The balance sheet performed well, despite a higher credit book, and the own capital ratio of 42% (2017: 36%) is well positioned within the set caveat guidelines of 35% - 45%.
The land debate, together with political uncertainty, impacted negatively on business confidence in the industry and investment and spending in the industry by producers slowed down significantly. Senwes did not escape this and the impact is clearly visible in respect of spending on agricultural equipment. Add to this a build-up of maize surpluses over the past two seasons and below averages pre-season rainfall, and it is evident that material challenges will have to be faced in the current season.
Positive cash flow of R152 million was generated from operating activities after the payment of a final dividend of R47 million for the 2018 financial year and the payment of finance costs to the amount of R99 million. Interest cover of 3,5 times is better than the previous year and comfortably within the funding caveats.
Other financial indicators compared to the corresponding period of the previous year:
EBITDA increased by 1,5%, from R330 million to R335 million.
The net asset value increased by 11,2% from R12,27 to R13,65 per share.
Dividend yield on average market price increased from 2,4% to 3,0%.
Return on opening equity decreased from 7,3% to 7,1% (not annualised).
The profit before tax of the different segments is as follows:
Market access increase by 2,0% from R152 million to R155 million.
Input supply increased by 41,2% from R17 million to R24 million.
Financial services increased by 23,9% from R67 million to R83.
Prospects
The second semester of the year will probably be more challenging due to the late pre-season rains as well as lower than expected capital spending.
Dividend declaration
An interim dividend of 30 cents (2017: 27 cents) per share was declared. The last trading day and the record date will be 12 December 2018. Dividends will be paid on 13 December 2018, net of dividend withholding tax where applicable.