SEEDCO records 10pc reduction in accounts receivable.

SEEDCO Group has recorded a 10 percent reduction in accounts receivable for the first quarter of 2016 due to Government business being done through financing structures and improved debt collection efforts.

According to Seedco Limited, by the end of first quarter of 2016, out of the US$42.2 million trade receivables, the governments of Zambia, Malawi and Botswana owed the group US$14 million for seed.

It, however, said that the amount was expected to be settled before the end of the first half of the year.

The analysis also showed that the inventory levels increased by 40 percent due to a combination of increased production and reduced seed uptake during the year owing to the drought effects of El Niño.

In terms of revenue collection, the group turnover was maintained despite a tough environment with the numerous factors affecting demand such as depressed commodity prices, weaker currencies and tight financial conditions.

The group said that the El Niño induced weather patterns across the region also contributed to the outcome of the revenue.

“Reduction of Government input programmes in all the markets the group operates in price adjustments in selected markets and the coming on board of the new vegetable seed business helped offset the effects of the reduction in maize seed volumes,” read the analysis in part.

The analysis further showed that finance income decreased by 16 percent due to reduction in short-term money market deposit interest rates.

Finance costs decreased by 39 percent due to access to cheaper facilities.

The group’s board had since recommended that a dividend of 2 cents per share be declared for the year ending 31st March, 2016, payable to shareholders in the register of the company as at 24th June, 2016.

On the outlook, the analysis showed that a steep decrease in commodity prices and the tough economic environment prevailing in sub-Saharan Africa was expected to continue in the outlook period.

It, however, further showed that the effects of El Niño on the food resources of the region, in the year just ended were expected to sustain seed demand in the coming season as families were expected to increase planting to restock.