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A tough season marked by one of the worst droughts in more than five decades has put pressure on NWK Limited’s bottom line — but the company remains optimistic that better times are on the way.
Although the Lichtenburg based company’s group income rose by R156 million to just under R6 billion for the 2024/2025 financial year, profit after tax dropped by 50% to R114,3 million. The decline comes as no surprise given that grain receipts were down by 43,4% compared to the previous year. It’s a direct result of severe drought conditions that stretched across NWK’s operating area — making it the driest season in 52 years and the worst since 2012.
Dry grain bins take their toll
The impact was most visible in NWK’s Grain division, where income dropped by R349 million to R572 million — the lowest since 2016/2017. “Many of our silos that hadn’t been empty in four years are now bone dry,” the group noted. Consequently the low throughput also affected the company’s logistics division, where a 35-truck fleet — mostly used to haul grain — saw reduced activity and lower capacity use.
One bright spot in logistics was the expansion of fuel transport services. Since December 2024, four new tankers have been added to supply NWK Retail and silo fuel sites.
Cash-strapped producers spend less
The knock-on effect of the dry season was felt throughout NWK’s Trade division, where profit declined by R7 million to R67 million, and turnover dropped 11% to R3,386 billion.
“Farmers had to tighten belts,” NWK reported, with several major input categories showing reduced sales. Fertiliser sales dropped due to a late switch from maize to sunflower. Livestock feed sales also slowed, ironically, due to improved rains early in 2025 that boosted natural grazing.
Fuel sales were down as well, not only because producers bought less, but also due to softer prices over most of the year. Solar installations also took a knock as fewer customers felt the need for backup power thanks to a decline in Eskom load-shedding.
NWK Mechanisation had a particularly tough year, with net sales plummeting by 38,7%. Poor yields led to lower demand for whole goods, and second-hand machinery values had to be adjusted downward to reflect market oversupply.
Still, the company remains bullish. “Better climatic conditions expected for the 2025/2026 season should bring much-needed relief to producers and improve trade conditions,” NWK said.
Epko steps up
One of the big wins of the year came from NWK’s sunflower oil press, Epko, which turned in a record profit of R87 million.
Despite the dry season, sunflower crops delivered good oil and protein content, and a new power line helped ensure consistent processing. The company now looks forward to ramping up production even more, with a new refinery expected to be fully operational in the coming season.
Solid financial footing
NWK’s equity stands at R2,1 billion, with a net asset value of R21,14 per share. The board declared a dividend of 48 cents per share for the financial year.
Group CFO, Alf White, remains upbeat, “Thanks to NWK’s conservative financial management and strong partnerships in the sector, we’re well positioned to help our producers make the most of the upcoming season. We wish them strength and success.” – NWK press release reworked by Plaas Media
