62 INTEGRATED ANNUAL REPORT 2026 NCT Forestry Agricultural Co-operative Limited and its subsidiaries (Registration number: 1949/000002/24) Consolidated & Separate Annual Financial Statements for the year ended 28 February 2026 Directors' Report 2. Review of financial results and activities (continued) The co-operative purchased 1,992,266 tonnes of timber from members and suppliers during the year under review. These were sold into local markets and supplied to group mills. Richards Bay Woodchips (RBWC) mill chipped 423,212 green metric tonnes (GMT) (2025: 266,763) of timber. BayFibre mill contracted to RBWC to chip 537,170 GMT (2025: 229,650) of timber. RBWC exported 22 vessels (2025: 8) comprising 691,561 bone dried tonnes (BDT) (2025: 241,639) to 4 customers in Japan and China. In addition a further vessel was loaded on behalf of a local exporter comprising of their timber chipped at RBWC as well as 1,909 GMT (2025: 2,977) from RBWC stock. Durban Woodchips mill contracted DWC PL to chip 577,826 GMT (2025: 394,259) and load 406,686 BDT (2025: 248,290), exporting 13 shiploads to 3 customers in Japan and China. The major contributors to the co-operative's results are: - Insurance proceeds of R33,5 million of which R33,3 million relates to the Richards Bay fire (2025: R280,7 million) - Net financing income of R16,3 million (2025: R16,0 million) - Dividends of R69,3 million, of which R68,1 million were from group entities (2025: R1,2 million) - Profit reported by NCT's farms, before plantation adjustments, of R47,0 million (2025: R19,7 million loss) - Unfavourable fair value adjustments to NCT's own and leased plantations of R85,7 million (2025: R71,8 million) - Net foreign exchange gain of R29,9 million (2025: R12,8 million loss) - Impairment of the investment in Shield Overall Manufacturers (Pty) Ltd (Shield) on deregistration of ShinCel (Pty) Ltd (ShinCel) of R33,8 million - No members' bonus (2025: nil) is proposed for the current year. ShinCel has been deregistered and final dividends paid out to NCT and Shield. Shield has declared their dividends on to NCT and the investment in Shield has been impaired to reflect that there is no longer any remaining value in this subsidiary. The directors intend to deregister Shield in the new financial year. The co-operative posted a profit for the year as a result of operations returning to normal levels and a weak exchange rate early in the year, reaching close to R20 : USD. As the year progressed and the exchange rate strengthened to levels previously seen in 2022, the profit was eroded as the directors held prices steady as long as possible. The final tranche of insurance proceeds and the group dividends have kept the co-operative profitable. The group results are a loss after the elimination of the group dividends and including subsidiary farm losses. Property, plant and equipment has again increased over the prior year with the final costs of the rebuild and the upgraded fire reticulation system, which is almost complete. Biological assets have decreased due to the reduction in prices and higher direct costs, despite reduced harvesting and ageing timber. Co-operative investments show a marked decrease as Shincel has been deregistered and the value of the investment in Shield impaired. This has also resulted in a decrease in group loans. Mill inventories were lower at year end due to the timing of ships, which also impacts the debtors balance, while Umlaas road depot came on-line, increasing depot stocks at year end. The Enyathi farm loan and the finance lease liability in DWC PL have been repaid with only the rebuild loan remaining. 3. Directors The directors in office during the year under review are as follows: Directors Changes AV Schefermann (Chairman) AE Mason (Vice-chairman) BS Bhengu PB Day retired 30 July 2025 AP Gibbs retired 30 July 2025 HD Hinze appointed 30 July 2025 C Hohls NC Motloli HG Niebuhr G Payn JW Stegen J Rees BA Seele
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