JSE-listed agricultural group Crookes Brothers has warned shareholders it expects to report a loss when it publishes its annual results later this week.
It said in a trading update on Monday that it expects to report a headline loss per share of 708.8c for the year to end-March from headline earnings per share of 229.6c a year ago.
“Geopolitical and weather events beyond the group’s control together with the impact of load-shedding, have negatively impacted earnings and cash flows for the year under review,” Crookes Brothers said.
Traditionally a sugar-cane business, Crookes Brothers has over the years diversified into deciduous fruit, bananas, macadamias and property to grow investor value.
The company cited “very difficult and challenging” trading conditions during the year to the end of March. This is as the broader agricultural industry experienced a surge in agricultural input and logistics cost increases precipitated by the Russia-Ukraine conflict.
At the half-year to September, Crookes Brothers flagged that developments in Europe had resulted in the collapse of prices in the deciduous fruit market as sanctions imposed by the West obliged distributors to find alternative markets in Europe for fruit originally destined for Russia.
Moreover, the financial performance in the deciduous fruit, banana and macadamia divisions was hit hard by a large contraction in average selling prices resulting in significant pressure on margins and losses in some divisions.
Though sugar volumes were reportedly slightly down due to the timing of the harvest, prices remained stable.
The group also reportedlower demand from China as years of heavy investment in that country’s macadamia plantations had successfully reduced dependence on imports from other countries.
Macadamias in the past fetched extremely attractive hard currency prices. Crookes Brothers said the switch to alternative customers in an oversupplied market had seen a significant downward price correction notwithstanding the benefit of a weaker rand/dollar exchange rate.
The company’s results are expected on or about June 29.
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