BUSINESS REVIEW
OPERATIONAL REVIEW
Market Access
12,1% from R155,0 million
R136,3 million
160
140
3
54
120
100
80
60
86
38
155
136
16
40
20
-
LOWER
CARRY IN
THE MARKET,
HIGHER
PREMIUMS
RESULTS
OCTOBER
2018
NET
DECREASE
IN GRAIN
ACTIVITIES
– SMALLER
AND LATER
CROP
PROVISION
FOR LOWER
GRADE
GRAIN
INCREASED
EFFICIENCY
IN STOCK
MANAGE-
MENT
OTHER
RESULTS
OCTOBER
2019
A smaller and later crop than the previous year, as well as lower car-
ry-over stock levels, resulted in a 14,3% lower income from the silo busi-
ness. In addition, higher premiums were paid in order to maintain market
share, a higher provision was made for the price difference in respect of
lower grade commodities and stock was rolled at low carry-costs for a
large part of the year in order to make provision for delivery contracts.
On the other hand, the silo upgrading programme emanating from the
investment of the previous years started to show results as a result of
the increased efficiency in respect of stock management, as well as the
optimisation of commodity prices in the cycle.
R41,7 million
Input Supply
73,6% from R24,0 million
50
45
40
35
30
25
20
15
10
5
-
2
21
19
7
7
42
24
RESULTS
OCTOBER
2018
KLK PROFIT
BEFORE TAX
AND NCI
NET DE-
CREASE IN
RETAIL AND
WHOLESALE
ACTIVITIES
FINANCE
STAALMEESTER
COSTS
RESULTS - NEW
LOWER NET
ACQUISITION
WORKING
CAPITAL
OTHER
RESULTS
OCTOBER
2019
The mechanisation business expanded its offer with the acquisition of
Staalmeester, which offers a good hedge with its low value/high volume
product range for the high value/low volume business of the John Deere
agency, which feels the impact when farming units are less profitable.
The portfolio was strengthened even further by the inclusion of the gain
from the acquisition of KLK Landbou, as well as the operating profit of
this group for the past two months. The joint retail and wholesale venture
with Afgri, Hinterland, is under pressure as a result of the late season
and the difficult economic conditions in the retail sector.
6
senwes interim results 31 october 2019