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We continue to make the tough decisions necessary to protect and enhance the resilience and sustainability of our business .
Locally , the current increase in soybean production bears good news for South Africa and I expect that producers will invest even more in soybean production the coming season , especially due to lower input costs and higher soil moisture levels than required for the production of maize . Similarly , the expectation is that South Africa will produce more wheat , making the country less dependent on wheat imports . All in all , the country is now self-sufficient in terms of maize , soybeans and sunflower .
The past financial year saw the completion of the integration between Senwes and Suidwes Holdings ( Suidwes ) and the results thereof can be seen both in Senwes ’ financial and operational performance . In this regard I wish to extend a word of sincere appreciation to Francois Strydom and his management team for exemplary strategic guidance throughout the process . During the course of the next few years , the group will reap the benefits of the lower cost structure and the larger geographical footprint brought about by the acquisition of Suidwes .
At the time of expansion , Senwes ’ own capital ratio was above 35 %. The board ‘ s target remains between 35 % and 45 %. Senwes maintains a good dividend yield , with a 34 cents per share ( final dividend ) and 56 cents per share ( special dividend ) being recommended .
Agribel Holdings owns 73,5 % of the shares in Senwes . This impacts the free float of the Senwes share trading and liquidity levels remain low . R52 million worth of shares were repurchased during the year under review which provided value unlocking opportunities to shareholders . The net asset value ( NAV ) increased to R19,48 per share and shares are currently trading on the OTC platform at a significant discount to NAV . Agribel , being the control structure , has disadvantages , but it protected the company in times of instability and volatility . Agribel plays a strategic role in enabling consolidation in the agricultural commercial sector and accordingly this compensates for the low liquidity and difference between the net asset value and the market price of the Senwes share .
Senwes ’ balance sheet is deeply invested in the rural areas and therefore it is important for the group to contribute towards the sustainability and future expansion of rural South Africa . In light of South Africa ’ s massive infrastructure decline , Senwes is taking up the baton and is investing in interventions to help address the challenges posed by deteriorating road infrastructure . The acquisition of two John Deere graders , through a collaborative effort between Senwes Equipment and Senwes Grainlink , enabled the group to proactively improve roads connecting producers and the marketplace .
Other initiatives aimed at addressing the country ’ s challenges include supporting organised agricultural bodies such as the agricultural business chamber , Agbiz . Agbiz , with Francois Strydom as chairperson , advocates for and facilitates a favourable agribusiness environment for its members to perform competitively and sustainably . By influencing the policy and legislative environment insofar as it affects agricultural activities , Agbiz drives the resolution and addressing of issues such as Covid-19 , the socio-political unrest in KwaZulu-Natal and Gauteng and the most recent excessive rainfall in the south eastern parts of the country , through interaction with government institutions . This interaction contributed , amongst others , to the changes in the government policy that allows for power generating units larger than 100MW to be set up .
In his State of the Nation address , president Cyril Ramaphosa confirmed that the agricultural sector relies heavily on efficient , well-run ports , railways and border crossings to export its agricultural products and in this regard much has to be done to rectify the situation of overall deterioration . A step in the right direction is private sector partnerships and negotiations , that allow for border posts to be open for longer and to speed up the turnaround times of heavy vehicles at these posts , especially with regards to the Maputo Corridor .
As we bid farewell to our retiring directors , Simon Mohapi and Frans Marx , at the annual general meeting in August 2021 , I want to extend my sincerest gratitude to them for their years of service and commitment to always act in the best interest of the group .
With this said , I wish to thank my fellow board members for their guidance and the unrestrained contributions of their time and advice . To the executive management teams across the group , thank you for your efforts and continued focus during the past year . Your contributions are noted . I also applaud each one of our employees who continued to champion service excellence during the past financial year . We look ahead with a sense of optimism and hope .
I wish to end my report by thanking our Heavenly Father , who holds His hand over Senwes and its stakeholders every day . May we live each day according to His will .
JDM Minnaar Chairman 6 July 2022 Klerksdorp
SENWES INTEGRATED REPORT 2022
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