SATISFIED: Arnold Klein, Agra’s Chief Executive Officer.__Photo: Zorena Jantze
GROWTH for primary industries has been a challenge for Namibia.
With declining commodity prices globally, and weakening grazing conditions, the agricultural sector contracted by 1.1% in the second quarter of 2018, compared to an 21.2% increase in the second quarter of 2017.
Despite these tough conditions, Agra Limited, one of Namibia’s leading agricultural industry players delivered stable results for their financial year report for July 2018 – increasing their revenue slightly by 0.3% from N$1,547 million to N$1,551 million in 2017/18.
The board of directors, however, declared a dividend of N$6.0 million for 2017/18, compared to N$6.1 million for the 2017/16 financial year.
Speaking at the announcing of the results, Arnold Klein, Agra’s Chief Executive Officer, stated that the Auction division had a record year with an increase in revenue of 40.7%, while revenue of the Retail and Whole divisions decreased with 2.1% for the year under review.
Klein stated that while retail outlets were severely hit by the recessive economic environment, there were more exports this year with the number of auctioned animals increasing from 319 329 to 341 236. He added that while the average price for cattle increased, game decreased.
The gross profit for the group increased from N$339 million to N$356 million in 2017/18, recording an increase of 5.1%.
The operating expenses for the group increased from N$273 million to N$289 million in 2017/18, an increase of 5.9%.
The finance cost of the group increased from N$29.0million in 2016/17 to N$30.5 million in 2017/18, an increase of 5.1%. Klein stated that the increase is a result of the bank overdraft throughout the year under review.
The total comprehensive income for the Group amounted to N$32.2 million for the year under review, compared to N$50.5 million in 2016/17, a decline of N$18.3 million. The gross turnover increased from N$921.5 million in 2016/18, which is a significant increase of 40.5%. Net turnover (commission received) achieved for the Agra Auctions division amounts to N$73.6 million, compared to N$52.3 million in 2017 – showing an increase of 40.7%.
The main contributors to this extraordinary performance were the increase in the price of weaners, with tollies achieving an average price for the year of N$33.01/kg and heifers N$31.51/kg at the auctions, compared to the respective prices of N$24.27/kg and N$22.12/kg of the previous year.
The higher prices together with the lack of grazing led to an increase in the number of heads marketed, which increased from 134.7 thousand in 2017 to 156.5 thousand in 2018 an increase of 16.2%. It also became evident that some ox producers chose to rather sell their weaner at these lucrative prices, instead of holding them back to market at a later stage as slaughter cattle.
These factors resulted in an increase in gross turnover for cattle from N$745.8 million in 2016/17 to N$1,103.5 million in 2017/18 – showing an increase of 48%.