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The Cotton Company of Zimbabwe presented results for the year ended March 2005. Key highlights included revenues increasing 317% due to consolidating SeedCo and higher sales volumes, but gross profits fell to 37% from 55% the prior year due to a 350% increase in the producer price and inflation. Operating expenses rose 493% and net finance costs were $206 billion due to increased seed cotton purchases, delays accessing offshore lines of credit, and high interest rates. The outlook was positive due to a new cotton support price and access to lower-cost funding.
The Cotton Company of Zimbabwe presented results for the year ended March 2005. Key highlights included revenues increasing 317% due to consolidating SeedCo and higher sales volumes, but gross profits fell to 37% from 55% the prior year due to a 350% increase in the producer price and inflation. Operating expenses rose 493% and net finance costs were $206 billion due to increased seed cotton purchases, delays accessing offshore lines of credit, and high interest rates. The outlook was positive due to a new cotton support price and access to lower-cost funding.
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The Cotton Company of Zimbabwe presented results for the year ended March 2005. Key highlights included revenues increasing 317% due to consolidating SeedCo and higher sales volumes, but gross profits fell to 37% from 55% the prior year due to a 350% increase in the producer price and inflation. Operating expenses rose 493% and net finance costs were $206 billion due to increased seed cotton purchases, delays accessing offshore lines of credit, and high interest rates. The outlook was positive due to a new cotton support price and access to lower-cost funding.
Hak Cipta:
Attribution Non-Commercial (BY-NC)
Format Tersedia
Unduh sebagai PPT, PDF, TXT atau baca online dari Scribd
Presentation Results for the year ended 31 March 2005
The Cotton Company
PROGRAMME OUTLINE 1.Overview of full year performance 2.Financial Highlights (Historical Cost) 3.Detailed Financial Review Turnover Cost of Sales Operating Expenses Finance costs Balance Sheet Cashflow
The Cotton Company
PROGRAMME OUTLINE (CONT) 5.Outlook 6. Questions
The Cotton Company
OVERVIEW OF THE FULL YEAR Cautionary Announcement Issued in April 2005 Performance below expectation High cost of financing highlighted Static exchange rate and high domestic inflation Financial impact to be covered in more detail
The Cotton Company
OVERVIEW OF THE FULL YEAR (CONT) Operations 195 000 t of seed cotton purchased 76% capacity utilization achieved Ginning completed by October 2004 Demand for planting seed met Market share maintained despite increase in number of competitors Operation in Uganda to be discontinued Operation in Mozambique being closely monitored
The Cotton Company
OVERVIEW OF THE FULL YEAR (CONT) Operations (Cont) Scottco and Quton Seed Co performed to expectation
The Cotton Company
OVERVIEW OF THE FULL YEAR (CONT) Industry Regulation Gvt response still being awaited Monetary authorities also keen to see order restored within the cotton sub-sector Prospects look bright
The Cotton Company
OVERVIEW OF THE FULL YEAR (CONT) Inputs Credit Scheme Further streamlined $44bn disbursed Vs $52bn in prior year Recovery in money terms 97% High financing cost a challenge National inputs scheme the answer
The Cotton Company
OVERVIEW OF THE FULL YEAR (CONT) Investments Stake in SeedCo now 40% up from 34.75% SeedCos contributed $73bn to PBT Prospects look bright Outlook To be covered after financials have been presented
The Cotton Company
DETAILED FINANCIAL REVIEW Turnover ^ 317 % Consolidation of SeedCo Increased Sales Volumes ( Lint & Ginned seed ) Improvement in lint prices COS ^ 503 % SeedCo consolidated Increase in producer price of 350% Seed cotton volume higher Sales volumes higher Inflationary pressure on other operating costs
The Cotton Company
DETAILED FINANCIAL REVIEW GP @ 37 % down from 55 % last year Increase in producer price of 350% Fairly static exchange rate Pricing issues in SeedCo Inflationary pressure on other operating costs
DETAILED FINANCIAL REVIEW (CONT) Net Finance Costs ($206 bn) Increased seed cotton purchases ($351bn) Delays in accessing and disbursement of offshore lines Productive sector finance accessed only 10% of seed cotton purchases value. High interest rates Increase in producer price (350%) Inflationary pressures on other w/capital requirements. Slow offtake domestic market
The Cotton Company
DETAILED FINANCIAL REVIEW (CONT) Balance Sheet SeedCo has been consolidated Increase in inventory levels attributable to increase in producer price and increased stockholding Increase in receivables and creditors mainly attributable to exchange rate reviews ( Cottco export Drs US$15 mn) Increase in short term borrowings attributable to increase in the volume of seed cotton purchases + high cost of borrowing ( Cottco offshore borrowings US$32mn @ 7.5% p.a)
The Cotton Company
DETAILED FINANCIAL REVIEW (CONT) Cashflow Significant increase in SedCo F/Assets Increase in funding requirements bigger crop + financing cost
The Cotton Company
OUTLOOK Industry has successfully lobbied for a cotton support price ( To October 2006) Meaningful funding @ 5 % has already been accessed Recent exchange rate review/ review of other export incentives Planting seed sales to-date are encouraging Current projections firmer international lint prices