SIMON BROWN: I’m chatting now with Eddie Fivaz, CFO at TWK. Results [are out] for August, 2022 – that’s the year-end. Revenue up 17.7%, headline earnings a little bit over 45% greater, and a R1.50 full-year dividend. That’s a little bit over 31% greater. Eddie, I admire the time immediately. You discuss round, as a company technique, optimising value chains. I take a look at these outcomes and that means that’s very a lot what’s occurring within the enterprise. And you’re getting some market share on the similar time.
EDDIE FIVAZ: Yes, positively. We gained some good market share particularly in KZN. Our farmers – industrial farmers particularly, but additionally curiously sufficient rising farmers – noticed good progress, although on a low base from the earlier yr; good progress from these markets. So we’re actually enthusiastic about it with these farmers of the longer term. And we prefer to assist them as properly, with clearly our good sturdy industrial farmers.
SIMON BROWN: Another area you’re selecting up: you’ve bought timber, and after all Peak Timbers is now in these outcomes for the complete yr. But you say that your exports are up some 80%-odd, partly due to Ukraine and the shortage of provide out of there. Also Indonesia – you discuss forest fires there. You’ve picked up a brand new buyer. Are they prone to keep or do they maybe transfer again to their previous provider? Would you have got an edge now, a foot within the door?
EDDIE FIVAZ: Definitely a foot within the door. That’s our expectation. So our exports are up 88% p.c on the earlier yr. And even with that greater quantity, it’s not the very best quantity that we’ve had prior to now. Pre-Covid our volumes have been near 800 000 tonnes in comparison with the 660 000 tonnes that we had this yr. We count on our exports for the brand new monetary yr to be on par with our most capability at our export facility.
The progress is actually from the European international locations, but additionally from our previous clients [in] Japan and China. And sure, we count on the brand new clients to remain on board. South Africa is recognized for excellent high quality wooden chips. And with our historical past, good product, we consider that will probably be a sustainable relationship.
SIMON BROWN: On the interior gross sales, you talked about that mine demand was decrease. There was a strike at one among your clients. Is that vital? Obviously it damage within the numbers, and it might be again within the subsequent monetary yr – however was that basically vital for the sector?
EDDIE FIVAZ: Simon, any loss is vital for us and we don’t like several losses. But fortunately due to our diversified mannequin, not solely when it comes to totally different segments, but additionally diversified in our timber section, we have been capable of provide the timber to totally different markets, fortunately. But we predict that we will provide the mines with our timber merchandise within the new monetary yr. But like I stated, good progress from different markets. And so it won’t affect us as badly.
SIMON BROWN: Retail is additionally actually sturdy, up 27.75%. That’s 29 retailers throughout Mpumalanga and KZN, partly pushed by fertilisers and fertiliser worth will increase. Are you seeing vital inflationary strain throughout the enterprise, and can you cross that on to clients?
EDDIE FIVAZ: Yes, clearly we have been capable of cross on the costs to clients. Luckily the value of fertiliser [has] come down since then. But fortunately the 2022 harvest season was excellent. So the farmers have been capable of handle that.
There’s additionally a very good expectation for income certainty of farmers in 2023, given the elevated Safex (South African Futures Exchange) commodity costs and additionally the expectations of excellent rain.
So they have been capable of take up the upper fertiliser costs. We see them coming down now. And additionally we count on that the volumes of fertilisers and fertiliser gross sales from our branches will enhance within the new season, as a result of the farmers have been capable of scale back their utility in 2022 nevertheless it’s solely actually brief lived. They can’t proceed with that. So we count on they are going to proceed with regular purposes that can clearly assist quantity gross sales, however at decrease costs and margins.
SIMON BROWN: Okay. Motor and tyres. We noticed tractor gross sales for October earlier within the week at a 40-year excessive. You don’t promote tractors, you promote Isuzu, you promote Toyota and the like. But one of many challenges with the motor sellers has been merely provide of autos. Has that normalised? Did it normalise in the direction of the tip of the interval?
Read: Toyota resumes manufacturing at its plant in Durban
EDDIE FIVAZ: Yes, we do promote tractors as properly. We really [sell] New Holland tractors. There was a rise in gross sales from that as properly. But to reply your query, fortunately we not solely promote Toyotas: we even have the Isuzu and Haval manufacturers in our enterprise. So that basically helped. Some of the merchandise have come by way of now, so we’re capable of provide particularly the lower-end fashions. We count on extra volumes to come back by way of by the start of the brand new yr, from February. It’s nonetheless a wrestle, however we count on the volumes to be again to regular from February 2023.
SIMON BROWN: A final query, trying ahead and having learn the report launched. The future’s unsure and we have now inflation, we have now [US mid-term] elections, we’ve bought warfare in Europe and the like, however usually the enterprise appears very properly positioned for not less than the subsequent – if not past that – monetary yr.
EDDIE FIVAZ: Absolutely, sure. Like I stated, we count on the volumes of exports to be at excessive ranges, the very best ever. We are actually positioned with a robust stability sheet, money flows, and assist from totally different banks. We do have the liquidity. So sure, we’re [well] positioned for the brand new monetary yr. We are stuffed with vitality and we consider that we will preserve the momentum of the final yr.
SIMON BROWN: We’ll depart it there. Eddie Fivaz, CFO at TWK, I admire the time.
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