But high interest costs in the group’s cotton business and slow volume growth in its fast moving consumer goods would leave the company in a loss position.
In a statement attached to the group’s interim financial statements to September, Aico Africa Ltd said: “Aggregate volumes will be higher than last year. We expect strong performance from the seed business. However, high costs in cotton and slow volume growth in fast moving consumer goods due to liquidity and working capital constraints will retard overall group performance.”
Aico management sees the company making losses in its full year financials to March, the company added.
The company said its seed business had exceeded growth targets with maize production growing 83% in the over the prior year while exports to regional countries resulted in winter cereal volumes growing by 68% in the comparative period.
Aico’s fast moving consumer goods business grew 98% but the company says it was “off a low base.”
Management says the division’s performance has been hamstrung by liquidity problems in the market.
Despite good demand in the Aico’s Spinning division, the operation did not benefit from rising international list prices.
“Demand for the company’s products is good. Sales volumes were 30% ahead of last year. Though prices were higher than last year, they lagged behind increases in the global prices of lint resulting in thin margins,” added Aico.
The group also announced it was pursuing a capital raising move but said it would brief the market when plans come to fruition.
A number of companies on the market have been floating issues to raise capital after hyper inflation wiped off working capital. Aico Africa Ltd is a diversified entity which has interests in cotton processing and growing, fast moving consumer goods and spinning posted US$11,7 million pretax loss.
“Group performance has been disappointing with losses forecast in Cottco, Olivine and Scotto,” the company said.