The integrated agricultural services business increased its profit after tax last year by 21.6% to R265m compared to R219m last year‚ while a return on equity of 21.5% was achieved.
Francois Strydom‚ Senwes MD‚ said competition had increased exceptionally in this sector‚ which was being targeted by investors as a last refuge for a global economy that was actively trying to escape a lasting recession.
As a result‚ Senwes was positioning itself strategically between the producer and end user‚ combined with an inevitable increased participation in the grain value chain.
The headline earnings for the period under review increased by 14.3% from 116.2c/share to 132.8c/share. Strydom added that in spite of higher commodity prices‚ the business generated R508m in cash from operating activities‚ and the own capital ratio of 41% was still within the capital-maintenance guidelines of 35%-45%.
The net asset value increased from R6.80/share (April 2011) to R7.57/share (April 2012) after a dividend of 70c/share had been paid.
Senwes Village was the highest contributor recording an increase in operating profit of 160% to R169m before tax compared to the previous year's R65m. "The division experienced a good year‚ with above-average sales in respect of mechanisation and input products‚" the company said.
It added that favourable grain prices in the second half of the year led to higher plantings and enabled a number of producers to upgrade mechanisation equipment. "This led to the second highest volume of whole-implement unit sales since 1997‚" it said.
Senwes Grainlink contributed R183m to the group's operating profit. The company said the high stock levels of 2011 caused price levels to trade below export parity. South African maize was purchased by the international market and 2.4 million tons of maize was consequently exported during the marketing year. A considerable quantity of grain was handled‚ but because of the fluidity‚ at least 43.5% less grain was stored‚ which resulted in pressure on storage income.
Senwes Credit and Univision contributed only 2% to operating profit amounting to R55m compared to last year. The demand for credit was stimulated by a 10% increase in hectares planted‚ as well as a 16% increase in input cost. There was growth of 15% in the production book on a year-on-year basis that revealed an expansion in market share‚ which was confirmed by the number of producers served and the hectares financed. "The credit book is basically sound and the total arrears of summer grain production at April 30 2012 amounted to 3.8%‚" Strydom said.
Univision Financial Services reported a 15% growth in turnover for the 2012 financial year. Univision's net operating profit after interest showed a 4.7% increase over the 2011 fiscal year.
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