Agribusiness-focused investment holding group Zeder is upbeat about the coming fruit season after good winter rains in the Western Cape despite the destruction from recent storms that cut off roads, destroyed infrastructure and damaged crops.
“The Western Cape winter period experienced excellent rainfall (all farm dams at capacity) and cold units, which bodes well for the coming pome season,” the company, valued at about R2.6bn on the JSE, said on Tuesday in its results for the six months to end-August.
“The recent Western Cape storms fortunately also resulted in limited damage to farming infrastructure and minimal damage to biological assets,” it added.
Pomes is a general term name for deciduous fruit such as apples and pears that have a core with seeds surrounded by an edible outer layer and skin.
Zeder was listed on the JSE in 2006 as a vehicle to consolidate PSG’s various agribusiness industry holdings. Part of its interests include fruit producer Capespan and its pome farming units located in the Western Cape.
In September, Zeder announced it would sell its majority stake in fruit distributor Capespan to special-purpose acquisition company 3 Sisters for R550m, of which it will receive R511.39m and retain ownership of Capespan.
Zeder painted a more sombre overall picture, however, noting that the macro-economic environment for investors in the agribusiness sector and related industries remains “relatively constrained”.
Still, CEO Johann le Roux pointed out that the most recent Agricultural Business Chamber of SA (Agbiz) and Industrial Development Corporation (IDC) Agribusiness Confidence Index had improved, “implying that agribusinesses are cautiously adapting to the challenging operating business conditions in the country”.
The index rose six points to the neutral mark of 50 in the third quarter, meaning businesses are neither pessimistic or optimistic.
“We anticipate a continuation of the uncertainty and volatility in markets in the short and medium term, driven by concerns about inflation, higher interest rates, deteriorating infrastructure, failing municipalities and the risks to energy availability,” Le Roux said.
In terms of financials, Zeder’s sum of the parts, which is calculated using the internal valuations for unlisted investments, amounted to R4.03bn at the end of the reporting period, and the underlying investment portfolio, which excludes cash, cash equivalents and other net assets and liabilities, at R3.49bn.
The net asset value per share decreased 2.6% year on year to R2.62.
The group will pay a special dividend of 10c a share, amounting to R154m, but no ordinary dividend was declared.
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