- TSL reported a 9% revenue decline in Q1 2025, primarily due to delayed rainfall affecting its agriculture division
- Despite the revenue drop, profits increased due to aggressive cost-cutting measures implemented in late 2024
- The animal health segment saw a revenue tripling, while logistics results were mixed, with general cargo storage significantly up but port operations weakened
Harare- Tobacco Sales Limited (TSL) reported a mixed performance for Q1 2025, ended 31 January 2025 with a notable 9% revenue decline across its operations, primarily due late inset of rainfall which affected flagship agriculture unit.
However, the company achieved a profit increase, driven by aggressive cost-cutting measures implemented in late 2024.
The 9% drop in revenue was heavily influenced by delayed summer rains, which disrupted TSL’s agriculture division, Agricura. Crop chemical sales fell as farmers scaled back purchases following a drought in 2024, leading to an 8% revenue decrease for the unit.
Despite improved rainfall in January and February, recovery is not expected until Q2.
Despite the revenue setback, TSL’s profits rose sharply, due to stringent cost reductions initiated in late 2024. These measures offset weaker sales and provided financial stability.
“Group profit was, however, significantly ahead of the previous year as a result of cost containment measures implemented towards the end of the 2024 financial year.,” the group said in a trading update.
The 2025 tobacco season started eight days earlier than in 2024, raising hopes for a strong Q1. However, sales disappointed, reaching only 11 million kilograms by March 14, compared to 15 million kilograms in the same period last year.
Tobacco logistics handling also dropped by 34%, as merchants wound down operations early after last year’s lean harvest.
Not all divisions struggled. TSL’s animal health segment saw revenue triple, fuelled by a new plant launched in November 2024. Meanwhile, real estate performed strongly, with occupancies rising 7%, delivering consistent returns amid the broader downturn.
Logistics results were uneven. General cargo storage soared by 66%, driven by fertilizer stockpiling for Q2, and FMCG handling grew with new clients.
However, port operations weakened due to unrest in Mozambique, with full container lifts down 66% and empty lifts off by 10%. Forklift hire hours also declined by 11%.
TSL continued exiting non-core businesses, closing its farming operations on October 31, 2024, and planning to shutter its car rental unit by March 31, 2025. These moves aim to streamline focus on higher-performing segments.
While cost cuts buoyed profits, the 9% revenue decline reflects persistent challenges, including weather disruptions and a cautious tobacco market. Animal health and real estate offer growth, but TSL’s Q1 2025 results reflect a company tackling a complex and uneven recovery.
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