Trading Update and 2020 Annual Accounts Timetable

RNS Number : 4784A

Agriterra Ltd

29 September 2020

 

29 September 2020

Agriterra Limited ('Agriterra' or the 'Company')

Agriterra Limited / Ticker: AGTA / Index: AIM / Sector: Agriculture

Trading Update and 2020 Annual Accounts Timetable

Agriterra Limited, the AIM-quoted African agricultural company, is pleased to provide the following

H1 2021 trading update and an update on its 2020 Annual Accounts Timetable:

H1 2021 Trading Update

Like other businesses in Mozambique, the Company's operations experienced significant and unanticipated events during H1 2021.

On 1 April 2020, the Mozambican government implemented policies to minimise the spread of the COVID-19 pandemic, which have remained in place to date and are anticipated to continue into 2021. All of these policies, including the closure of national borders and the general downturn in industry and the logistics sector have inevitably had a negative impact on the overall economy in Mozambique.

The Company's Grain and Beef sales have however been encouraging during H1 2021 despite growth being restricted by the reduction of the informal retail sector as a result of COVID-19, this accounting for a significant proportion of the Company's sales.

Grain Division Update:

The absence of reliable interprovincial transportation and cash due to the COVID-19 restrictions has resulted in a delay in the maize harvesting and buying season by over 3 months. As a result, DECA has had to adjust its initial forecast purchases of maize from local smallholder farmers from 42,000 tonnes to 35,000 tonnes. To date the Company has purchased 20,000 tonnes and is confident that a further 15,000 tonnes will be acquired in the next 3 months.

On a positive note, the COVID-19 shutdown has limited entry into the market of imported maize meal, allowing DECA to access new markets, and increase supply into existing markets, resulting in a sales performance to date slightly ahead of internal expectations pre COVID-19.

Beef Division Update:

The Beef operation has been more adversely affected by the COVID-19 lockdown as Mozbife has both struggled to access the cattle production areas, and the market for its products has shrunk significantly due to the downturn in the economy.

However, with improved operating efficiencies and an increase in the unit value per tonne of meat, Mozbife has seen an improvement in net margins, which is hugely encouraging.

As announced previously, Mozbife was awarded a grant to build nine (9) "Cattle Service Centres" in 2 provinces by the World Bank. This programme was temporarily delayed by the COVID-19 lockdown, but despite these challenges the project was successfully completed in H1 2021.

2020 Annual Accounts Timetable

The Company also announces that following the grant by AIM Regulation of an extension to its 2020 annual reporting deadline (further to guidance provided in "Inside AIM" dated 26 March 2020), it now expects to report its 2020 Annual Results for the year ended 31 March 2020 in October 2020. The delay in publishing the 2020 Accounts is due to the impact of the COVID-19 lockdown in Mozambique on the ability of the Company's auditors and other key financial personnel to access all required information on a timely basis. Despite the logistical challenges presented by COVID-19, the Company is pleased to confirm that the audit process is currently being finalised.

The Company expects to report a total revenue figure (which is currently unaudited) for the 2019/2020 financial year for the Group of $12,940,000 (2018/19: $10,629,000), representing an increase in revenue of 22% compared to the prior year.

Caroline Havers, Executive Chair, commented: "We are not alone in having been impacted by the significant events in Mozambique and the rest of the world over the past six months. However, our team have nonetheless demonstrated great tenacity in maximising sales during H1 2021. We expect further ongoing difficult trading conditions in H2 2021 but as a Company are well positioned to come through this period in a strong position."

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The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No. 596/2014, and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.

For further information please visit www.agriterra-ltd.com or contact:

Agriterra Limited	Strand Hanson Limited (Nominated & Financial Adviser and Broker)
Caroline Havers	James Spinney / Ritchie Balmer
[e-mail]	[phone]

 

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