Senwes in giant profit leap since 2017 listing

AGRICULTURAL group Senwes yesterday reported a 86 percent surge in profits for the 2017/18 financial year on the back of a large maize crop last year. The group, which listed on ZAR X last year, saw its profits for the period jump from R167 million to R311m.

Senwes results for the period reflected headline earnings increased by 87 percent and a return on opening equity of 16 percent, compared to 9 percent in the previous period.

The company’s operating profit before interest and tax increased from R433m to R655m, while the operating margin to turnover increased from 4.2 percent to 6.9 percent in 2018. The group declared a final dividend of 27 cents a share, subject to the approval of shareholders at the annual general meeting to be held in August.

Senwes chief executive Francois Strydom said that the group handled and stored during its 2017/18 financial year the largest maize crop ever produced in South Africa.

“Our capital programmes, which aimed to improve efficiency and service delivery at the silo, are delivering the required results,” Strydom said.

“Phase one of this project has been completed at the end of the previous financial year, with the second to be phased in in the new financial year.”

Senwes is one of South Africa’s largest integrated agri-businesses and one of the world’s largest providers of white maize to the market. Its grain storage capacity stretches across 60 silo complexes and allows storage of 25 percent of grain produced in the country.

The 108-year-old company focuses on input supply, financial and equipment and precision farming services, and market access.

The group has business units in the North West, Free State, Gauteng, Mpumalanga, KwaZulu-Natal, Eastern Cape, Northern Cape and Western Cape and has a personnel complement of 2 997 people.

Strydom said there were indications that the retail, credit and mechanisation business would experience a difficult time, due to lower cash flow for producers.

“The previous season gave a lot of momentum, and higher carry-over stock volumes should ensure good handling and storage income for the immediate future,” Strydom said.

“The geopolitical and economic environment and concomitant lower investment in agriculture, and the agri-sector can see a challenging year ahead,” he said.