South Africa's Afgri Ltd. reported a 18% increase in annual earnings largely due to a bumper maize harvest. It also said a further deterioration of the economy may affect its businesses.
South Africa is currently stranded in its first recession in 17 years, and the agricultural services group said it was concerned that this may affect its earnings prospects.
A strong agricultural year in South Africa led to JSE-listed agricultural (agri) services group increasing its net profit for the year ended June 30, 2009, to R354-million (€31.9 million), up 18% on the R299-million (€ 27m) in net profit achieved in the 16 months ended June 2008.
Afgri said earnings attributable to shareholders grew by 5% to 233 million rand (€21 million).
The company said it had faced difficult global economic conditions in the financial year to the end of June, which negatively impacted on its lending unit's margins, and limited the planned growth in its debtors' book.
But this was countered by a strong agricultural year in South Africa, which harvested a bumper crop of 12.7 million tonnes for the 2007/08 season -- its highest crop in 13 years.
Meanwhile, the group stated that its Afgri foods division had continued to perform above expectations.
Feed division flat results
Revenues at the animal feeds business had remained flat, despite a 3% drop in volumes.
The Daybreak Farms operation had been returned to profitability, a situation that was expected to continue now that its processing facility had been matched to its production capacity of 650,000 birds a week.
Afgri said it also benefited by getting out of some underperforming businesses and tighter cost controls.
The group said its financial services division has now seen off the worst of the global credit crunch, which had constrained the growth of its debtor's book.
All financial figures can be viewed here.
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