Financial Performance Review
Total revenue for the year ended 31 August 2022 was K5.111 billion, 2.4% above the prior year comparative, bolstered largely by a 5% growth in domestic sales volume. Export sales were down compared to previous year as priority was given to satisfying the domestic market in view of limited stocks and the Kwacha appreciation against the US dollar over the year resulting in lower realisations.
Operating profit for the year was K1.243 billion underpinned by the continued strong growth in domestic sales which is the primary market for the business. This was a strong financial performance which is similar to the previous year considering an 8% decrease in sales due to lower production, cost increases and supply chain disruptions triggered by global events and stripping out the effects of the weak Kwacha in 2021. After tax profit reduced marginally from K1.087 billion to K1.005 billion.
The year under review presented difficult trading conditions. Cost escalation was a key challenge in the business with cost increases mainly driven by the increase in key inputs such as fertiliser, packaging materials and fuel due to the impact of global events.
The strong technical performance, in both factory and fields, and focused working capital management resulted in strong cash generation which led to significantly reduced borrowings from K403 million at the beginning of the year to K42 million at year end. Consequently, the business has achieved zero gearing and is well positioned for further investment and growth.
Earnings per share for the year ended August 2022 decreased by 7.5% from 343.1 ngwee per share to 317.5 ngwee per share.
Dividend
The Board has proposed a final dividend of K299 million (FY 21 K269 million) which represents 94.4 ngweeper share (FY21 84.5 ngwee per share) to be considered for approval by shareholders at the Annual General Meeting scheduled for 24 November 2022.