Speaking at an analyst’s briefing last week, group chief executive Morgan Nzwere said sales volumes were up 63% compared to the previous period.
Overheads were 24% higher than prior year owing to increased investment in research and marketing activities, as well as an increase in provision for credit losses.
Bank borrowings doubled to US$45 million from US$22 million last year a position that is expected to unwind as selling commences in the second half of the year.
The group incurred finance charges of US$1 million as compared to the previous year’s charges of US$0,25 million due to carry over borrowings used to fund increased production.
“Interest rates for Zimbabwe stood at 13% on average, while rates on other regional operations are hovering around 5 to 7%,” said group finance director and company secretary John Matorofo, adding that costs went up 34% last year.
SeedCo said that inventories went up due to current maize seed intake adding that production has been financed by both internally generated funds and bank borrowings.
The company recorded a first in a decade after cotton seed volumes shot up to 3 400 metric tonnes against the nil recorded last year. Winter wheat cereals went up 44% to 5 441 metric tonnes while maize volumes went down by 4%.
The company’s major costs emanated from sales and marketing exercises as the company invested more in strengthening the brand to stimulate demand.
“Overall production is up by 71%, with more than adequate stock in all markets,” said Nzwere. He said the company would soon be scaling up production activities in Kenya, Ethiopia and Tanzania as demand for seed in these markets has surged.
The new business units for cotton seed and maize in Tanzania will begin contributing to group profits later this year, while the construction of the Zambia factory and office facilities are already complete.
Nzwere told stakeholders that the company’s strategic thrust is to replicate the cotton seed model currently being used in Zimbabwe in other markets.