BUSINESS REVIEW CONTINUE
However, rain was received in excess and at the right time and,
contrary to all expectations, the second largest maize crop in
the history of South Africa was produced.
Senwes’ turnover increased by 5,5% to R5,3 billion and the
gross profit returned to R579 million from R499 million at the
end of October the previous year.
The balance sheet was turned much faster and return ratios
increased as a result. Cash flow of R294 million was generated
from operations and R23 million was ploughed back into capital
projects. The net asset value per share also increased from
R9,58 cents per share on 30 April 2014 to R10,06 cents per
share at the end of October 2014, even after the payment of
a final dividend of 22 cents per share during September 2014.
Review and future prospects of
business segments
Market access
Grain received through the silo network of Senwes increased
by 74,8%, despite the negative impact of low carry-over stock.
Soft commodity prices responded to the increased volumes
and crops were liquidated at an average of 25% lower than
the previous year.
However, prices did not remain at export parity levels for
long enough, which resulted in expected exports having
been halted in the process. The deceleration of the export
programme should, however, result in a positive impact on
silo income. A large national maize closing stock situation
is foreseen, which will give momentum to the business unit,
even in the 2nd semester of a financial year characterised by
lower profitability.
Input channel
The 2014-15 planting season is late and a lot of uncertainty
prevailed for a large portion of the first six months of the
Senwes financial year regarding new season plantings, given
relatively low commodity price levels and the late rain. Despite
this, turnover was 11,2% higher than the previous year and
gross profit improved by R29,7 million, which indicates that
Hinterland, the joint retail venture with Afgri, is in the process
of successfully rolling out its business model.
6
Senwes Interim Results October 2014