Diversified agriculture and forestry company TWK Investments says its results for the year ended August 31 reflect the unusual and challenging trading environment it experienced throughout the year, with earnings before interest, taxes, depreciation and amortisation (Ebitda) for continuing operations having decreased by 0.9% year-on-year to R589-million.

The group’s headline earnings a share decreased by 3.9% year-on-year to 674.17c, while its return on equity increased to 6.9% from 4.5% in the prior financial year.

TWK has timber, retail and mechanisation, financial services and grain segments, across the country, with the timber segment having had the greatest impact on the group’s earnings following a fire incident at a neighbouring facility to TWK’s facility in Richards Bay and prolonged financial strain on consumers on the back of high interest rates.

The timber segment’s Ebitda declined by 14% from R402-million in the prior year to R345-million in the reporting year, as did the Ebitda margin, which dropped from 13.77% to 11.55% over the same period.

Total timber sales volumes decreased by 40.3% year-on-yar to 917 819 t, largely owing to the Richards Bay fire and lower demand in the industrial and mining timber markets.

Ebitda in the retail and mechanisation segment increased by 305% year-on-year to R39-million, while the Ebitda margin also increased from 0.32% to 1.35% in the year under review.

The financial services segment had Ebitda increase by 22% year-on-year to R132-million with new client acquisitions having contributed to an increase in insured clients; however, this was offset by a decline in insured hectares and tree area.

The grain segment’s Ebitda increased by 17% to R65-million in the reporting year, which TWK attributes to operational performances in the grain storage and grain marketing businesses.

While TWK’s financial position was strained in the reporting year, its net asset value per share nonetheless increased by 8.3% year-on-year to R58-million. Additionally, TWK reduced its gearing from 129% at the end of August last year to 112% at the end of August this year.

TWK CEO André Myburgh says the group remains cautiously optimistic about the new financial year. “Although positive sentiment has given us renewed optimism, the cyclicality of our business remains a risk,” he adds.

Myburgh says TWK remains committed to achieving sustainable growth for its stakeholders through gaining market share and increasing profitability.

“The focus remains on improving our liquidity and cash flow, and where possible, cost-saving measures to ensure that all our operations are effective and efficient.

“We will continue to make the tough decisions necessary to protect and enhance our business’ resilience and sustainability, looking beyond our current situation to the future we wish to create.”