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Financial results with Francois Strydom
IN ORDER TO GET A REALISTIC PERSPECTIVE OF THE PAST FINANCIAL YEAR , IT CANNOT BE EVALUATED IN ISOLATION .
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AUBREY KRUGER
It is important to remember that , in our case , a financial year is actually the effect of two production seasons . On the market access side , it involves the crop of the previous production year while , on the input side , it relates to the current year ' s inputs . It is essential to include the results of the large crop being taken in at present , in the next year ' s financial results ..
LOOKING BACK AT THE PAST YEAR The past year was characterised by an extremely poor crop with concomitant low volumes . A mere 68 % of the normal hectares were planted , which also produced sub-optimally . This year ' s inputs and planting activities for the coming good crop were taken into account as well .
Although the current crop turned out well and plantings were higher and more normalised that the previous year , poor cash flow is still limiting the spending ability of customers . This means that they have to fight for every transaction and , in addition , margins are also under pressure .
REPORTING OF RESULTS We reflect the latest trends in terms of reporting the financial
AUG / SEP 2017 • SENWES Scenario
results . The performance of the different forms of capital includes financial , human , natural resources , manufacturing , intellectual and social responsibility capital .
Looking at these financial terms , we should actually have performed much worse than last year . However , we performed better due to good balance sheet management .
FINANCIAL CAPITAL The financial performance was as follows : Turnover increased by 7,6 % to R9,9 billion . EBITDA increased by 13,9 % to R474 million and a net profit of R167 million was reflected . Normalised headline earnings were higher - it increased to 108,4 cents per share . The total shareholder return improved by 8,1 %. A final dividend of 25 cents per share was declared . However , our own capital ratio declined from 40 % to 38 %.
The total business model was under pressure . The businesses which performed well were Grainlink , Equipment , Credit , Certisure and Grainovation .
Businesses under pressure are Tradevantage and Prodist , while Hinterland is improving , although
still under pressure . JDI expanded significantly and established new businesses , which now have to deliver the required results . The largest impact was the fact that customers were hesitant to expend capital , since they were under pressure .
HUMAN CAPITAL We have 5,3 % more personnel this year due to the expansions at Equipment and JDI . Given South Africa ' s unemployment figures , this is very important . In a year during which unemployment increased , we employed more people .
However , looking at employment costs , a moderate increase is evident . Our approach is to manage the business in such a way as to ensure that people have jobs . There is no point in the cost of employment increasing by 20 %, but half of the personnel complement has to be dismissed . Although our staff turnover is low , it is increasing in certain divisions , which could be problematic .