Harare – Agro-Industrial group, TSL Limited has issued a trading update for the third quarter ended 31 July 2019 affirming the Group’s financial position remains “sound” but highlighted the negative impacts of the existing macro-economic challenges where rising inflation has resulted in subdued consumer demand and eroded disposable incomes.
In addition, acute fuel and electricity shortages are also impacting business operations resulting in the loss of productive hours.
“These factors combined, made for a very difficult operating environment,” the Group said in a statement.
“Strategies are being actively deployed to protect the value of the company and deliver value to stakeholders.”
This performance is reflective of the Group’s half year performance ended 30 April 2019 were it recorded a 74% increase in revenue to RTGS$36.8 million from RTGS$21.2 million recorded in the same period last year.
For the period under review, the Group said contract volumes at Tobacco Sales Flour were up 34% owing to a new merchant being signed up while independent crop volumes were at similar levels to prior year.
However, Propak Hessian’s volumes in the quarter were 13% down on last year as a result of the slower processing of tobacco.
Volumes at Agricura were reported within a range of between 50% and 90% behind prior year depending on the product category attributable largely to reduced consumer spend and smaller hectarages planted given the low dam levels as a result of the drought.
“Focus has been on stocking for the summer season and the business is well positioned in this regard,” the Group said.
Updating on farming operations, the Group indicated that yields for all crops were higher than prior year given the thrust to only grow irrigated crops.
On logistic operations, volumes at Bak Logistics were up 41% on prior year attributed to increased activity from fertiliser importers who took advantage of the new value-add services.
“Tobacco volumes handled for existing and new merchants increased by 73% due to new customers signed on,” the Group said.
“Volumes in the ports business more than doubled as a result of additional customers being signed on.”
However, the distribution business experienced a 39% decline in volumes reflective of eroded disposable incomes and reduced consumer spend.
Premier Forklifts volumes were up 29% due to the signing up of new non-tobacco related customer while Key Logistics experienced a 10% decline in customs clearance volumes constrained by lack of access to foreign currency.
The Group said void levels at real estate operations remain satisfactory at under 4% and occupancies during the period under review were at the same levels as in prior year.
Going forward, the Group said it will continue to position itself to take advantage of the opportunities for growth in pursuit of the “moving agriculture” strategy.
“We will continue to invest in our people, upgrading our infrastructure, market presence, developing our technology platforms and leveraging on our local and international partnerships,” it said.
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