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8/13/2019 Analysts Briefing 27 June 2005 Cottco
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The Cotton Company of
Zimbabwe
PresentationResults for the year ended
31 March 2005
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The Cotton CompanyPROGRAMME OUTLINE
1.Overview of full year performance
2.Financial Highlights (Historical Cost)
3.Detailed Financial Review Turnover
Cost of Sales
Operating Expenses
Finance costs
Balance Sheet
Cashflow
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The Cotton CompanyPROGRAMME OUTLINE (CONT)
5.Outlook
6. Questions
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The Cotton CompanyOVERVIEW OF THE FULL YEAR
(CONT)
Operations (Cont)
Scottco and Quton Seed Co performed to
expectation
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The Cotton CompanyOVERVIEW OF THE FULL YEAR
(CONT)
Industry Regulation
Gvt response still being awaited
Monetary authorities also keen to see order
restored within the cotton sub-sector
Prospects look bright
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The Cotton CompanyOVERVIEW OF THE FULL YEAR (CONT)
Inputs Credit Scheme
Further streamlined
$44bn disbursed Vs $52bn in prior year
Recovery in money terms 97%
High financing cost a challenge
National inputs scheme the answer
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The Cotton CompanyOVERVIEW OF THE FULL YEAR (CONT)
Investments
Stake in SeedCo now 40% up from 34.75%
SeedCos contributed $73bn to PBT
Prospects look bright
Outlook To be covered after financials have been presented
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The Cotton CompanyDETAILED FINANCIAL REVIEW
Turnover ^ 317 %
Consolidation of SeedCo
Increased Sales Volumes ( Lint & Ginned seed ) Improvement in lint prices
COS 503 %
SeedCo consolidated
Increase in producer price of 350%
Seed cotton volume higher
Sales volumes higher
Inflationary pressure on other operating costs
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The Cotton CompanyDETAILED FINANCIAL REVIEW
GP @ 37 % down from 55 % last year
Increase in producer price of 350%
Fairly static exchange rate
Pricing issues in SeedCo
Inflationary pressure on other operatingcosts
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The Cotton CompanyDETAILED FINANCIAL REVIEW
(CONT)
Operating Expenses 493 %
SeedCo consolidated
Seed cotton purchases volume
Higher sales volumes Inflationary pressures
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The Cotton CompanyDETAILED FINANCIAL REVIEW (CONT)
Net F inance Costs ($206 bn)
Increased seed cotton purchases ($351bn)
Delays in accessing and disbursement of offshorelines
Productive sector finance accessed only 10% ofseed cotton purchases value.
High interest rates Increase in producer price (350%)
Inflationary pressures on other w/capitalrequirements.
Slow offtakedomestic market
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The Cotton CompanyDETAILED FINANCIAL REVIEW (CONT)
Balance Sheet
SeedCo has been consolidated
Increase in inventory levels attributable to increasein producer price and increased stockholding
Increase in receivables and creditors mainlyattributable to exchange rate reviews ( Cottco
export Drs US$15 mn) Increase in short term borrowings attributable to
increase in the volume of seed cotton purchases +high cost of borrowing ( Cottco offshore
borrowings US$32mn @ 7.5% p.a)
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The Cotton CompanyDETAILED FINANCIAL REVIEW
(CONT)
Cashflow
Significant increase in SedCo F/Assets
Increase in funding requirementsbigger
crop + financing cost
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The Cotton Company
OUTLOOK
Industry has successfully lobbied for a cotton
support price ( To October 2006) Meaningful funding @ 5 % has already been
accessed
Recent exchange rate review/ review of other
export incentives Planting seed sales to-date are encouraging
Current projectionsfirmer international lintprices
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Questions