- Profit declined by 46%
- Revenue decreased to ZW$1.9 billion
- Bulk tea exports increased 14%
Harare - Tanganda Tea Company Limited registered a 46% decline in inflation-adjusted profit to ZW$348.1million for the half-year ended 31 March 2022 as it was affected by the disparities between an increase in production costs and movement in the exchange rate.
The decrease in profit is from the comparative same period in the prior year of ZW$647.36 million.
“Profitability was adversely affected by the disparities between the increase in production costs and movement in the exchange rate. The exchange rate depreciated by 69% during the period under review versus year-on-year inflation of 73%,” Chairperson Herbert Nkala said in a statement accompanying the Company’s financial results.
Revenue for the period was 7% down to ZW$1.9 billion from a comparative ZW$2.06 billion.
“Timing of revenue recognition from the export of macadamia nuts has resulted in the seeming decline in revenue. The macadamia export market is gravitating towards kernel instead of the traditional nut in shell and the revenue from these exports will be recognized in the second half of the financial year,” Nkala said.
Meanwhile, bulk tea production for the period of 5 935 tonnes was 12% below prior year production of 6 762 tonnes due to dry weather experienced in December 2021 and February 2022. However, bulk tea exports at 3 747 tonnes were 14% above 3 278 tonnes sold in the comparable period of last year.
“The export average selling price firmed up slightly to US$1.43 per kg from prior year average selling price of US$1.41 per kg,” Nkala said.
Tanganda’s coffee exports grew by 14% to 96 tonnes from 84 tonnes achieved in the prior year with the average export selling price remaining firmer at f US$6.67 per kg from US$6.50 realised in the prior year.
Avocado and macadamia harvest commenced in earnest at the end of the reporting period with yields expected to increase with enhanced maturity profiling of plantations over the next three to five years.
Nkala further highlighted that the solar plants constructed at three of the Company’s five estates have significantly reduced reliance on power from the national grid and further benefits from the investment are expected to be fully realised once full reticulation and net metering have been implemented before the end of 2022.
Going forward, the Company has invested in new machinery at the packaging factory in Mutare in line with its value addition strategy and factory conversion efficiencies. The investment is expected to grow volumes in the regional market.
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