27 Jan 2015 07:00
27January 2015
AfriAg plc
("AfriAg" or the "Company")
Six month update on AfriAg SA and AfriAg Marketing
Record air freight and solid trading performance in Marketing Division
AfriAg (AIM: AFRI) is pleased to provide an update on the perishable airfreight tonnages flown by its 40%-owned specialist African agri-logistics group AfriAg SA (Pty) Ltd ("AfriAg SA") and an update on its 100%-owned AfriAg Marketing division for AfriAg's 6 month period from 1 July 2014 to 31 December 2014.
AfriAg SA - Update:
A record half year of air freight with a total of approximately 1.074 million kg of perishable produce transported by AfriAg SA for the second 6 month period of 2014 from 1 July to 31 December;
· This represents a 65% increase over the 650,000 kg airfreighted over the previous 6 months, and a 7% increase over the 1.0 million kg airfreighted over the same period in 2013; and
· The drop in the oil price is having a positive effect on both divisions of AfriAg's business.
The majority of these perishable goods were trucked by AfriAg SA's fleet of refrigerated trucks from farming and fishing operations in Mozambique, Zambia, Zimbabwe and South Africa and exported from Africa to Europe and Asia from Johannesburg and Cape Town international airports.
The main perishable goods flown to Europe included mange tout, sugar snaps, baby corn and chillies with hake, langoustines and lobsters comprising the main airfreight in to Asia.
AfriAg Marketing - Update
AfriAg Marketing (Pty) Ltd ("AfriAg Marketing") was set up in August 2014, as a 100%-owned subsidiary of AfriAg plc, to focus on the export and import of perishable food products, with first orders of seafood received in September 2014.
Maiden unaudited management accounts for the 6 month period of 2014 from 1 July to 31 December 2014 recorded total turnover of ZAR 6.79 million with a gross profits of ZAR 0.86 million and a net profit of ZAR 0.26 million.
The first period of activity for this new division has proved to be positive. The board expects that if this division continues to grow in line with management's expectations, it will mature into a key division and ultimately generate significant revenue and profit on a consistent basis for the Company. In seeking to build towards achieving that objective AfriAg Marketing will be working in the first quarter of 2015 to entrench supply agreements of seafood products with more significant deliveries expected as the year progresses. Whilst the initial focus has been on fish products, the scope will expand into other sources of food protein from Southern Africa into European, USA and Far East markets as well as trading value added items from China into Africa.
AfriAg Marketing's initial focus has been nurturing the relationships the team has in the lucrative Asian markets, starting with seafood exports from South Africa and the supply of Brama (angelfish) to markets in China towards the end of the 2014 catching season. These trial shipments were well received, and the directors expect this should lead to clients placing more substantial orders for the 2015 season, which will start in July.
Our first containers of value added hake products were successfully delivered to southern China in late 2014 and further orders have been received for delivery post Chinese New Year 2015. The directors intend that the current customer base in Guangzhou will be expanded initially into the Shanghai region, followed by Beijing. Our marketing team is at an advanced stage of concluding supply agreements of various South African products into 2 large retail groups in South Korea.
Shipments of high value langoustines were successfully delivered via airfreight into Switzerland and we expect to see stronger demand for this product for the 2015 season. Langoustines have also been shipped via sea freight to clients in China, Singapore and Hong Kong.
Domestically in South Africa, in collaboration with existing clients, we are preparing to begin supply of private label seafood products to one of Africa's biggest retailers in April and expect this account to show good performance during 2015.
David Lenigas, Executive Chairman of AfriAg, commented:
"AfriAg has seen a very solid performance in operations over the period and expects to see robust growth for the year ahead. The drop in global oil prices is improving performance on both the trucking and airfreight components of the business."
"The developments at AfriAg Marketing are especially pleasing and, although it is early days for this business, we see a strong future for growing exports of southern African perishables globally."
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For further information please contact:
AfriAg plc: +44 (0) 20 7440 0640
David Lenigas
Donald Strang
Nominated Adviser and Broker:
Cairn Financial Advisers LLP +44 (0) 20 7148 7900
James Caithie / Jo Turner / Carolyn Sansom
Public Relations:
Square1 Consulting +44 (0) 20 7929 5599
David Bick
Mark Longson