TIDMAGTA
RNS Number : 3822N
Agriterra Ltd
29 September 2021
29 September 2021
Agriterra Limited ('Agriterra' or the 'Company')
Agriterra Limited / Ticker: AGTA / Index: AIM / Sector:
Agriculture
Trading Update and 2021 Annual Accounts Timetable
Agriterra Limited, the AIM-quoted African agricultural company,
is pleased to provide the following
trading update and an update on its 2021 Annual Accounts
Timetable, together with selected unaudited 2021 financial
information:
Trading Update
The Company's operations were subject to several unanticipated
external factors which have affected performance during H2 2021 and
H1 2022. These include a significant strengthening of the Metical
against US dollars to USD1:MZN 55 from a forecast of USD1:MZN 75, a
third wave of COVID-19 in July 2021, delays to the local maize crop
as compared to prior year, and escalated conflicts in the north of
Mozambique.
The significant appreciation of the Metical against the USD
affected funding arrangements for the purchase of maize, as the
Metical equivalent to USD 6.1 million bank guaranteed funding was
significantly reduced and the Company was required to offer
additional collateral in the form of maize and property plant and
equipment to obtain an additional MZN 90 million from commercial
banks in Mozambique. Furthermore, the appreciation of the Metical
against the USD made imports cheaper, and thereby increased
competition for all the divisions of the Company.
The third wave of the COVID-19 significantly affected senior
managers and employees for more than a month, and the Company had
to implement aggressive COVID-19 preventive measures such as
working from home, strict temperature checking and monitoring of
social distancing. The Company successfully vaccinated all
employees above 40 years based on recommendation from the
Mozambique health authorities.
The Company's Grain, Beef and Snax sales have however been
encouraging during H1 2022 despite the challenges mentioned
above.
Grain Division Update:
The key drivers of the division's strategy for the current year
are:
-- Purchasing local maize early in the season to secure inventory at lower prices.
-- Drive volumes of higher margin products such as the 1kg meal bag in the informal sector.
As result of the appreciation of the metical against the USD,
the budgeted funds were not able to purchase the budgeted quantity
of maize and reduced our grain budgeted milling volumes from 40,000
tons to 30,000 tons. Nonetheless, on lower volumes, margins have
been improved and the division has more than 20,000 tons of maize
in inventory, sufficient for the remaining 6 months of the
year.
Beef Division Update:
Management is focussed on continuing to optimising the
efficiency of our beef operations. The appreciation of the Metical
has made imports of beef from South Africa cheaper and the conflict
in the north of Mozambique halted gas operations, which together
with COVID-19, have reduced demand for the Company's beef.
Snax division update
The Snax division commenced operations in the last quarter of
prior financial year. The division produces maize puff and maize
naks by baking maize grits. Demand for Snax is strong and the
division is already contributing to Group cash flow.
2021 Annual Accounts Timetable
The Company also announces that following the grant by AIM
Regulation of an extension to its 2021 annual reporting deadline
(further to guidance provided in "Inside AIM" released in January
2021), it now expects to report its 2021 Annual Results for the
year ended 31 March 2021 in October 2021. The delay in publishing
the 2021 Accounts is due to the impact of the COVID-19 lockdown in
Mozambique on the ability of the Company's auditors and other key
financial personnel to access all required information on a timely
basis.
Despite the logistical challenges presented by COVID-19, the
Company is pleased to confirm that the audit process is currently
being finalised.
The Company expects to report the following information, noting
that the figures presented for 31 March 2021 are currently
unaudited:
31 March 2021 (Unaudited) 31 March 2020 (Audited)
Revenue US$ 14,367,000 US$ 12,910,000
-------------------------- ------------------------
Net asset position US$ 13,018,000 US$ 1,216,000
-------------------------- ------------------------
Cash and cash equivalents US$ 254 000 US$ 1,034,000
-------------------------- ------------------------
Total debt US$ 6,425,000 US$ 5,383,000
-------------------------- ------------------------
An independent real estate appraiser was engaged to revalue land
and building as at 31 March 2021 and this resulted in the majority
of the increase in net assets to US$ 13,018,000 net of current year
financial performance.
Caroline Havers, Non-Executive Chair, commented: "We are not
alone in having been impacted by the significant events in
Mozambique and the rest of the world over the past six months.
However, our team have nonetheless demonstrated great tenacity in
maximising sales during H1 2022. We expect further ongoing
difficult trading conditions in H2 2022 but as a Company are well
positioned to come through this period in a strong position."
** ENDS **
The information contained within this announcement is considered
to be inside information prior to its release, as defined in
Article 7 of the Market Abuse Regulation No. 596/2014, and is
disclosed in accordance with the Company's obligations under
Article 17 of those Regulations.
For further information please visit www.agriterra-ltd.com or
contact:
Agriterra Limited Strand Hanson Limited
(Nominated & Financial Adviser and
Broker)
============================ ====================================
Caroline Havers James Spinney / Ritchie Balmer
caroline@agriterra-ltd.com +44 (0) 207 409 3494
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