Agra warns of tough year ahead as FMD disrupts livestock sector

CHAMWE KAIRA

Agra Limited expects a challenging financial year ahead as foot-and-mouth disease (FMD) restrictions on livestock movements, product transportation and auction activities put pressure on farmers’ cash flows and agricultural trading activity.

The company said the uncertainty surrounding the duration of the restrictions, future disease management measures and market reactions once normal trading resumes would contribute to a difficult operating environment.

The warning comes after Agra recorded the strongest financial performance in its history for the year ended 31 July 2026, with revenue increasing by 11.7% to N$3.14 billion and profit after tax rising by 26.1% to N$145.3 million.

“The implications for farmers, rural communities and businesses that support the agricultural value chain, including Agra, are significant,” the company said.

Agra said restrictions resulting from the FMD outbreak in September 2026 had disrupted a key source of income for livestock producers and related businesses, including AgraAuctions.

The resulting pressure on farmers’ cash flows is expected to affect spending patterns and trading activity across the group’s operations.

Agra said it would continue supporting the agricultural community where practical and commercially responsible, while protecting its own sustainability through prudent credit management, disciplined risk controls, cost management and a focus on cash flow.

Despite the near-term challenges, the group said it remained confident in the resilience of Namibia’s farming community and the long-term prospects of the agricultural sector.

It plans to continue diversifying its income streams to reduce earnings volatility and strengthen its long-term sustainability.

The outlook follows a strong financial year in which Agra’s operating profit increased by 28.2% to N$199.2 million, from N$155.4 million in 2025.

Gross profit rose by 13.5% to N$631.5 million, supported by revenue growth, improved operational efficiency, margin management and disciplined cost control.

The company attributed its record performance to its strategy of diversifying revenue streams and expanding its services, as well as the recovery and growth of Namibia’s livestock sector.

Favourable rainfall and improved grazing conditions across large parts of the country supported activity during the financial year and up to the FMD outbreak.

Agra’s basic earnings per share increased to 142.24 cents from 112.84 cents, while headline earnings per share rose to 139.34 cents from 112.33 cents.

The group’s net asset value increased to N$923.7 million from N$802.6 million, while net asset value per share rose to N$9.04 from N$7.86.

Agra’s share price increased by 14.5% to N$4.41 as at 31 July 2026, delivering a total shareholder return of 21.9%, including dividends declared during the period.

The company also expanded and diversified its operations during the year through the launch of SureTech, a specialised agricultural and residential security business, the refurbishment of its Omaruru branch and the introduction of a 24-hour GoAgra convenience store in the town.

It also introduced tyre fitment services at selected branches. After year-end, the group expanded its national footprint by opening new branches in Stampriet, Oshakati and Swakopmund.

On 23 October 2026, Agra declared a total and final dividend of 28.50 cents per ordinary share for the year ended 31 July 2026, up from 22.50 cents per share in the previous financial year.