·         ARTD records -2% decline in volumes

·         Ariston posts a commendable growth in export tea sales volumes

·         Willdale reports a 26% surge in sales volumes

·         Hippo succumbs to delayed deliveries by farmers

·         BNC in an 8% recovery in total ore mined

Trading Update: ARTD; Ariston; Willdale; Hippo; BNC

Harare - In a Trading Update for the 3^rd quarter ended 30 June, 2023, ARTD recorded a 54% growth in inflation adjusted revenue to ZWL75.2 billion. The growth was attributed to inflation pricing, which countered the negative operational performance. Overall volumes declined by -2% against prior comparable quarter, while on the upside, export volumes rose by 16% due to improved product availability. In the Batteries division, volumes fell by -9% owing to power induced downtime at the beginning of the quarter. In the Paper segment, volume fell by -5% as trading was affected by exchange rate volatility and pricing distortions. At the Eversharp business unit, volumes registered a 28% surge to 12,430,000 pens, with the growth attributed to increased production output following retooling and improved power supply. At Mutare Estates, timber volumes rose by 7% to 2,350 cubic metres.

Ariston issued a Trading Update for its 3^rd quarter ended 30 June 2023, in which it posted an 18% increase in inflation adjusted revenue to ZWL28,268,600,193 from a record of ZWL23,882,566,024 in the prior corresponding period. The increase in revenue was due to an improved sales volumes performance, which exceeded the prior 2 comparable periods. Owing to improved global distribution channels, export tea sales volume rose from 897 tonnes in the prior period to 1,343 tonnes in the period under review, and this represented 57% of aggregate tea sales. However, tea production volumes decreased by -21% from 2,850 tonnes to 2,245 tonnes after the Group dropped 20% of the lowest yielding tea gardens. Owing to a late harvesting season for macadamia nuts, export sales volumes eased by -35% against prior corresponding period to 513 tonnes. This was also worsened by shipping delays. On the upside, production volumes for macadamia went up 29% to 1,313 tonnes. Sales of Poultry and Other Products were in line with production volumes. However, poultry production volumes declined in the period under review as the out-grower model is being reviewed due to its unsustainable nature arising from the mismatch of revenues being in ZWL whilst input costs are all in US$.

In the 3-months to 30 June, 2023, Willdale recorded a 26% increase in sales volumes as the construction industry picked up from the rain season shutdown period. Year-to-date volumes for the 9-months were, however, 4% below the prior year and still reeling from the effects of low production experienced earlier in the year due to electricity shortages. In the 9-months to June, inflation adjusted revenue is up 83% to ZWL20 billion. The growth in YTD revenue is buttressed by the growing demand for higher margin brick types which has helped in improving the product mix and margins.

Hippo Valley Estates Limited issued a Trading Update for its first quarter ended 30 June 2023 in which it reported a -10.6% decline in total sugar produced to 57,427 tonnes. The decline was attributed to delayed deliveries by farmers on account of late finalization of sugarcane supply contractual agreements with private farmers. The Company said, due to firm demand from industrial customers during the period, industry sugar sales into the domestic market for the 3-months, amounting to 87,816 tonnes was 4% above the comparable period in the prior year (2022: 84 228 tons). According to Hippo, industry exports amounted to 3 423 tons (2022: 10 039 tons) with the differential being due to the fact that in the prior year there were carry-over export allocations which were rolled over while in the current year the bulk of the export orders will be processed in the 2^nd and 3^rd quarters of the year. In inflation adjusted terms, revenue rose from ZWL171.4 billion in the corresponding period last year to ZWL231.4 billion in the period under review.

In a Trading Update for its first quarter ended 30 June 2023, Bindura Nickel Corporation reported an 8% increase in ore mined, at 117,249 tonnes. Despite coming from a low base, the growth was attributed to the introduction of new underground Load, Haul and Dump (“LHD”) equipment. Due to unavailability of high-grade massive ore sources, ore head grade fell by -2% to 1.02% Nickel, from 1.04% Nickel grade achieved in the same period last year. Despite the Concentrator Plant performance being compromised by intermittent breakdowns, ore milled was relatively stable. The adverse impact of the lower grade of ore processed reflected in the -9% decline in Nickel in concentrate produced, at 823 tonnes from 902 tonnes produced in the prior year corresponding period. Meanwhile, BNC recorded a surge in unit costs during the period owing to the high cost of maintaining aged underground mining mobile equipment and the increase in local operating costs which was driven by exchange rate disparities. Nickel in concentrate sales for the period, at 799 tonnes, were 19% lower than the 989 tonnes sold during the same period last year, in line with the decline in production. BNC alluded that as a result of the disproportionately high operating costs and low production, a loss for the period was incurred.

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