Ukusekela is now a major contributor to Nutritional Holdings wealth
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DURBAN - NUTRITIONAL Holdings yesterday reported a surge in half-year earnings, boosted by the contribution from Ukusekela Holdings and its turnaround strategy.
Its headline earnings per share increased by 325 percent to 0.08 cents a share for the six months to end August, compared to a loss of 0.03c reported last year. The group said the pleasing recovery in financial performance reflected the progress made under the turnaround strategy and included its entrance into the cannabis industry, which allowed it to thrive in this challenging environment.
“This was supported by the efficient execution of the Ukusekela management contract that has had a strong performance with both operational and financial results for the six months despite the challenges from the Covid19 pandemic,” the group said.
Ukusekela holds an off-take agreement with one of the largest cannabis pharmaceutical companies based in Europe, which has a licence to distribute CBD oils and infused products in more than 15 countries.
The group said the global trend for cannabis sector companies has achieved triple-digit growth and this achievement further illustrated that the company was on track to mirror its global counterparts in delivering impressive profits in both the shortand medium-term.
Nutritional Holdings has two reporting segments, foods and cannabis.
Its turnover increased by 102 percent to R33.72 million and operating profit before interest and tax improved by 537 percent to R16.47m from a loss of R3.77m, while net profit surged by 325 percent to R10.63m compared to a loss of R4.73m reported a year earlier.
“The largest factor in achieving the profit must be attributed to exponential demand and resultant growth in the sale of cannabis associated products, the Ultimate Immune Booster with Cannabis Extract,” the group said.
Nutritional Holdings has since acquired Ukusekela, effective October 1 and the group was looking forward to more earnings potential from the subsidiary, which had proved to be a turning point.
Post the reporting period, Ukusekela signed an agreement for the supply of the Ultimate Immune Booster to a leading manufacturing and distribution company in Germany at the beginning of September. The three-year contract had a total value in excess of R1 billion.
In November, Nutritional Holdings and Ukusekela concluded an offtake agreement of $2m (R30.22m) a month for 24 months, which equated to R780m in total.
The group also acquired Indiva Pharma, a major CO2 cannabis extraction company, in November.
The group said these transactions were not included in the interim results and the company was confident that the second half of the financial year will deliver stronger performance with the full integration of the acquisition into the operations.
Nutritional’s shares closed flat at R0.01 on the JSE yesterday.