit – Australia (0.9)% (2.6)%Net profit margin 3.1% 2.2%

* Other operating income (including capital profits), other services and Africa

page 32


Net interest calculation

34* - Included in other operating income ** - Included in other operating expenses




Finance cost: continuing (201) (205)Interest related to debtors finance 110 105Other interest paid: continuing (91) (100)Other interest paid: discontinued - (2)Other interest paid (91) (102)Dividend income* 3 3Interest received: Guarantee deposit* 3 13Interest received: Other** 12 12Net interest (73) (74)Interest effect of consolidation 39 40Interest: Other guarantee deposits** 3 4Net interest and dividends (31) (30)

33

Financial Services




Change

Total revenue 201 214 (6.1)%

PBIT 109 125 (12.8)%

PBT 35 32 9.4%

Loan book margin 2.7% 2.6% 3.8%

• Notes• Sale of debtors book• Cash collateral deposit releases• Fee income improved• Good capital profits• Reduction in OPEX

201

24135

32

30.53131.53232.53333.53434.53535.5

180

190

200

210

220

230

240

250


Business Results

page 33


36

Animal Protein




Change

Total revenue 1 780 1 390 28.1%

PBIT 67 120 (44.2)%

PBT 33 83 (60.2)%

• Notes• Animal Feeds

• Lower margins• Broilers

• Higher feed costs• Lower NSV• High cost per unit

1 780

1 390

33

83

0102030405060708090

0200400600800

100012001400160018002000


Business Results

Impact of debtors book sale

35

31 Dec 2010 31 Dec 2011DescriptionR’ million

Actuals Before

Actuals After

Debt 4 036 3 209Equity 1 598 1 739Debt: Equity ratio 2.53 1.85

• Before = Before sale of farming lending book• After = After sale of farming lending book

30 Jun 2011 30 Jun 2011 30 Jun 2011 30 Jun 2011Farmer lending

included

Farmer lending

excluded

Corporate lending

excluded

BEEstructure

completedDescriptionR’ million

Actual Pro-forma After

Pro-forma After

Pro-forma After

Debt 4 539 2 662 2 062 1 362Equity 1 575 1 575 1 575 2 275Debt: Equity ratio 2.88 1.69 1.31 0.60

page 34


38


6 Months toDec 2011

6 Months toDec 2010

Change%

AssetsNon-current assets 2 718 2 196 23.8%Property, plant and equipment 1 845 1 512 22.0%Goodwill 248 37 570.3%Other intangible assets 256 286 (10.5)%Investments in associates 48 36 33.3%Available-for-sale financial assets 41 42 (2.4)%Financial receivables 164 161 1.9%Deferred income tax assets 116 122 (4.9)%Current assets 4 310 5 656 (23.8)%Inventories 1 227 934 31.4%Biological assets 47 64 (26.6)%Trade and other receivables 630 509 23.8%Trade receivables financed by banks 1 895 3 290 (42.4)%Derivative financial instruments 44 64 (31.3)%Current income tax assets 22 2 1 000%Cash and cash equivalents and cash collateral deposits 445 793 (43.9)%Assets of disposal groups classified as held-for-sale 7 17 (58.8)%Total assets 7 035 7 869 (10.6)%

Balance sheet - assets

37

Oil, Milling and Protein




Change

Total revenue 379 264 43.6%

PBIT 20 22 (9.1)%

PBT 11 19 (42.1)%

• Notes• Lower volumes• Reduced margins• Offset by lower OPEX

379

264

11

19

02468101214161820

0

50

100

150

200

250

300

350

400


Business Results

page 35


40

Cash generated from ops

Working capital utilised

Taxation

Investments made

Finance activities

31 Dec 2011R’million

Movement in guarantee deposits

(103)(93)

1 528(2)

1 330

-139

-122

-12

-554

279

-600 -400 -200 - 200 400

31 Dec 2010R’million

Cash flow statement

287

-282

-27

-340

259

-400 -200 - 200 400

(548)(23)572

(554)(553)

Net movement in overdraft

Movement in debt to finance debtors

Movement in borrowings (incl short term)

Movement in net debt

39

Balance sheet - liabilities


6 Months toDec 2011

6 Months toDec 2010

Change%

Equity - Capital & reserves attributable to equity holders 1 734 1 592 8.9%Treasury shares (86) (90) 4.4%Incentive trust shares (130) (151) 13.9%Fair value and other reserves (22) (63) 65.1%Retained earnings 1 972 1 896 4.0%Non-controlling interest 5 6 (16.7)%Total equity 1 739 1 598 8.8%Liabilities - Non-current liabilities 770 1 016 (24.2)%Borrowings 572 832 (31.3)%Deferred income tax liabilities 183 184 (0.5)%Provisions for other liabilities and charges 15 - -Liabilities - Current liabilities 4 526 5 255 (13.9)%Trade and other payables 1 393 1 164 19.7%Derivative financial instruments 44 79 (44.3)%Current income tax liabilities 7 15 (53.3)%Call loans and bank overdrafts 1 187 674 76.1%Bank borrowings to finance trade receivables 1 895 3 323 (43.0)%Total liabilities 5 296 6 271 (15.5)%Total equities and liabilities 7 035 7 869 (10.6)%

