- Delay is to give auditors more time to conclude the financials
- Results will be out on or before the end of February 2023
- Based on the aggressive economic measures employed during the period, TSL is likely to post a profit, however narrowed one
The graph below shows the Company’s profit movement in %. Where profit was increasing, it did so on a decreasing rate.
Harare- The Zimbabwe Stock Exchange (ZSE)- listed outfit, TSL Limited says it will delay the publication of its full-year results for the fiscal year ended 31 October 2022 to give auditors more time to conclude the financial statements.
In a circular, the Company said results will be expected to be published on or before the 28th of February 2023.
In terms of section 39 (1), of the Securities and Exchange, ZSE-listed companies are required to publish audited financial statements not more than three months after the end of their financial years, thus, TSL was supposed to publish the full-year financial results on or before end of January 2023.
“TSL Limited will publish its Financial Statements for this period on or before the 28th of February 2023 and the delay has been necessitated by challenges experienced by our external auditors in closing their year-end audit,” the Company said in a circular.
“The Company regrets any inconvenience this may cause to our valued stakeholders.”
TSL profit trends since 2019
Since the introduction of the Zimbabwe Dollar in 2019, the Company has been recording high revenue, increased costs and big net profits. However, during the half year ended 30 April 2022, the Company posted a narrow revenue growth of ZWL3 billion from ZWL2.9 billion with a huge chunk of revenue eaten by net finance costs and income tax charges which were mostly either increasing on n increasing rate or decreasing on an increasing rate.
During that period, finance costs plummeted to ZWL159 million from ZWL102 million in the previous comparative period while income tax charges soared to ZWL350 million from ZWL225 million in the comparative prior period. This means the costs soared by 56% respectively.
Resultantly, profit after tax for that period by 19% from ZWL918 million in 2021 to ZWL741 million.
During the third quarter ended 31 July 2022, the Company posted mixed performance, with ups and downs though the upward performance was dominant. However, revenue was up 61%, which might be one of the best quarterly performances.
During the period to the fourth quarter of the Company (July to August 2022), the government implemented aggressive policies which are meant to buttress Zim dollar performance and curtail inflationary pressures. Though the policies curtailed consumer purchasing behaviours and productive borrowing, inflationary pressures and exchange rates during the period gained momentum.
Since 2019, costs for the Company have been moving at a faster rate than profit movements the same with revenue over costs. This means the Company’s costs-cutting strategies are are being overshadowed by the volatile operating environment, limiting the Company’s profiting full capacity.
Despite a slowdown of inflation and exchange rate volatility during the period to October 2022 accompanied by a tight monetary stance, the Company’s costs are unlikely to either decrease or increase or either increase on a decreasing rate.
However, with the stable inflation and exchange market during the period, the Company is likely to post a profit than a loss benefiting from the aggressive policies implemented targeting the whole economy and the agricultural sector. However, the profit is will likely increase on a decreasing rate, unless grace intervenes.
The Company needs more to invest in cost-cutting strategies to realise its full potential profit capacity.