Seed Co pins hopes on surging local US$ sales

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By Alois Vinga

REGIONAL seed producer, Seed Co International Limited (SCIL) is optimistic that local US$ will continue to surge during the year in a development that will boost the company’s foreign currency position.

Most local companies are relying on local sales as well as exports to augment supplies from sources like the Foreign Exchange Auction and the Interbank Market as internal foreign currency generation strategies to meet productivity needs.

Presenting a trading update for the third quarter ended December 31 2022, Seed Co company secretary, Tineyi Chatiza expressed optimism on increased US$ sales going into the year.

“In Zimbabwe the business is expected to experience volume growth as well as a notable increase in the contribution of hard currency revenue from encouraging export growth and a significant increase in domestic sales in US$.

“On a regional level, a mixed volume performance is predicted, with growth forecast in some regions of Southern Africa and East Africa and a drop due to drought in other regions of East Africa,” he said.

During the period, the group noted that on a positive note, value was maintained in real terms during the business’s peak period of revenue generation because of the stability of the exchange rate and the increase in hard currency sales in Zimbabwe.

Volume at the company increased by 14% over the past nine months compared to the same period prior year, and by 46% compared to the same quarter prior year, helped by ample stocks, exports, record local sales of wheat and soybeans as well as favourable rainfall projections towards the start of the main planting season.

In terms of financial performance, volume growth and the evolution of the ZWL/USD exchange rates, revenue increased by 425% during the 9 months compared to same period prior year, and by 516% during the quarter compared to same quarter prior year in historical cost terms.

When adjusted for inflation, revenue increased by 12% compared to the same nine months’ period prior year, and by 14% compared to the same quarter prior year reflecting the volume rise.

“The board and management are still dedicated to protecting and enhancing stakeholder value along the entire value chain of the Group in Zimbabwe and in the region, added Chatiza.