Latest news with #Agrimark
IOL News
08-05-2025
- Business
- IOL News
KAL Group profit dips slightly, but management is optimistic about the second half
The KAL Group is an agriculture and lifestyle company specialising in the trade and retail of agriculture, fuel and related markets in southern Africa. Its management is optimistic about trading prospects in the second half of is financial year to end-September 2025. Image: supplied KAL Group, the JSE-listed agri, fuel and convenience speciality retailer reported a steady performance in the six months to March 31, with earnings only marginally lower, and it has predicted a stronger performance in the second half. It generated R557.1 million in earnings before interest, tax, depreciation, and amortisation (EBITDA), a decline of 2.1% over the first half of last year, while R440.6m in pre-tax profit (PBT) was lower by 3.9%. However, the interim dividend was raised to 56 cents a share from 54 cents in 2024 – reflecting business confidence and a commitment to shareholder returns. 'KAL Group has grown tenfold over the past 14 years. To put it in perspective – fourteen years ago, we made just 10% of what we've reported this half. That kind of growth, even in a flat period, shows our business remains solid,' Sean Walsh, CEO of KAL Group, said Thursday. Debt was reduced by R243.5m in the first half, and the debt-to-equity ratio declined to 48.4% from 56.5%. The balance sheet remained robust, with healthy cash flow, strong working capital, and debt levels at their lowest in a decade. 'Over the past two years, we've deliberately prioritised debt stabilisation and cash preservation, including refraining from major expansion to bed down the R1 billion PEG Retail Holdings acquisition,' he said. He said they were now well positioned to reach their target of R1.5 billion PBT by 2030, and a debt-to-equity ratio of 40%, delivering a return on equity of 15%. 'We will achieve this through footprint expansion, market share growth, and improved efficiencies, with the team expecting significant inroads already made by year-end,' he said. Revenue was impacted by a 12.4% decline in fuel prices — fuel comprises 57% of the group's revenue, but this had no material effect on profitability due to the regulated nature of fuel pricing. Walsh said a R5 change in the fuel price per litre can shift revenue by as much as R250m in a month, yet it has little bearing on gross profit apart from the one-off stock price adjustment. In fact, group R1.7bn gross profit increased by 0.9% (and by 1.5% excluding fuel price change gains). The Agrimark business reported a 2.4% year-on-year increase in PBT. The segment felt the impact of slow growth in the general retail sector and a slowdown in building activity — with cement volumes down 0.7%. However the lower interest rate environment was seeing farmers beginning to reinvest and spend capital after several tough years. Strong sales of netting infrastructure at Agrimark signalled a return of capital investment to farms, and strong fertiliser sales signaled an execution of strategy in to grow market share in the Eastern Cape. The fuel and convenience business, TFC Operations (TFC), was rebranded to PEG Retail Operations (PEG). PEG was affected by lower fuel prices, subdued volumes, and the shift in the Easter holiday trading period from March last year to April this year. PBT declined by 4.8%.
News24
08-05-2025
- Business
- News24
Agrimark owner grows dividend; Maersk cuts its global container projection
In an extremely busy day for local corporate news, Agrimark and PEG fuel owner KAL upped its dividend despite some profit pressure, while Gemfields is picking up the pace again in Zambia. In international news, shipping group AP Moller-Maersk warned on Thursday that a global trade war and geopolitical uncertainty could trigger a drop in global container volumes this year, although it left its profit outlook unchanged. SA business Agricultural services and retail group KAL reported a slight slip in headline earnings to R310 million for its six months to end March amid a 2.6% fall in fuel volumes. But the group said while it saw less load-shedding related demand, it continued to outperform the rest of the industry. Profit from the Agrimark business segment, which includes the Agrimark retail branches, fuel filling stations, packaging distribution centres, New Holland agency services as well as fuel redistribution units, increased by 2.4%, while agri revenue - such as grain handling - growth was strong, with all sectors in which it operates performing well, except for the below-average 2024 wheat harvest. But the group remains bullish about its prospects, including due to Easter holidays falling in its second half, and it upped its dividend by 3.7% to 56c (R41.6 million. 'KAL Group has grown tenfold over the past 14 years. To put it in perspective – fourteen years ago, we made just 10% of what we've reported this half. That kind of growth, even in a flat period, shows that our business remains solid,' said CEO Sean Walsh. Ruby and emerald miner and auctioneer Gemfields announced that its Kagem emerald mine in Zambia which is 25% owned by that country's government, will 'shortly' recommence a programme of focused open-pit mining to recover more premium emeralds. Kagem had suspended all mining from 1 January 2025 to focus on processing ore from its significant ore stockpile utilising the upgraded processing plant. Emerald production from the processing plant in 2025 so far, in terms of carats recovered, has been in line with the expectations, it said, producing a lower proportion of higher-quality or premium emeralds than direct open-pit mining methods. The decision to recommence full-scale mining will continue to