business review
petition, silo operations managed to increase its market share and
the capital expenditure programmes, which are focused on better
efficiency and higher grain intake rates, are starting to yield results.
Tradevantage, Senwes’ grain marketing division, experienced a chal
lenging first six months and the uncertainty in the industry about
physical stock brings along a number of challenges relating to car
rying grain into the future, thereby ensuring delivery to the market
in future months.
This segment reflects a profit before tax of R57 million, which is
R41 million lower than the comparative period of the previous year.
These results outperform the lower volumes and higher margins can
be unlocked in the process.
INPUT SUPPLY AND EQUIPMENT
The results of the equipment division are better than expected, despite
lower spending in respect of agricultural equipment by the producer.
The better than expected results can be ascribed to a higher market
share in a smaller market, as well as the maintaining of sales margins.
The higher demand for used whole goods had a positive impact on
the results and resulted in stock remaining within reasonable levels.
Hinterland’s sales are under pressure and on lower levels than the
comparative period of the previous year. Due to low and late rainfall,
producers are hesitant to buy input products in advance. A number
of producers still have input products available from the previous
season as a result of the downscaling and this will be used first
before any further input purchases will be considered. The slow eco
nomic growth has a further negative impact on the retail business
and the management of slow-moving and obsolete stock remains
an area of focus for management.
Prodist, the wholesale business, reflected a 9,3% increase in turn
over despite the difficult economic conditions and further increased
its market in the agri-sector and other sectors.
The segment reflected a profit before tax of R31 million, which is a
24% increase against the comparative period of the previous year.
FINANCIAL SERVICES
Despite the drought and a strong decline in commodity prices since
the intake of the crop, outstanding 2016 summer production ac
counts amounted to only 7,4% by 31 October 2016, compared to
7,5% of the comparative period of the previous year. Senwes Credit
managed to reschedule the arrears of certain clients. Unfortunately
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senwes interim results 31 october 2016