DIVERSIFIED agro-industrial conglomerate Aico Africa Limited recorded a loss of $2,4 million, in the full year ended March this year, as earnings went on a downward trend in the period.
Report by Gamma Mudarikiri
Earnings in the period dipped 209% to a loss of $6,7 million attributed to the poor performance of the seed business, a loss recorded at the FMCG exacerbated by a free fall in international cotton prices.
The seed business suffered a 12% decline in volumes to 59 406 tonnes while the slow payment for goods by key customers, coupled with a high inventory level, escalated interest 73% to $7,4 million and consequently weighing down profits. The company’s division FMCG, despite improving revenue marginally to $2,4 million recorded a loss of $4,2 million.
Group revenue plunged 10% to 263,9 million attributed to softer linen prices, which on aggregate went down 45% compared to last year. The decline in in revenue is despite an 18% increase in group sales volumes to 213 720 tonnes.
The company’s operating costs jumped by a third to $73,4 million, as the company is servicing huge loan meant to recapitalise its operations. This resulted in the group’s operating profit plunging further by 37% to $24,2 million after accounting for impairment costs.
The decline is operating profit is partly attributed to high interest charges emanating from a huge loan facilities, as the company spruces up its efforts to increase working capital financing and cope with the late payment of trade receivables from the seed business. Capital expenditure in the period, however, dropped to $10,9 million down from $17,8 million recorded the previous year. Of this amount, $9,6 million was spent in the seed business, while the remainder $800 000 went to cotton.
The company said the fund raising and group restructuring initiatives announced last year are still being pursued, with negotiations with potential partners at an advanced stage.
The group expects a resurgent performance from the seed business driven by recovery of sales volumes in Zimbabwe.
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