be assessed as market conditions develop, it added. Anheuser-Busch InBev reported that its brands took market share from competitors in South Africa, with Corona and Stella Artois seeing solid sales growth in the country in the first quarter. Still, the Belgium-headquartered giant reported a volume decline of 'low single digits' (below 5%) in South Africa, where its brands include Castle Lager, Carling Black Label, and Flying Fish. Along with others in the industry, the quarter was affected by the late Easter holidays, which this year fell later in April. Its 'Beyond Beer' brands – primarily Brutal Fruit – saw volume growth of mid-single digits, while Corona and Stella Artois volumes were up in the low-teens (10% to 14%). State-owned chicken producer Daybreak Foods says it is considering business rescue, a day after officials from the National Council of Societies for the Prevention of Cruelty to Animals (NSPCA) said they were forced to cull 350 000 starving chicks. Daybreak said that significant financial constraints were affecting its operations, meaning it could not afford feed and was struggling to pay suppliers and staff salaries. It has requested funding from the state-run asset manager, the Public Investment Corporation (PIC). Workers at Daybreak's facilities in Limpopo told News24 they were on strike due to the non-payment of salaries, meaning they could not make rental payments, cover debit orders, or pay for scholarships. Daybreak said it could not commit to a 'specific date for employee salary payments' as it was awaiting a response from the PIC regarding the funding request. Earlier this week, the NSPCA said it had been forced to cull 350 000 starving chicks at contract farms that raise them for Daybreak. Many had resorted to cannibalism in a desperate bid to survive. products or services,' Godongwana said in a written response dated 14 February this year. Paper, pulp and packaging group Sappi reported a disappointing second quarter amid depressed SA wood prices, as well as longer-than-expected local maintenance shuts. Sappi reported a loss of $20 million (R365 million) for its second quarter to end March from a profit of $29 million previously. Its adjusted earnings before interest, taxation, depreciation and amortisation fell 40.5% to $107 million. The group reported a financial hit of $13 million more than expected as a result of extended maintenance at its Saiccor and Ngodwana mills due to wear and tear on equipment being worse than expected, though these issues have now been resolved. It also saw a R307 million ($17 million) forestry fair value loss amid depressed SA wood prices. It also had to contend with uncertainty around tariffs, with China being the major demand source for the ingredients used to make textiles, but Sappi said it was still eyeing some positive trends, including continued demand for environmentally sustainable packaging. Naspers and Prosus, Africa's most valuable group of companies, said on Thursday that it expects to exceed its target for ecommerce profitability in its year to end March. In a letter to mark the 10 months since new CEO Fabricio Bloisi assumed the role, and ahead of full-year results to end March that are expected in June, Bloisi said the group will report adjusted earnings before interest and tax (aEBIT) of more than $430 million (R7.9 billion), ahead of a target of $400 million set in October. 'For (financial year 2026), I want to achieve at least the same level of incremental aEBIT. This is important because we should be measuring our results not by the millions, but by many, many billions and we will get there,' he said. Bloisi, who is the former CEO of iFood, the group's already profitable Brazilian delivery giant, has set a target of creating another $100 billion in shareholder value, aiming to leverage platform effects across the group - such as sharing best practice using innovative technology in customer service - but also through acquisitions. Sugar producer Tongaat Hulett announced that two shareholders launched a High Court application on 25 April seeking to declare that its business rescue plan alters the rights of shareholders and has not been finally or lawfully adopted. Tongaat said it would oppose the motion, which seeks to interdict any further implementation. Creditors had approved the plan of a consortium called Vision in early 2024, but shareholders shot down a plan that could have seen the sugar producer potentially remain listed, kicking off an asset sales process that has already received nods from competition authorities in SA, Botswana, Mozambique and Zimbabwe. Paper and packaging giant Mondi reported it that higher sales volumes and strong cost controls helped bump up its first-quarter profits. Underlying earnings before interest, taxation, depreciation and amortisation jumped almost 36% year on year to €290 million (almost R6 billion) in the three months to end March, with this profit measure excluding various items to reflect the cash-generating ability of the group. Strong demand also means the group expects price increases to benefit it in the second quarter. Nasdaq- and JSE-listed Lesaka Technologies reported a record performance in its consumer division helped it keep to its guidance for its third quarter, and it's confident enough to expect a profit next year as well. Lesaka, which has been growing rapidly since rebranding from Net1 UEPS in 2022, reported its loss jumped to R404 million from about R76 million in its third quarter, weighed down by about a R311-million hit to non-core asset Mobikwik, an Indian payments firm which listed in that country late last year. However, revenue was within guidance, though it dipped, while adjusted earnings before interest, taxation, depreciation