Afgri soars despite tough market

Agricultural services business Afgri has seen a 65,5 % increase in their headline earnings for the year to February 2007. Managing director Jeff Wright announced that Afgri saw great results despite a challenging year for agriculture, in which maize planting dropped dramatically from the previous year. “The challenges of the last year brought out the best in our management team and the business performed extremely well,” said Wright. He said that an improvement on the last year was seen in every Afgri division except handling and storage, which was due to the fact that not much maize was produced, so the need for silos was minimal. In the primary inputs division, Afgri achieved a 22% increase in turnover and a 27% increase in turnover in the financial services division. This, as well as Afgri’s continued focus on the reduction of overheads and the improvement in supply chain efficiencies resulted in the business achieving a R160 million improvement in profit, said Wright. According to Wright, the highlights of the year included the fact that group earnings per share went up by 45,4 %, as well as the fact that net cash generated from operating activities was R537 million. Afgri also acquired the Daybreak broiler business, and disposed of the under-performing cotton ginning business. Afgri’s international businesses, situated in Western Australia and Zambia, had a difficult year. Western Australia recorded its worst drought in history. But Wright says that despite these challenges, Afgri’s businesses traded profitably. Wright says the current year will be a challenging one for Afgri in light of the poor rains across the country. But he says the focus of the business will be on more efficient procurement and improved management of supply chain logistics to alleviate the effects of a higher maize price on those parts of the business that are sensitive to the increasing price. – Gwenda van Zyl