• SeedCo’s growth profile is shifting regionally, with Tanzania and Kenya increasing their share of regional volumes to 40%.
• Zimbabwe volumes fell 40% as management prioritised cash sales and reduced exposure to public sector receivables.
• SeedCo International doubled profit after tax to US$13.1 million, supported by stronger margins, better mix and 39% operating cash flow growth.

Harare — SeedCo Group's earnings are becoming progressively more regional, with Tanzania emerging as the principal growth engine while Zimbabwe transitions into a lower-volume, higher-quality cash generation business as management deliberately reduces exposure to public sector credit risk.

Speaking during a joint analyst briefing yesterday, Chief Executive Officer  Morgan Nzwere outlined a strategy that is reshaping the group's earnings profile. Rather than pursuing market share at all costs, SeedCo has accepted a significant reduction in Zimbabwean sales volumes in exchange for stronger cash conversion, while accelerating expansion across East Africa where agricultural investment, commercial farming and seed demand continue to expand.

The shift is increasingly changing the geography of the group's earnings. SeedCo International, which houses the regional operations, reported profit after tax of US$13.1 million, more than doubling from US$5.7 million in the previous year. EBITDA increased to approximately US$29 million from US$15.3 million, while gross margin strengthened to 53%  from 50%, supported by improved pricing discipline, product mix and the increasing contribution from higher-growth regional markets. Operating cash flow rose 39 percent to US$15.9 million, providing stronger internal funding for expansion and shareholder distributions.

Management noted that translation of Tanzanian shilling earnings reduced reported revenue growth by roughly 10%, although underlying operating performance remained considerably stronger than reported figures suggest.

Regional seed volumes remained broadly stable at 46,836 tonnes compared with 46,317 tonnes a year earlier, although the composition of those volumes changed materially. Tanzania and Kenya increased their contribution to 40% of regional volumes from 37%, while Zambia, Malawi and Botswana continued to account for approximately 50%. Nigeria, Mozambique, Ethiopia and the Democratic Republic of Congo contributed a further 9%, with Angola and Uganda identified as the next expansion markets.

The changing mix matters because it gradually reduces dependence on individual markets while spreading earnings across economies with different rainfall patterns, planting seasons, policy environments and currency cycles. A broader regional footprint strengthens earnings resilience by reducing exposure to country-specific shocks that historically affected agricultural businesses operating within narrower geographic markets.

Tanzania has become central to that strategy. The country continues to benefit from expanding commercial agriculture, growing demand for certified seed, increasing investment in food production and supportive agricultural development programmes. Those structural drivers have positioned Tanzania as SeedCo's fastest-growing regional market and an increasingly important contributor to group profitability.

Zimbabwe presents a markedly different operating environment, SeedCo Limited reported a 40% decline in sales volumes to 18,264 tonnes from 30,037 tonnes, although management stressed that the reduction reflected a deliberate commercial decision rather than weakening demand. The company significantly reduced exposure to public sector receivables, prioritising cash sales over volume growth in an environment where liquidity management has become increasingly important.

Public channel volumes declined 66%, while open market sales increased 10% to 7,454 tonnes, demonstrating continued demand within the private retail market. Revenue declined 8%, while profit after tax fell 54%.

The strategy effectively exchanged market share for stronger working capital quality.Rather than extending additional credit into slower-paying channels, The company chose to shorten the cash conversion cycle and strengthen liquidity. For an agricultural inputs business operating in a constrained domestic funding environment, faster cash collection improves inventory replenishment, reduces financing requirements and strengthens balance sheet flexibility ahead of future planting seasons.

The company has also expanded its direct retail network to 21 company-owned outlets, reducing dependence on intermediary distributors while strengthening pricing control, customer relationships and immediate cash collections.

The contrast between Zimbabwe and the regional business illustrates how SeedCo's operating model is evolving. Zimbabwe is increasingly being managed as a disciplined cash-generating business, while regional operations are becoming the primary source of earnings growth. That diversification reduces exposure to domestic policy risks, liquidity constraints and public sector payment delays without diminishing Zimbabwe's strategic importance within the group.

Input cost pressures nevertheless remain an important watchpoint across the regional portfolio. Management reported substantial increases in fertiliser and fuel costs following disruptions associated with the conflict in the Middle East and partial closure of the Strait of Hormuz. Fertiliser costs increased 69% in Zambia, while fuel costs rose 65% in Tanzania. Across the regional business, management estimated the combined impact on seed production costs at between 8% and 10%.

The financial impact remained contained because most seed sales had already been committed before the cost increases emerged, limiting immediate pressure on margins. The experience nevertheless highlights the importance of procurement planning, inventory management and supply chain resilience as geopolitical events increasingly influence agricultural input costs.

Looking ahead ,SeedCo also continues investing behind long-term productivity with seed drying capacity nearly doubling to 9,000 tonnes, while a new seed cleaning facility in Zambia is nearing completion. The company is also venturing into early adoption of artificial intelligence across research and distribution activities to improve seed development, production planning and inventory allocation, supporting higher productivity as the regional business expands.

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