and amortisation (ebitda) improved 29% in rand terms to about R237 million, in line with guidance. The group also said it expects net income attributable to shareholders to be positive in 2026, though this excludes possible acquisitions, while its guidance for 2026 implies an about 42% rise in adjusted ebitda at the midpoint. It has guided as much as R1 billion of this profit measure for 2025 and R1.45 billion for 2026. Industrial group enX flagged a between 71% and 81% fall in headline earnings per share for its six months to end February, when it also expects to report a basic loss per share of as much as 48c. Revenue from continuing operations is expected to decrease by approximately 10% mainly due to lower demand related to minimal loadshedding, it said, while it also booked an impairment related to its disposal of its lubricant interests. Stellenbosch University has appointed Professor Reza Daniels, Director of the Southern Africa Labour and Development Research Unit at the University of Cape Town, as the new Dean of the Faculty of Economic Management Sciences (EMS). He will start his term on 1 November 2025. Daniels brings a wealth of experience in senior leadership, not only within the higher education environment but also within the private sector, the university said in a statement. Global business Shipping group AP Moller-Maersk warned on Thursday that a global trade war and geopolitical uncertainty could trigger a drop in global container volumes this year, although it left its profit outlook unchanged. Trade tariffs imposed by US President Donald Trump have prompted companies worldwide to cut sales targets and major economies to revise down growth prospects, impacting demand for shipping goods at sea. Maersk, viewed as a barometer of world trade, said it now expects global container volumes within a range of down 1% to up 4% this year, compared with the 4% growth estimated at the beginning of the year. 'The outlook for global container demand over the remainder of the year remains highly uncertain, shaped by a rapidly evolving trade policy landscape and increasing recession risks in the United States,' Maersk said. - Reuters Dubai's Emirates Group, which includes the Middle East's biggest airline, announced on Thursday gross annual profit of $6.2 billion (R112 billion), its third record in three years. The 18% rise in profit, based on strong customer demand, slimmed to $5.6 billion after the UAE's recently introduced corporate tax, which was applied for a full financial year for the first time. 'The Emirates Group has raised the bar to set new records for profit, revenue and cash assets,' chairman Sheikh Ahmed bin Saeed Al Maktoum said in a statement. The group invested $3.8 billion in new aircraft, infrastructure and technology 'to support its growth plans', the statement said. Its workforce grew by 9% to an unprecedented 121 223 employees. The group declared a $1.6 billion dividend to its owner, the Investment Corporation of Dubai (ICD). - AFP The European Commission proposed on Thursday countermeasures on up to €95 billion (almost R2 trillion) of US imports if negotiations with Washington fail to remove the series of tariffs applied by US President Donald Trump. The new measures, representing the EU's response to US import tariffs on cars and its broader 'reciprocal' tariffs, would target US wine, fish, aircraft, car and car parts, chemicals, electrical equipment, health products and machinery. The European Commission, which coordinates trade policy for the 27-nation EU, said it was launching a month-long consultation for EU members and business to react. It will then take a final decision on its counter-tariffs, likely to hit a smaller volume of US imports. The announcement of a new list of products the EU may target comes on the day Trump is expected to announce a trade deal between the United States and Britain. – Reuters Sportswear brand Puma reported a decline in first-quarter profit margin on Thursday and no growth in first-quarter sales as the company cuts costs in an attempt to turn its performance around. Puma sales of €2.076 billion (R42.5 billion) were slightly better than analysts' forecast of €2.041 billion, up by 0.1% compared with the first quarter last year. - Reuters China's top chipmaker SMIC said Thursday its first-quarter profit surged, despite a punishing trade war and tensions between Beijing and Washington over key technologies. China has sought to increase its self-reliance in the field of semiconductors, which are used in everything from televisions and cars to weapons and supercomputers. The United States has taken steps to stop Chinese firms from accessing its advanced technology and tightened curbs on exports of state-of-the-art chips and the equipment to make them. SMIC reported in a filing to the Hong Kong Stock Exchange on Thursday that first-quarter profit attributable to owners of the company stood at $188 million, up 161.9% compared to the equivalent period last year. The Shanghai-based company said revenue rose 28.4% year-on-year to $2.2 billion. These results marked an improvement for the company after annual profits plunged 45.4% last year compared to 2023. The company said it expected revenue to decrease 4% to 6% in the second quarter, adding that it saw 'both opportunities and challenges' in the second half of the year. 'The company will enhance its adaptability and risk resilience capability,' it said. - AFP $200 billion (R3.6 trillion) Bill Gates pledged on Thursday to give away almost his entire personal wealth in the next two decades and said the world's poorest would receive some $200 billion via his foundation, which comes as governments worldwide are slashing international aid, Reuters reported.