page 36


ProspectsChris Venter

41


6 Months to31 Dec 2011

Agri Services 48Financial Services -Foods 57Corporate 6Total 111

Group capex and activities

page 37


AFGRI DNA with value added services

Retail

Production Grain Management Industrial Processing

Partrite

GroCap

Mechan-isation

Insurance Farmer Lending

LabWorld

Tobacco

44

AFGRI DNA

Production Grain Management Industrial Processing

Grain value chain will always remain embedded in the AFGRI DNA

43

page 38


Investment case

46

Food securitySustainable

Balance sheet restructured

Outstanding knowledge on

agricultural market place

Strategic assets with good market

share

Brand equityVision

People

Assets

Liquidity

Strategic operations being

strengthened

To be the leading agricultural

services and food company

If correct calibre is not in place -

replace

AFGRI main asset group has an

average RONA of 30% +

Debt:equityratio improved

to 1.69

AFGRI will continue to strive for a balance of growth through capex spend, acquisition and other organic growth

Strengthening exercise remains

focus

Value added services

Retail

Partrite

GroCap

Mechan-isation

Insurance Farmer Lending

LabWorld

TobaccoFocus on service delivery

and financial returns (RONA and ROE)

45

page 39


48

• Current external environment

• Price expected to remain strong

• Margin pressure on Poultry will remain

• Expect good crop in AFGRI area

Price expectation

White maize R1,800 – R2,600

Yellow maize R1,800 – R2,600

Wheat R2,700 – R3,100

Sunflower R4,100 – R4,700

Soybean R3,100 – R3,600

• Focus areas for the period ahead

• Counter empty silos

• Financial services will continue to grow

• Poultry expansion and efficiencies

• Sale of corporate debtors book

• Potential to take BEE funding off balance sheet

Prospects

Investment case

47

2009 - 2010 2011 2012 2014 onwards

Disposal and closure of non-core,

unprofitable divisions

Successful restructure of balance sheet

Strong operations and board

members appointed to assist in Foods

strategy development

2013

Purchase of Rossgro and Pride Milling to bolster Foods division

Consolidation of ongoing operations

Establish additional bunker and collateral

management sites

Focus on efficiencies in

Poultry

Increased capacity for DOC and

slaughter birds

Nedan expansion completed with

intention of doubling capacity

Benefit of Africa

Expansion of Milling

Daybreak abattoir extensions completed

Daybreak and Delmas abattoir

production to increase

Benefits across GP, parent, broiler and abattoir operations will improve

Implemented new SAP system - extraction of value continues with the benefit of the procurement initiative

Focus on increased ROE and value added services

Benefit of new Financial Services structure – fee income

Continue to expand Grain management footprint across Africa

Key:GroupAgri ServicesFinancial ServicesFoods

page 40


Thank you for your attendance and participation

www.afgri.co.za

For any further Investor Relations questions please contact:

Chris Venter (CEO) – 011 063 2001Vanessa Rech (Keyter Rech Investor Solutions) – 011 447 8656

Appendix

page 41


52

Debt / cash flow calculation

DescriptionR’ million 6 months ending Dec 2010 6 months ending Dec 2011

Jun 2010 Dec 2010 Movement Jun 2011 Dec 2011 MovementOverdraft (207) (674) (467) (951) (1 187) (236)Cash 475 394 (81) 258 391 133Net overdraft (excl guarantee deposits) 268 (280) (548) (693) (796) (103)Cash guarantee deposits 422 399 (23) 147 54 (93)Net overdraft 690 119 (571) (546) (742) (196)Short tem debt (105) 0 105 (10) 0 10Debt to finance debtors (3 895) (3 323) 572 (3 423) (1 895) 1 528Net short term debt (3 310) (3 204) 106 (3 979) (2 637) 1 342Long term borrowings (173) (832) (659) (560) (572) (12)Net debt (3 483) (4 036) (553) (4 539) (3 209) 1 330

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Loan book: margin calculation


6 Months toDec 2011

6 Months toDec 2010 Change

Total interest received 154 161 (4.3)%Total interest received 151 151 -Interest on cash guarantees 3 10 (70.0)%

Total interest paid (115) (110) 4.5%Total interest paid (110) (105) 4.7%

Other interest (paid) / received (5) (5) -Net interest 39 51 (23.5)%

Average debtors balances 2 886 3 965 (27.2)%

Loan book margin 2.7% 2.6% 3.8%

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www.afgri.co.za

AFGRI LimitedPO Box 11054

Centurion0046

Tel: +27 11 063 2347Fax: +27 87 942 5010

E-mail: [email protected]

AFGRI Operations LimitedPO Box 11054Centurion0046

Tel: +27 11 063 2347Fax: +27 87 942 5010E-mail: [email protected]

Economy & Finance

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