TWK Reports Revenue Growth Despite External Challenges in 2024 Financial Year
TWK, a diversified agriculture and forestry company, has reported a 7.1% increase in revenue from continued operations, reaching R8.5 billion for the year ending August 31, 2024. Despite the revenue growth, the company saw a slight decrease of 0.9% in earnings before interest, tax, depreciation, and amortization (EBITDA), which totaled R589.4 million. Headline earnings per share also dropped by 3.9%, coming in at 674.17 cents.
Impact of External Factors
CEO André Myburgh acknowledged the challenges faced by TWK in 2024, citing several external factors that impacted performance. These included a devastating fire at the NCT Woodchip Mill in Richards Bay in September 2023, high consumer debt due to interest rates, and the adverse effects of El Niño on agriculture. Despite these setbacks, TWK continued executing its strategy and maintaining operational focus.
Segment Performance Overview
The Timber segment saw a 2.37% increase in revenue, reaching R2.99 billion, but its EBITDA fell by 14.15% to R345.38 million, largely due to the five-month halt in revenue generation caused by the fire. Total sales volumes dropped by 40.3% to 917,819 tonnes, severely affecting the segment’s performance.
The Retail and Mechanisation segment faced a 3.04% decline in revenue, totaling R2.9 billion. However, EBITDA surged by 304.66%, driven by improved performance in Constantia Fertiliser. EBITDA for this segment increased to R39.04 million, up from R9.65 million in 2023.
In the Financial Services segment, revenue rose by 4.09%, reaching R283.89 million. EBITDA grew by 22.79%, to R132.93 million. The segment saw increased insurance premiums and new client acquisitions despite macroeconomic challenges.
The Grain segment, on the other hand, performed strongly with a 35.22% increase in revenue, totaling R2.38 billion, and a 17.38% increase in EBITDA, reaching R65.55 million. This growth was largely driven by Grain Storage and Grain Marketing operations.
Financial Position and Outlook
Despite the challenges, TWK’s net asset value per share rose by 8.3% to R58.56. The company reduced its gearing from 129.79% in 2023 to 112.43%, indicating a more stable financial position.
Myburgh concluded with cautious optimism for the 2025 financial year, highlighting the need to navigate the cyclicality of the business while focusing on sustainable growth. The company will prioritize improving liquidity, cash flow, and cost-saving measures to enhance business resilience and ensure long-term success.