TWK Investments is not a classic agricultural counter like its sector compatriots KAL Group (listed on the JSE) and Senwes, which IM has covered extensively over the years.
Aside from the traditional agricultural interests in grain and farm requisites, from selling fertiliser and tractors, TWK has a growing financial services element. But one of the key businesses within TWK relates to timber, plantations and the production of wood chips for export into the global paper and pulp market.
In 2025, the company cultivated 36,117ha of forestry and produced 530,000t of wood chips, with the timber subsidiary generating revenue of R2.53bn, or 28% of total group revenues. This is a far cry from TWK’s peak, when up to 900,000t of chips could be exported.
Listed agricultural companies, by their very nature, are often subject to factors above and beyond their control, mostly Mother Nature and incidents often classed as acts of God.
TWK Investments listed on the Cape Town Stock Exchange (CTSE) in September 2021 at R35, which rapidly rose, alongside earnings growth, to a peak of R56 by November 2024. Then the wheels fell off the metaphorical tractor.
IM wrote its most recent article on TWK back in February 2023, when the counter was trading at R50. Back then, with robust farm revenues and a buoyant agricultural grains and timber business, prospects looked sound.
Fast forward into late 2023 and 2024 and a dry period led the domestic maize harvest to plunge 22%, hitting sector volumes and revenue, while a major fire at the NCT woodchip facility in Richards Bay, the main export hub for domestic woodchip producers, had a severe impact on the value chain and supply chain logistics of the sector.
TWK, where woodchip exports are a material component of the timber unit, was spared the fire. However, the smoke and ash contaminated stocks, leading to the product being unsuitable for the virgin paper and pulp market. This slammed results in 2024 and into 2025; the export channel was further splintered by low global pulp prices and a materially stronger rand.
When weak results to end financial 2024 were reported, the TWK share price tanked in tandem with markedly lower profits and earnings. TWK’s share price is down 71% from those highs and is now trading at R14.60.
The recently released results to August 2025 still showed a gloomy picture for TWK, though a glimmer of recovery was evident.
Revenue for the year was flat at R9bn with operating profit falling 61% to R225m, mainly from significant pressure within timber. Total timber sales volumes declined 40.3% year on year to 917,819t, due largely to the Richards Bay fire and lower demand in the industrial and mining timber markets. Financial services and grain delivered strong performances, as there was a rebound in grain production volumes. For the year, TWK reported a loss of R2.3m. Net asset value fell 3% to R55.36 and no dividend was declared.
A heady cocktail of restatements in land, property and biological assets from prior accounting treatments, which were seen in a new financial regime to be errors, led to TWK updating its policy, which, alongside exiting some assets, saw the stock report a loss of 40c a share. However, continuing operations saw earnings of 213c a share (-79%).
After two consecutive years of earnings declines, TWK is undertaking a reset and restructuring. Assets such as a motor dealership and some plantation assets that no longer form part of the new alignment are to be sold. The paper and pulp market is expected to be weak; thus, TWK is looking at new market categories for its products. Interestingly, mining timber has rebounded.
Smaller, nonproductive plantations were sold and in late January TWK announced the acquisition of MTO Forestry North for R409m. The deal brings 20,000ha of plantation and 366ha of macadamia orchards, enabling TWK to gain economies of scale, new product markets (timber poles) and extend its timber operating leverage.
With interim results to February 2026 ahead, IM awaits an operational update on current performance given the material tree-shaking within TWK over the past months. At R14.60, the worst may be over for TWK. But with blood still in the earnings sawdust, IM would prefer the comfort of seeing the sapling of earnings growing again before planting cash into TWK for recovery.
Anthony Clark
The writer holds shares in TWK
