Agra harvests buoyant financial returns

Farmers’ co-operative, Agra has registered buoyant results for its financial year ended 31 July 2006 that reveal a healthy cash flow. And to thank its loyal members, it has declared an N$6.5 million bonus payout, which will be effective in January 2007 and would be based on business conduct by each member. The financial results pay tribute to rising livestock commodities prices and the retail division that delivered a turnover of 11% over that of last year. The higher prices of Karakul pelts and the larger quantity of the pelts sold in the year also helped aid this excellent financial performance. Net profit before tax is at N$16.4 million from N$3.7 million in 2005. Gross turnover is up by 17% from N$782 million in the previous financial year to N$912 million. Gross profit from all of Agra's business units came in at N$77 million while the co-operative registered a gross profit of N$68 million.

Agra's CEO Peter Kazmaier

Gross value for livestock transactions for the year under review, excluding karakul pelts and wool, amounted to N$512 million, compared to N$432 million in 2005.
“The increase is due to a large increase in prices for virtually all livestock commodities,” said Agra's CEO, Peter Kazmaier, in the annual report. Karakul pelt quantities sold at the two auctions in Copenhagen during September 2005 and April 2006 amounted to 109,807 pelts. This is an increased of 12% compared to the 97748 pelts sold in the previous year. “Unit prices per pelt also increased dramatically, by 65%, from an average of N$206.06 in 2005 to N$339.30 in 2006,” said Kazmaier. Turnover in the retail division, excluding Safari Den, increased by 11% from N$283 million in 2005 to N$314 million. “This was achieved although competition in the market remained fierce for most of the products sold by Agra,” he said.

The co-operative’s balance sheet strengthened further during the year under review recording a positive cash flow of N$19 million for 2006 thereby switching a bank overdraft of N$4,5 million in 2005 to a positive bank balance of N$14 million. “Whilst competition is welcome, it is not always feasible to accommodate all the players in the small Namibian market. We are thus certain that margins will remain under pressure while expenses will continue to increase. Interest rates will also continue to rise during the coming year, as will inflation. This again will probably result in a decline in spending pattern of Agra’s customer base. Another important factor influencing Agra’s performance is the rain season, which has been forecast to be below average for the period from January 2007 to April 2007. We are nevertheless confident that Agra will be ready to face the challenges ahead,” said Kazmaier.