Good results and increased capital expenditure

  • 27 June 2018
  • 7295
  •  Senwes
  •  press-release

Group Chief Executive Officer, Francois Strydom, said: “The group’s results recovered quickly, despite the challenges in the input channel. Headline earnings increased by 87% and a return on opening equity of 16% (2017 - 9%) was reflected. Our capital programmes which aimed to improved efficiency and service delivery at the silo, are delivering the required results. The project was 35% completed by 30 April 2018 and will be accelerated over the next three years”. 

A final dividend of 27 cents per share (2017: 25cents per share) was declared, subject to the approval of shareholders at the annual general meeting to be held on 22 August 2018.

Other key financial ratios:
  • Operating profit before interest and tax increased from R433m to R655m, while the operating margin to turnover increased from 4,2% to 6,9% in 2018.
  • Cash flow generated from operating activities amounted to R281m (2017 – R165m),even after an investment of R128m in operating capital.
  • Total dividends were increased by 20% from45 cents per share in 2017 to 54 cents per share (interim and proposed final dividend) for this financial year.
  • A dividend yield on opening market price of 5,2% (2017 - 4,3%) was reflected.

What does the future hold?
The new season stands on its own legs and the expected 12% lower plantings in hectares as well as a late season will result in lower volumes than the previous year. However, 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.

There are indications that the retail, credit and mechanisation business will experience a difficult time due to lower cash flow for producers. Add thereto the geo-political and economic environment and concomitant lower investment in agriculture, and the agri-sector can see a challenging year ahead.

Issued by:
Japie Fransman
083 253 4745

On behalf of:
Francois Strydom
Chief Executive Officer: Senwes Group

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