Final Agriculture in Zimbabwe
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Transcript of Final Agriculture in Zimbabwe
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Agriculture in Africa
Team 9:Joao Simoes, Kailun Wei, Renee Lynn dela Cruz, Sahil Batra, Sameer Mehta, Xenia Hawrylyshyn
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It seems that the world cannot even feed its current population, let alone the 9 billion expected by 2050.
Possible solutions:• Increase the yields of the crops• Improve the harvest efficiency• Land expansion
Developing world is an astonishing opportunity for improvement.
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AFRICA• Fastest growing continents• More middle income
households than India• FDI increased to $62B
ZIMBABWE• Inexpensive assets like land• American dollar is their official
currency• Liberal financial exchange
control
Potential of Zimbabwe - 80% of the Investment especially in Agriculture
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Methodology
• Profitability • Liquidity• DuPont Identity and Return on Equity• Stock price fluctuations• WACC • Cash Flow statements
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Background:• One of the largest sugar producers in Africa• Produces around 50% of consumption in Zimbabwe• Dominates Local, and Exports in Europe
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• Incremental increase in their Asset Management Ratios
2010 2011 2012 2013 20140.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
Profitability Ratios Hippo Valley
Net Profit MarginGross Profit MarginReturn on AssetsReturn on Equity
2010 2011 2012 2013 20140
0.20.40.60.8
11.21.41.61.8
2
Liquidity Ratios: Hippo Valley Estates
Current Ratio Quick Ratio
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Recommendation:Do Not Invest•Highly Volatile Market
Cost and Prices
•Dependent on the Climate Change•No prospects for innovation
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Background:• Investment holding company with plantations and orchards
business• Interests in:
TeaMacadamia NutsFruits and VegetablesPoultry
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2010 2011 2012 2013 2014
-30.00%
-20.00%
-10.00%
0.00%
10.00%
20.00%
30.00%
40.00%
Profitability Ratios Ariston
Net Profit MarginGross Profit MarginReturn On AssetsReturn On Equity
2010 2011 2012 2013 20140
0.2
0.4
0.6
0.8
1
1.2
Liquidity Ratios: Ariston Holdings Ltd
Current Ratio Quick Ratio
• Weak DuPont Identity
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Recommendation:Do Not Invest•Going Concern•Highly Volatile Prices•High Risks
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Background:• Premium quality crocodiles skins and meat• Monopoly of the Niche Market• Export unique position
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• Days Sales outstanding = 31 days
_x0007_Ju
n2010
_x0007_Ju
n2011
_x0007_Ju
n2012
_x0007_Ju
n20130.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
140.00%
Profitability Ratios Padenga
Net Profit MarginOperating Profit MarginReturn On AssetsReturn On Equity
2010 2011 2012 2013 416090
2
4
6
8
10
12
14
16
18
Liquidity Ratios: Padenga Holdings Ltd
Current Ratio Quick Ratio
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Recommendations:Short Term Investment• Growing market with high profitability• Great Performance• Potential for innovation• Fashion Trends• Ethical Issues
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Background:• Grows, Processes and Distributes Tobacco• Owns 75% of the market share• Investing to enhance efficiency and productivity
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• Asset management - Inventory turnover increase
2010 2011 2012 2013 2014
-20.00%
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
Profitability Ratios BAT
Net Profit MarginGross Profit MarginReturn On AssetsReturn on Equity
2010 2011 2012 2013 20140
0.20.40.60.8
11.21.41.61.8
2
Liquidity Ratios: BATZ
Current Ratio Quick Ratio
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Recommendation:Invest in the Short to Medium Term• Efficient Management of Operation• Strong hold on the Market• Ethical Issues• Rising Health Consciousness
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Background:• Producer and Marketer of Hybrid Seeds• Sells to 15 different countries in Africa
Zimbabwe, Zambia and MalawiGovernments are the major buyers
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• Above average Days Sales Outstanding = 129 to 254 days
2010 2011 2012 2013 20140.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
Profitability Ratios Seed Co
Net Profit MarginGross Profit MarginReturn On AssetsReturn On Equity
2010 2011 2012 2013 20140
0.5
1
1.5
2
2.5
3
Liquidity Ratios: Seed Co of Zimbabwe Ltd
Current Ratio Quick Ratio
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Recommendations:Invest for the Long-term• High Potential for Innovations
• Investing in Research and Development
• Attracting investors (Limagrain, and MAHYCO)
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RecapCompany Recommendations
Hippo Valley Estates Do not invest
Ariston Holdings Do not invest
Padenga Holdings Short- Term Investment
British American Tobacco Short to Medium Term Investment
Seed Company Long Term Investment
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Final Words• Realistic financial projects with good returns• Seed Co is more than a good financial investment
• End of the era of cheap food + growing concern about how to feed the world
Opportunity to make a difference
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Thank You