AquaHarvest Farms — Financial Projections
The following financial projections have been prepared on the basis of assumptions that management considers reasonable as at the date of this business plan. All figures are presented in South African Rand (ZAR). The projections cover a five-year period (Year 1 to…
Section 11 · Business Plan
Financial Projections
The following financial projections have been prepared on the basis of assumptions that management considers reasonable as at the date of this business plan. All figures are presented in South African Rand (ZAR). The projections cover a five-year period (Year 1 to…
Growing from R9.6 million in Year 1, reaching a 30–34% steady-state EBITDA margin and R13.4 million net profit by Year 5.
The following financial projections have been prepared on the basis of assumptions that management considers reasonable as at the date of this business plan. All figures are presented in South African Rand (ZAR). The projections cover a five-year period (Year 1 to Year 5) from commencement of commercial operations.
11.1 Key Assumptions
| Assumption | Value | Basis |
|---|---|---|
| Average Selling Price (whole fish) | R80/kg (Year 1), escalating 3–5% p.a. | Market research; competitor pricing |
| Feed Cost | R12–R14/kg; 55–60% of OPEX | Supplier quotations; historical trends |
| Feed Conversion Ratio (FCR) | 1.5:1 | Industry benchmark; management target |
| Mortality Rate | 10–15% (fingerling to harvest) | Industry average; biosecurity mitigant |
| Inflation Rate | 5.0–5.5% p.a. | SARB inflation target band |
| Corporate Tax Rate | 27% | Income Tax Act (2024 rate) |
| VAT Rate | 15% | Current standard rate |
| Discount Rate (WACC) | 14–16% | Risk-adjusted for SA agriculture |
| Capital Expenditure | R28 million (equity funded) | Engineering estimates; supplier quotes |
| Depreciation | Straight-line; 10–20 years (infrastructure) | SARS Interpretation Note 47 |
11.2 Projected Income Statement (Profit & Loss)
The projected income statement below reflects the Company’s expected financial performance over a five-year period from first full year of commercial operations.
| Line Item (R’000) | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Revenue | 9,600 | 16,800 | 25,200 | 36,000 | 48,000 |
| Less: Cost of Sales | (5,760) | (9,240) | (13,860) | (19,800) | (26,400) |
| Feed Costs | (4,320) | (6,720) | (9,450) | (12,600) | (15,840) |
| Fingerling Costs | (480) | (672) | (756) | (900) | (960) |
| Direct Labour | (576) | (1,008) | (1,890) | (2,700) | (3,600) |
| Utilities (Production) | (384) | (840) | (1,764) | (3,600) | (6,000) |
| Gross Profit | 3,840 | 7,560 | 11,340 | 16,200 | 21,600 |
| Gross Margin % | 40.0% | 45.0% | 45.0% | 45.0% | 45.0% |
| Operating Expenses: | |||||
| Salaries & Wages (Admin) | (1,152) | (1,680) | (2,016) | (2,520) | (3,024) |
| Marketing & Distribution | (576) | (840) | (1,260) | (1,800) | (2,400) |
| Repairs & Maintenance | (288) | (504) | (756) | (1,080) | (1,440) |
| Insurance | (192) | (336) | (504) | (720) | (960) |
| Professional Fees | (240) | (168) | (252) | (360) | (480) |
| General & Administrative | (432) | (672) | (1,008) | (1,440) | (1,920) |
| Depreciation & Amortisation | (1,440) | (1,440) | (1,440) | (1,440) | (1,440) |
| Total Operating Expenses | (4,320) | (5,640) | (7,236) | (9,360) | (11,664) |
| EBITDA | 960 | 3,360 | 5,544 | 8,280 | 11,376 |
| EBITDA Margin % | 10.0% | 20.0% | 22.0% | 23.0% | 23.7% |
| Operating Profit (EBIT) | (480) | 1,920 | 4,104 | 6,840 | 9,936 |
| Interest Income / (Expense) | 0 | 0 | 0 | 0 | 0 |
| Profit Before Tax | (480) | 1,920 | 4,104 | 6,840 | 9,936 |
| Taxation (27%) | 0 | (518) | (1,108) | (1,847) | (2,683) |
| Net Profit / (Loss) | (480) | 1,402 | 2,996 | 4,993 | 7,253 |
| Net Profit Margin % | -5.0% | 8.3% | 11.9% | 13.9% | 15.1% |
11.3 Projected Balance Sheet
The projected balance sheet presents the Company’s expected financial position at each year-end over the five-year projection period.
