- TSL Limited experienced a 55% decline in profit after tax, dropping to US$3.62 million for the fiscal year ended October 2024
- The agricultural sector faced challenges from both climate conditions and economic pressures
- El Niño-induced drought led to a 22% reduction in national tobacco output, contributing to a 16% decline in tobacco hessian volumes
Harare-TSL Limited, a diversified Zimbabwe Stock Exchange-listed company, experienced a sharp 55% decline in profit after tax from continuing operations, falling to US$3.62 million for the fiscal year ended October 2024.
This downturn stemmed from a combination of systemic economic challenges, including hyperinflation linked to the dollarisation of operational costs, liquidity constraints, and prolonged power outages.
The introduction of the Zimbabwe Gold (ZiG), intended to stabilise the economy, instead exacerbated financial volatility.
A widening gap between formal and parallel exchange rates, reaching a 74% premium in early 2024, disrupted access to foreign currency, critical for imports and local procurement, straining cash flow and operational stability.
The agricultural sector, a core focus for TSL, faced dual pressures from climate and economic conditions.
El Niño-induced drought reduced national tobacco output by 22%, impacting TSL’s Agricura division and contributing to a 16% decline in tobacco hessian volumes.
Despite this, the company maintained its tobacco handling volume at 52 million kilograms, bolstered by a 13% increase in contract tobacco processing.
Operational resilience was evident in the Propak paper division, which achieved a 52% volume surge and captured 70% of the national tobacco paper market.
Strategic procurement and a shift toward higher-margin products drove gross profit margins from 38% to 49%, while revenue edged up 1% to US$36.9 million.
To streamline operations, TSL is divesting from two non-core businesses while advancing a US$25 million acquisition of a 51.43% stake in Nampak Zimbabwe, signaling a focus on scalable, high-impact sectors.
Looking ahead, the company anticipates agricultural recovery amid improved weather conditions post-El Niño. Sustainability initiatives, including eco-friendly manufacturing and biological product launches, alongside upgrades to its animal health division, reflect efforts to align with evolving market demands and regulatory standards.
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