Integrated agricultural services company Senwes has posted a net profit after tax of R187m for the first six months representing an increase of 65.5% on the previous year's R113m.
The group said while it may not repeat the results of the first six months‚ it expected a reasonable performance in the second half. The turnover of R7.3bn is at the same level as the previous year. Headline earnings increased by 6.7% from 66.9 cents a share to 71.4 cents a share.
The net asset value increased from R7.57 to R8.44 a share since year-end‚ after the payment of a final dividend of 15 cents per share in September this year.
Last month the boards of Afgri and Senwes approved the conclusion of a contract in which a merger will take place involving the agricultural retail businesses of the two agricultural companies.
The deal would include Partrite‚ the Afgri wholesale subsidiary‚ to form a new joint venture in which both parties will hold a 50% interest. The deal is subject to approval by the Competition Commission. The joint venture would exclude the mechanisation businesses of the John Deere agencies.
The company said grain stock levels were still under pressure‚ and expected to have a negative impact on silo storage income. It said a better business base for the coming financial year was expected if grain prices continued to trade above export parity‚ which would result in higher carry-over stock levels than in April this year.
"We are expecting that the bullish run in respect of mechanisation will continue for the larger part of the remainder of the year," Senwes said in a statement.
"Good commodity prices and increased planting predict a positive year. However‚ exceptionally low or late rains could affect these predictions‚" the company said.
Senwes supplies production inputs and capital goods‚ mainly to grain producers. It also has financing and logistical services that offer financial and agricultural services to its customers. Its business is mainly focussed in the Free State‚ North West‚ Gauteng and Northern Cape‚ and parts of the Southern African Development Community.