Zawya
20-02-2025
- Business
- Zawya
Securing South Africa's agricultural future with advanced irrigation technology
Despite its challenges as a water-scarce country, prone to droughts and erratic rainfall, South Africa has positioned itself as a leading food exporter and a major player in high-value horticultural markets. This achievement can largely be credited to the country's farmers' forward-thinking approach, embracing cutting-edge agricultural technologies—particularly advanced irrigation systems integrated into precision agriculture—that optimise farming inputs and drive higher yields and efficiency. This commitment to innovation is evident in the scale of South Africa's irrigation infrastructure. Arno Abeln, managing director of Agrimark, estimates that the replacement value of the country's irrigation systems—comprising drip systems, microfilters, pumps, and pipes—stands at R34bn, based on current production levels. Growing market for precision farming 'Assuming an annual replacement rate of 3%, the annual market size is R1bn, based on its current size. Looking to the future, as more farmers are expected to switch to precision farming, the need for this type of technology will increase, and with it the size of the market.' While historical circumstances have forced South African farmers to become water-wise, there are considerable pressures to double down on this trend. Long-term climate forecasts, including those by the Intergovernmental Panel on Climate Change, envision longer droughts and more erratic rainfall over Southern Africa in coming years, with considerable implications for agriculture and food security across the region. In addition, while the size of South Africa's water resource will not grow, its population is expected to grow by 17% in the coming 10 years, effectively reducing per capita water availability. Sustainable irrigation practices 'Agriculture in South Africa consumes 60% of the available water resource; that is massive in a water-scarce country. Our producers have a responsibility to farm sustainably, and that is not possible without good, sustainable irrigation practices.' Yet sustainable irrigation practices are highly dependent on the system functioning optimally. Abeln likens the upkeep of an irrigation system to that of servicing a car; over time, components wear out. If not replaced timeously, they increase strain and consumption throughout the system, reducing efficiency and increasing the risk of breakdowns. He explains that several characteristics of the everyday use of irrigation systems necessitate the periodic replacement of components. 'Over time the peroxide used to clean irrigation systems erodes the thickness of the pipe walls, so eventually the pipes don't give you the same flow rate. Many farmers fertigate, in other words, they apply liquid fertilisers via their irrigation systems, and these fertilisers can also reduce the lifespan of the dripping lines. 'You may have a dripper installed to give 0.7 litres per hour, but then a grain of sand or a micro-small stone gets caught up in the dripline, and suddenly this dripper doesn't give you 0.7 litres per hour any more, which leads to inefficient production.' Abeln notes that amid the past three years' difficult economic conditions and steep increases in farming input costs, many farmers may decide to postpone the scheduled replacement of irrigation components by a year or two. 'This is a risky decision because the costs escalate quickly. If you put off replacing 5 hectares of irrigation on a wine farm for two or three years, you suddenly must replace 15 or 20 hectares. In the meantime, the worn components cost you more money due to reduced efficiency.' Technological innovations in irrigation Crop production under netting has been one of the biggest game changers in irrigation farming over the past decade, as it reduces evaporation from orchards and also the overall water requirement. Networked soil moisture probes that can be monitored remotely in real-time help to ensure that crops remain optimally watered, and irrigation systems that can be operated remotely via cell phone, are common features of these precision farming installations. 'Agrimark is committed to helping our farming and retail customers improve water stewardship. For the long-term sustainability of our relatively good food security in SA, it would be advisable that Government and private sector invest in expanding dam and water irrigation systems in SA. "Recognising the complexity of these systems, we offer tailored irrigation solutions that meet the diverse needs of South Africans,' concludes Abeln.
