• Tue. Jul 16th, 2024

SeedCo Limited get board nod to list on VFEX

ByEconomic Times

Jan 19, 2023

By ETimes

SeedCo Limited, the country’s largest seed producer, says it has received approval from the board of directors to list on the Victoria Falls Stock Exchange (VFEX), a US dollar-denominated exchange that was launched in 2020.

This comes as more companies are opting to delist from the Zimbabwe Stock Exchange (ZSE) in favour of listing on the highly incentivised VFEX.

“Shareholders of Seed Co Limited (“the Company”) and the investing public are advised that the board has approved the migration of the company’s listing from the Zimbabwe Stock Exchange to the Victoria Falls Stock Exchange (“the Transaction”),” company secretary Tineyi Chatiza said in a cautionary statement.

It urged investors to use caution when transacting with the company’s securities.

“Further announcements will be made in accordance with regulatory requirements as and when there are material developments.”

Its sister company, Seed Co International, is already on the VFEX.

Axia Corporation and National Foods Holdings have also declared their intent to transfer to the new market.

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Experts say migrating to VFEX is likely to remain an attractive option, but will only be viable for a few companies with significant forex earnings or dominant market positions.

In order to encourage international investment into the country, the VFEX aims to provide a global platform for the trading of equities in foreign currencies. The exchange is also one of many programs the government has put in place to stabilize the economy and draw in much-needed foreign direct investment.

SeedCo Limited reported a $2.6 billion inflation adjusted after tax profit for its half-year ended 30 September 2022 from a loss of $7.4 billion in the 2021 comparative. The group incurred monetary losses of $8.1 billion, which were overcome by value gains stemming from US dollar denominated seed grower receivables.

Gross profits increased by 6% to $2.3 billion, with the margin remaining stable at 27% as the group continuously aligned its prices with inflation and exchange rate developments. However, the group noted inflationary pressures on its operating costs, with the operating expenses to revenue ratio increasing from 43% to 55%.

Revenue growth was subdued at 5% to $8.4 billion during the half-year. According to the group, winter sales were down by 8% due to the absence of repeat export sales while maize seed volumes declined by 45%. The decline in maize seed sales was attributed to delays in the rollout of government programmes and depressed demand due to the tight liquidity conditions.

Also read:  https://etimes.co.zw/index.php/2022/12/17/analysis-seedco-gears-up-for-agricultural-season-as-profits-rebound-to-zwl2-6bln/

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