• Bonded warehousing fell 68% as general cargo storage rose 41% over nine months
• Revenue and operating profit each grew 8%, leaving margins broadly unchanged
• Pre-leased warehousing and Rutenga port form TSL’s replacement logistics plan

Harare — TSL Limited’s first trading update after moving to the Victoria Falls Stock Exchange shows group earnings holding through the nine months to 31 July 2026, even as a policy-sensitive part of its logistics business contracted sharply.

Revenue increased 8% to US$42.9 million and operating profit before tax also rose 8% to US$12.9 million. Agricultural trading, packaging and tobacco-marketplace activities supported the result, although the same rate of revenue and profit growth left the group’s operating margin near 30%.

The more important movement sits inside the logistics portfolio. Bonded warehouse volumes declined 68% over nine months and 90% in the third quarter, while clearing volumes fell 31% over nine months and 58% during the quarter.

TSL attributed the bonded-warehouse decline to the removal of duty on fertiliser and increased competition. The policy change reduced demand for a service that carries greater relevance where importers require duty management and delayed clearance, shrinking a logistics stream previously linked to agricultural-input imports.

Higher fuel and shipping costs added pressure by reducing shipment volumes through the clearing business. These are external changes to the economics of import handling, rather than a normal seasonal movement in warehouse activity.

General cargo storage moved in the opposite direction. Volumes increased 38% during the quarter and 41% over nine months, supported by fertiliser, sugar, sorghum and tobacco-related cargo. Space utilisation increased to 94% from 92% in the prior year.

The two volume trends change TSL’s earnings mix. General warehousing is filling capacity and supporting demand for storage services, yet the trading update does not disclose revenue, pricing or profit contribution by logistics activity. The market therefore cannot establish whether growth in general cargo has fully replaced the contribution from bonded warehousing and clearing.

That gap matters because TSL is committing capital to a new logistics platform. The group completed a 4,567-square-metre warehouse at Hubert Fox Complex in April and started construction of a further 3,433-square-metre facility during the quarter. The new warehouse has been pre-leased and is due for completion by the end of the financial year.

Pre-leasing reduces vacancy risk and gives TSL a clearer route to income from the new asset. The full return still depends on the rental rate, operating costs, tenant quality and the period required for the development to contribute to group earnings.

The Rutenga multimodal inland port adds a second element to the replacement plan. TSL expects the facility to begin operating in the fourth quarter of 2026, creating a new channel for inbound and outbound cargo flows. Its commercial contribution will depend on contracted customers, handling volumes, storage demand, rail and road connectivity, and the pricing achieved against competing logistics routes.

TSL’s move from the Zimbabwe Stock Exchange to VFEX on 6 July places this operating transition inside a USD-denominated market. The listing gives investors a clearer currency platform for valuing the group’s assets and distributions. It also raises the importance of separating recurring USD logistics income from revenue linked to construction projects, crop cycles and short-term volume movements.

The agricultural portfolio supplied part of the nine-month resilience. Agricura’s crop-chemical volumes increased 7%, while animal-health remedy volumes rose 39% over the period after new business and stronger livestock-treatment demand. Tobacco seed-pack demand weakened ahead of the anticipated Super El Niño-induced drought, showing that weather risk is already influencing parts of the agricultural value chain.

Propak faced pressure in hessian hire and tobacco-paper volumes. Hessian hire fell 2% over nine months, while cumulative tobacco-paper volumes declined 18% amid stronger competition. The business recorded revenue and profitability growth from a more favourable customer mix, although the update gives no measure of the durability of that improvement if volume pressure persists.

Tobacco Sales Floor handled 881 million kilogrammes over nine months, 10% above the comparable period, despite a 20% decline in third-quarter volumes. The lower quarterly figure followed an earlier peak in the tobacco marketing season, which brought more deliveries into the preceding period.

TSL’s outlook acknowledges that drought conditions could reduce agricultural output, weaken demand across parts of the value chain and place pressure on energy generation. The group is relying on logistics, warehousing, infrastructure and property development to carry a greater share of resilience through that period.

The central performance test now sits in the final quarter. TSL needs to show whether the Hubert Fox expansion adds rental income on schedule, whether Rutenga secures cargo throughput, and whether general warehousing produces enough earnings to offset the contraction in bonded warehousing and clearing.

The final results should also disclose logistics revenue and margins by activity, warehouse yields, pre-leased capacity coming into income, Rutenga customer contracts and throughput volumes. Those figures will show whether TSL has built a durable replacement profit pool or merely absorbed a decline in its import-logistics franchise.

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