Drier profit year for Agra

Jo-Maré Duddy – A loss of about N$3.8 million in Agra Ltd’s discontinued operations in South Africa contributed to the group’s profit for the year ended 31 July 2018 dropping by some 35.5% compared to its previous book-year.Agra Ltd, which trades over the counter at the Namibian Stock Exchange (NSX), recorded a profit of N$31.69 million for its past financial year, nearly N$17.5 million less than the same 12 months in 2017.Its discontinued operations in South Africa – Rosenthal Cape (Pty) Ltd and Inter-Arms (Pty) Ltd - suffered a loss of about N$3.8 million compared to a profit of around N$1.01 million the previous year. In its financials released on the NSX, Agra says it decided to discontinue its operations in the neighbouring country due to a lack of return on investment. An analysis of these operations shows that although revenue for the year under review increased by about 46% to nearly N$19.4 million, cost of sales skyrocketed by about 85.5% to around N$18.1 million.ChallengesCommenting on its latest results, Agra says local businesses have been faced with a downturn in the economy since early 2016. “The contraction in the economy had a severe impact on our retail and wholesale business in the year under review, despite the fact that we can report a positive growth in our market share in most of the categories,” the group says.Agra also singles out land reform and climate change as challenges the group had to face in its past financial year.“Uncertainty created by the land reform debate and concerns regarding farm safety also impacted negatively on agricultural producer spending, more specifically on farm inputs related to capital improvements,” Agra says.The group says global warming and climate change have resulted in severe drought conditions experienced mostly in the southern and western parts of Namibia since 2013. On the bright side, Agra says a correction in the producer price for cattle, coupled with an increase in market share had a very positive impact on the performance of its auctions division.FiguresThe group’s revenue of about N$1.55 billion for its past book-year grew by nearly 0.3% year on year. Cost of sales shrank by about 1% to nearly N$1.2 billion, leaving Agra with a gross profit of around N$356.1 million – up nearly 5.1% compared to 2017.Operating expenses rose by nearly 5.7% to about N$288.9 million. Agra’s operating profit came in at around N$76.3 million, an increase of nearly 4.7% compared to its previous book-year.The group’s earnings per share (EPS) and headline earnings per share (HEPS) for the past financial year both were 31.53c. Compared to the same 12 months in 2017, this is drop of nearly 34.4%.Total dividends of just over N$6 million were declared, nearly 1.7% less than the previous book-year.“In reaching our growth targets for 2018/19, we are largely dependent on the well-being of the farming sector. It is imperative that the country receives above average rains and that the current favourable producer prices is maintained, thus enabling the agricultural sector to recover,” Agra says.

Drier profit year for Agra

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Drier profit year for Agra

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