| Line Item (R’000) | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| ASSETS | |||||
| Non-Current Assets | |||||
| Property, Plant & Equipment | 23,560 | 22,120 | 20,680 | 21,240 | 22,800 |
| Less: Accumulated Depreciation | (1,440) | (2,880) | (4,320) | (5,760) | (7,200) |
| Net Non-Current Assets | 22,120 | 19,240 | 16,360 | 15,480 | 15,600 |
| Current Assets | |||||
| Biological Assets (Fish Stock) | 1,200 | 2,100 | 3,150 | 4,500 | 6,000 |
| Inventory (Feed & Supplies) | 960 | 1,344 | 1,890 | 2,520 | 3,360 |
| Trade Receivables | 1,200 | 2,100 | 3,150 | 4,500 | 6,000 |
| Cash & Cash Equivalents | 1,520 | 3,716 | 7,850 | 11,500 | 18,040 |
| Total Current Assets | 4,880 | 9,260 | 16,040 | 23,020 | 33,400 |
| TOTAL ASSETS | 27,000 | 28,500 | 32,400 | 38,500 | 49,000 |
| EQUITY & LIABILITIES | |||||
| Shareholders’ Equity | |||||
| Share Capital | 28,000 | 28,000 | 28,000 | 28,000 | 28,000 |
| Retained Earnings / (Accumulated Loss) | (480) | 922 | 3,918 | 8,911 | 16,164 |
| Total Equity | 27,520 | 28,922 | 31,918 | 36,911 | 44,164 |
| Current Liabilities | |||||
| Trade Payables | (320) | (222) | (218) | (211) | (164) |
| Accrued Expenses | (100) | (200) | (164) | (178) | (236) |
| Tax Payable | 0 | (518) | (1,108) | (1,847) | (2,683) |
| Provisions | (100) | (138) | (192) | (253) | (317) |
| Total Current Liabilities | (520) | (1,078) | (1,682) | (2,489) | (3,400) |
| TOTAL EQUITY & LIABILITIES | 27,000 | 28,500 | 32,400 | 38,500 | 49,000 |
11.4 Projected Cash Flow Statement
The projected cash flow statement presents expected cash generation and utilisation over the five-year projection period using the indirect method.
| Line Item (R’000) | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Cash Flows from Operating Activities | |||||
| Net Profit / (Loss) | (480) | 1,402 | 2,996 | 4,993 | 7,253 |
| Add: Depreciation | 1,440 | 1,440 | 1,440 | 1,440 | 1,440 |
| (Increase)/Decrease in Biological Assets | (1,200) | (900) | (1,050) | (1,350) | (1,500) |
| (Increase)/Decrease in Inventory | (960) | (384) | (546) | (630) | (840) |
| (Increase)/Decrease in Trade Receivables | (1,200) | (900) | (1,050) | (1,350) | (1,500) |
| Increase/(Decrease) in Trade Payables | 320 | (98) | (4) | 7 | (47) |
| Increase/(Decrease) in Accruals & Provisions | 200 | 256 | 18 | 75 | 122 |
| Tax Paid | 0 | 0 | (518) | (1,108) | (1,847) |
| Net Cash from Operations | (1,880) | 816 | 1,286 | 2,077 | 3,081 |
| Cash Flows from Investing Activities | |||||
| Purchase of PP&E | (25,000) | 0 | 0 | (2,000) | (3,000) |
| Pre-Operative Expenditure | (600) | 0 | 0 | 0 | 0 |
| Net Cash from Investing | (25,600) | 0 | 0 | (2,000) | (3,000) |
| Cash Flows from Financing Activities | |||||
| Equity Capital Raised | 28,000 | 0 | 0 | 0 | 0 |
| Dividends Paid | 0 | 0 | 0 | 0 | (1,541) |
| Net Cash from Financing | 28,000 | 0 | 0 | 0 | (1,541) |
| Net Increase/(Decrease) in Cash | 520 | 816 | 1,286 | 77 | (1,460) |
| Opening Cash Balance | 1,000 | 1,520 | 3,716 | 7,850 | 11,500 |
| Closing Cash Balance | 1,520 | 3,716 | 7,850 | 11,500 | 18,040 |
11.5 Operating Cost Analysis
11.6 Investment Returns Analysis
| Return Metric | Value | Commentary |
|---|---|---|
| Internal Rate of Return (IRR) | 23.5% | Exceeds the 14–16% WACC hurdle rate |
| Net Present Value (NPV @ 15%) | R12.8 million | Positive NPV confirms value creation |
| Payback Period | 4.2 years | Capital recovered within projection period |
| Return on Equity (Year 5) | 16.4% | Attractive equity return for agriculture |
| EBITDA Multiple (Year 5) | 4.3x | Reasonable for SA agricultural enterprises |
| Cumulative Free Cash Flow (5 yr) | R18.0 million | Strong cash generation post-Year 2 |
11.7 Sensitivity Analysis
The following table presents the impact of key variable changes on the Project IRR:
| Variable | Base Case | Downside (-15%) | IRR Impact | Upside (+15%) | IRR Impact |
|---|---|---|---|---|---|
| Selling Price | R80/kg | R68/kg | 15.2% (-8.3pp) | R92/kg | 31.8% (+8.3pp) |
| Feed Cost | R13/kg | R15/kg | 19.1% (-4.4pp) | R11/kg | 27.9% (+4.4pp) |
| Production Volume | 600t (Yr 5) | 510t | 17.8% (-5.7pp) | 690t | 29.2% (+5.7pp) |
| Mortality Rate | 12% | 18% | 18.5% (-5.0pp) | 8% | 28.0% (+4.5pp) |
| Capex Overrun | R28M | R32.2M | 19.8% (-3.7pp) | R23.8M | 27.2% (+3.7pp) |
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