News Column

A healthier Land Bank reaps 29% more profit

August 19, 2014

The Land Bank recorded net profit of R394.3 million in the 2013/14 financial year, a 29.4 percent increase from the previous financial year, it said in its annual report released yesterday.

This was an increase of R89.7m from its net profit of R304.6m in |the 2012/13 financial year, acting Land Bank chief executive Lindiwe Mdlalose said.

The loan book grew from R26.5 billion in 2012/13 to R33bn in the |period under review.

Investment income increased marginally, from R53.6m to R56.3m.

Non-trading and capital items improved from a net loss of R10.1m in 2012/13 to a profit of R9.5m in the year under review.

Mdlalose, pictured, said the agricultural sector's performance showed an improvement in the period to December last year, compared with the previous year. The gross value of agricultural production last year was estimated at R187bn. This was an increase of 8.5 percent over the previous year's R172bn.

Total farming debt increased by 15.5 percent.

Mdlalose said South Africa continued to be a net exporter of agricultural products. "The value of trade was R72bn for exports, against R57bn for imports."

She said that while the agricultural sector performed positively in general, some parts of the country had experienced adverse weather, such as drought.

"The effects of drought experienced by the sector during the previous season have been evident in tight grain stock supply, with the need to increase maize imports," she said.

"As supply improved during the course of the season, maize prices have subsequently subsided from levels seen earlier in the season on the back of favourable crop forecasts for the 2014 season."

Mdlalose said wheat prices remained "bullish" due to production |disruptions related |to "developments in Ukraine".

Ukraine is the world's largest producer of sunflower oil and is a major global producer of grain and sugar. In 2011, Ukraine was the world's third-largest grain exporter with that year's harvest being much larger than average.

At the end of last year, protests erupted in Ukraine, with citizens calling for the resignation of President Viktor Yanukovych.

Mdlalose said the Land Bank's future relied on the success of farmers and agri-businesses.

"The Land Bank has an important role to play in improving the number of sustainable emerging farmers entering the commercial space, while continuing to support commercial farmers to ensure they remain competitive," she said.

"Our healthy financial outlook… enables us to attract other potential investors and multilateral funders at relatively competitive rates. Such presents the bank with an opportunity to competitively increase its investment in the sector."

Meanwhile, a new Land Bank chief executive would probably be appointed next month, board chairman |Ben Ngubane said yesterday.

"When assessments are completed, we will send recommendations to National Treasury and they will give the final stamp of approval," Ngubane told reporters.

"It should be in early September."

He said a number of professionals from different backgrounds had applied for the job, and a rigorous interview process was carried out. Short- listed candidates were undergoing assessments.

"It's almost complete. When it's done, we will send recommendations to Treasury."

In December, Phakamani Hadebe stepped down as the bank's chief executive officer. Hadebe was transferred from the National Treasury to the Land Bank in 2008 and was subsequently appointed chief executive of the bank. - Sapa

Cape Argus

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Source: Cape Argus (South Africa)

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