NWK reports H1 profit contraction, optimistic of H2 recovery
Agriculture products and services provider NWK’s half-year profit has declined; however, the second half of the 2017 financial year is forecast to be much improved as the group sheds certain lossmaking operations, assisted by a normal production season after four seasons of drought.
For the six months to October 31, NWK posted an after-tax profit of R10.6-million, down from the R25.3-million in the corresponding period in 2015, as the full effect of the drought was felt, particularly in the grain segment.
The continued operations delivered an after-tax profit of R54-million in the first half of the year, up from R46.8-million in the prior comparable period.
“The current disposal of certain lossmaking businesses of the group – as well as an expected normal production season ahead – will, however, help that the sluggish financial results do not continue in the second half of the financial year,” NWK chairperson Heinrich Krüger said on Wednesday.
The grain segment reported a 30% decline in profit, exacerbated by late grain receipts, while the trade and financing sectors performed satisfactorily.
Meanwhile, with rainfall in large parts of NWK’s service area, the company anticipated that producers would be able to undertake proposed plantings.
“Depending on the rain during the current and coming months, a normal production season can be expected,” he said.
In addition, Noordfed, Epko Oil Refinery and Agrisig have been classified as discontinued operations, with the negotiations for the sale for the Noordfed mills and the Epko plant nearing conclusion.
“The expectations are that the recent negative results will not continue in the second half of the financial year,” Krüger concluded.
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