Poor economy erodes share values – Zeder

Invsestment holding company Zeder has posted strong financial results for the six months ending 31 August, with all its investee companies, apart from Agrivision Africa, managing to stabilise the lower levels of profitability reported in the previous interim period. The lower profitability was primarily due to the impact of the drought, according to Zeder’s interim financial results.

Recurring headline earnings per share increased 158% to 9,8c, while HEPS increased 605% to 30,3c.

The sum-of-the-parts value per share, however, decreased 15% to R6,67 on 31 August, while the value of its underlying portfolio decreased from R14,2 billion on 28 February to R12,5 billion on 31 August. Zeder’s 27% stake in Pioneer Foods, the company’s largest investment, representing 49,1% of its portfolio, declined from R7,7 billion at the end of February to R5,4 billion.

Norman Celliers, CEO of Zeder, blamed the poor economic climate for the decrease in the share value. “Investors are flooded with negative publicity, ranging from corruption to crime and talks about land expropriation without compensation, which is creating a lot of uncertainty. The majority of companies have been negatively affected by the poor economic outlook, not just [Zeder], and

I am proud of what we have achieved in this environment.”

The company currently owes R1,5 billion in debt, which will be eased in the months ahead following the recent sale of Capespan’s shareholding in Chinese fruit marking business, Joy Wing Mau, for almost

R1,2 billion. Funds from the sale will be reinvested in Capespan and in dividends, according to Celliers. – Glenneis Kriel