BUSINESS REVIEW
BUSINESS REVIEW
Review
The first six months of the 2018 financial year were characterised by
an all-time high record crop intake. Maize prices responded to the
increased volumes and traded down towards export parity. Turnover
decreased by 15,4% due to lower commodity prices.
A profit after tax of R144,9 million was delivered, which is 60,7%
higher than the previous year. Normalised headline earnings in-
creased to 97,8 cents per share, which is 81,5% higher than the
comparative period’s 53,9 cents per share.
Working capital is on a higher level than the previous year, mostly
due to high grain volumes. The own capital ratio was constantly
under pressure and focus was placed on balance sheet and cash
flow management. The ratio of 36% is lower than the previous year,
but still within the capital maintenance guidelines of 35% to 45%.
Positive cash flow of R303 million was generated from operating
activities, after the payment of final dividends of R43,5 million for
the 2017 financial year, as well as interest paid of R111,4 million.
Interest cover of 3,0 times is higher than the previous year’s 2,5 and
clears the set funding caveats by a significant margin.
Operational review
Market access
Senwes Grainlink, the grain storage and handling business, had
the highest grain intake since the previous record in 1981. It was
the highest yield per hectare planted in Senwes’ recorded history.
Senwes Grainlink repeatedly broke the record in respect of tonnages
received. Grain received increased by 220% from the previous sea-
son, despite the negative impact of very low carry-over stock from
the previous season. Silo Operations and Procurement maintained its
market share and even managed to increase market share in some
areas due to innovative products and services offered and the capital
investment programmes which were aimed at higher operational
efficiency and the addition of value for the customer.
Tradevantage, the commodity trading business, experienced a nor-
mal first six months. The record maize crop resulted in maize prices
declining to almost export parity levels. The market also offered
senwes interim results 31 october 2017
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