Senwes cites drought for half-year turnover slide
By fstimes On 14 Dec, 2013 At 09:48 AM | Categorized As Business | With 0 Comments

Martin Makoni, Bloemfontein

LEADING agribusiness company Senwes says poor grain harvests in the central and western parts of the country over the past two years have had an impact on the company’s half-year results for the period ending October 31 this year.

In its latest financial results, Senwes said the entry into the local market by international soft commodity houses which mainly deal in commodities such as coffee, cocoa, sugar, maize, wheat, soybean and fruit had also affected their financial position as well.

Soft commodities are normally used by farmers wishing to lock in the future prices of their crops by commercial buyers and by speculative investors seeking a profit.

The Klerksdorp-based company said its net profit for the first six months of the 2014 financial year after tax declined to R174 million compared to R187 million realised in the same period last year.

Turnover also eased to R5.1 billion for the period under review compared to R5.9 billion from the same period last year.

The company said 40 percent of the grain volumes were lost due to the drought experienced over the past two seasons and stringent management internentions helped reduce the impact to a 29.5 percent decrease in the operating results for the first six months.

“Market share in the grain silo business recovered, despite an environment where robust participation is evident in a shrinking market,” Senwes said in a statement.

“The market experienced a doubling of entrants in the form of grain traders over the past 18 months and all international soft commodity trading houses accessed the South African market.”

The company however expressed concern at the declining confidence among farmers over the coming summer planting season as business has remained low in the inputs and mechanisation sector.

Senwes operations include grain storage and financial, technical and logistical services.

It also has operations in the North West, Free State, Gauteng and Western Cape provinces.

Senwes also has a regional footprint in Malawi, Zambia and Mozambique.

The company provides storage and handling services through a well-deployed silo infrastructure with a capacity of 4.6 million tons, more than 25 percent of the total South African commercial storage capacity.

Senwes silos handle approximately 18 percent of the country’s grain and oilseeds in a normal agricultural production year.

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