FUTURE PROSPECTS
Given the environment in which we operate and the current agricultural conditions , we are subject to several variable factors beyond management ’ s control . We anticipate that the current Covid-19 crisis may have the following financial impact on the 2021 financial year results :
Risk Factor
Impact %
HEPS cents / share
Certainty %
Increased outloading of grain due to higher consumption and exports |
21 % |
( 0,18 ) |
80 % |
Decline in carry-out grain closing inventory |
18 % |
( 0,15 ) |
65 % |
Decline in the equipment market size |
13 % |
( 0,11 ) |
20 % |
Interest rates negatively impacted on net interest-earning assets |
13 % |
( 0,11 ) |
90 % |
Decline in retail activities ( Hinterland and KLK ) |
9 % |
( 0,07 ) |
80 % |
Decline in fuel activities ( Hinterland and KLK ) |
7 % |
( 0,06 ) |
75 % |
Below average hectares planted |
7 % |
( 0,06 ) |
10 % |
Delay in commencement of the grain delivery season |
4 % |
( 0,03 ) |
100 % |
Decline in wholesale activities ( Hinterland ) |
4 % |
( 0,03 ) |
65 % |
Unexpected movements in rand / dollar exchange rate |
4 % |
( 0,03 ) |
50 % |
Fortunately , there are very high prospects for the coming grain harvesting season that will possibly counteract the impact of Covid-19 , as mentioned above . These prospects include , amongst others :
� A good summer grain harvest ;
� An increase in client profitability which will possibly result in a higher level of spending on equipment and capital goods ;
� An increase in clients ’ ability to repay their outstanding production and long-term debt ;
� A high level of business confidence in the coming planting season ;
� The restructuring and reorganisation of the group are currently in process ; and
� The implementation of the possible merger with Suidwes .
ACKNOWLEDGEMENTS
The Chairman and Chief Executive Officer acknowledged all stakeholders in their reports and I can merely confirm what they said .
All honour and glory to our Lord !
CF Kruger Chief Financial Officer
2 July 2020 Klerksdorp
80 ROOTED IN AGRICULTURE