Ariston Holding’s revenue for the nine-month period ended June 30, 2022, grew by 69% in historical terms compared to the prior comparative period, the company reported in its trading update period.
According to the update, the group’s revenues in inflation adjusted terms declined by 19% when compared with the prior year comparative period, due to continued inflationary pressures, and closed the quarter at a year-on-year inflation of 191.6%, up from 131.7% in May 2022.
During the period under review, macadamia nuts suffered a 14% production volume decline. The nut count was in line with the prior year but there was a larger proportion of smaller nuts, which resulted in a reduction in tonnage, though the quality of macadamia was maintained.
Tea production volumes continue to surpass the volumes achieved for the comparative periods in 2021 and 2020, and were 14% ahead of the prior comparative period due to improvements in harvesting labor availability.
Ariston further said that other products consisting of potatoes, commercial maize, soya beans, sugar beans, and bananas recorded a decline in production volume arising from the effects of commercial maize, sugar beans, and sunflower, which are currently being harvested, but these products will be included in the fourth quarter production statistics.
The late harvesting is due to the late start to the current year summer rains, which resulted in delayed planting.
Ariston produces poultry on an out-grower model for the largest poultry producer in Zimbabwe, and the company has seen its production volume increase by 11% as a result of more placements in the current period.
The group’s export tea sales volumes fell by 15% while selling prices rose by an average of 6% compared to the previous comparative period. Local tea volumes fell by 9%, while average selling prices rose by 14% in real terms, while macadamia export volumes fell by 2% compared to the previous comparative period.
The decline in sales volumes was mainly affected by the total lockdown in China, which resulted in a global slowdown of macadamia sales as China is the largest consumer of macadamia in the world.
“The war between Russia and Ukraine as well as the COVID-19 pandemic have continued to have a negative impact on the Group’s operations. Input costs, primarily fertilizer, have continued to soar, at the same time the selling prices of agricultural products have not increased at the same level as input costs, thus putting pressure on margins. Disruptions caused by COVID-19 shutdowns globally continue to have an effect on the business,” Ariston said.
The update further said that the sales of other products were higher than production due to the sale of seed maize and seed sugar beans, which were going through quality processes at the end of 2021.
The group expects the environment to remain challenging for the remainder of the year.
“The group expects that the operating environment will continue to be challenging for the last quarter of the year. In the final quarter, factories go into shutdown for repairs and maintenance while lands and orchards are prepared for the next agricultural season. Sales of tea, macadamia, poultry and the other products’ category continue as the Group has a large holding of stock.”
Ariston continues to hope that progressive and consistent policies will be employed to eliminate the current market disparities affecting businesses.
On the ZSE, the group has a year to date loss of 40.67% or in US dollar terms, a loss of 84.02% with a market cap of ZW$3.59 billion or 8.91 million in US dollar terms. Its last trading price stood at 220.83c after gaining 3.69%.