AFGRI LIMITED - TRADING STATEMENT
AFGRI LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1995/004030/06
Share Code: AFR
ISIN : ZAE000040549
(`AFGRI` or `the company`)
TRADING STATEMENT
Shareholders are referred to the circular dated 20 December 2004 explaining the
recent BEE transaction and in particular Annexure 4, presenting the pro forma
effect of the sale of the business operations and the associated special
distribution. The pro forma earnings and headline earnings per share of 52.9 and
63.2 cents per share, respectively, were based on an assumed effective date of
disposal of 1 March 2003 in accordance with the Listings Requirements of the JSE
Securities Exchange South Africa (`JSE`).
The actual effective date of the disposal was 1 December 2004, consequently
impacting on the current year`s results for a three-month period. Adjusting the
2004 pro forma earnings to give effect to the transaction for only three months
and the once-off STC charge of R35 million on the special distribution, the
adjusted pro forma earnings and headline earnings per share are 62.9 and 73.3
cents per share, respectively.
Shareholders are further referred to the prospects for the 2005 financial year
published on SENS on 24 November 2004, together with the release of the interim
results of 31 August 2004, wherein the directors announced that the results for
the full year were expected to be down compared to the 2004 financial year. This
was based on the prospects of firmer agri commodity prices, specifically cotton
and maize, and the weakening of the rand against the dollar.
Currently the rand has strengthened against the dollar since 31 August 2004 and
international and local agri commodity prices continue to decline, which is
having a negative impact on turnover and margins. This, together with unusual
weather patterns, has had a negative impact on AFGRI`s agricultural customer
base. The local textile industry is also in disarray as a result of low priced
Chinese imports and low world cotton prices both of which are expected to affect
the results of Clark Cotton. AFGRI has also not fully replaced the earnings of
Earlybird Farm which was reported as sold with effect from 31 August 2004 in the
interim results of the same date.
Based on the above, the directors expect the headline earnings per share for the
2005 year to be in the region of 20% to 30% lower than the above adjusted pro
forma headline earnings for the 2004 year of 73.3 cents. Earnings per share are
expected to be marginally up on the adjusted pro forma earnings of 62.9 cents
for 2004.
The forecast financial information on which this trading statement is based has
not been reviewed and reported on by the company`s auditors.
Johannesburg
31 January 2005
Merchant Bank and Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
CORPORATE FINANCE
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