The financial results of the Senwes Group reflect an 80% increase in turnover amounting to R3,517 billion (2019: R1,954 billion) while earnings before interest, depreciation and amortisation increased by 49%, from R343 million to R511 million. Cash flow generated from operating activities amounts to R440 million – 29,8% higher than the R339 million generated during the same period of the previous year. A profit attributable to normal equity holders of R281 million was delivered for the six months ending on 31 October 2020 – a 67,3% increase from the R168 million of the corresponding period of the previous year.
Impact of COVID-19
“The first six months of 2020 will always be remembered for the COVID-19 pandemic, but at Senwes Group level for the low carry-over stock levels, late plantings, excessive rain in April 2020 and the poor quality of grain as the season progressed. Despite this, the Senwes Group performed better than initially expected. The performance of the agricultural equipment business unit has improved since the previous year, with an increase in total turnover of 74% for the year to date. The larger crop, together with the significantly higher commodity prices, lower interest rates and good prospects for the coming season, had a positive impact on this market,” said Francois Strydom, chief executive officer of Senwes Group.
Other financial highlights are an interim dividend declaration of 32 cents per share (2019: 30c/share) while the net asset value of the group increased by 12,4% to R16,3 per share. Headline earnings per share of 164,1 cents were delivered in the first six months, which is 65% higher than the 99,7 cents per share for the corresponding period of the previous year.
Prospects for 2021
“Due to the unbundling of the retail business in partnership with Afgri, Hinterland, the consolidation with Suidwes, which should be finalised by January 2021 at the latest, as well as the faster than expected recovery of businesses in the portfolio after the relaxation of the COVID-19 measures, the momentum should continue for the next six months,” according to Strydom.
“Add to this a normal to above normal agricultural cycle for the summer grain areas, and the Senwes Group should deliver good results by 30 April 2021. However, it is foreseen that upward pressure on commodity prices and the availability of quality white maize products will increase during the last quarter of the financial year,” said Corné Kruger, Senwes Group chief financial officer. – Press release, Senwes