TSL’s revenue grows 9% on strong volume performance

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HARARE – TSL Limited says its inflation adjusted revenue was up by nine percent during the quarter ended July 31, 2021, driven by volume growth across all its business units.

The agro-industrial firm said its tobacco subsidiary – Tobacco Sales Floor – handled 16,7 million kilograms of tobacco during the quarter, a 143 percent increase from 6,9 million kg handled in the comparative period.

Of this volume, 60 percent was on behalf of tobacco contractors in Harare and the new decentralised floors in Karoi and Marondera in line with the group’s strategic thrust.

“The group achieved good volume growth across most business units and remains profitable. Revenue is ahead of prior year, for the quarter, by nine (inflation adjusted) and 105 percent (historical cost),” TSL said in a trading update.

“Adequate interest cover on borrowings is maintained with most working capital requirements funded from internally generated resources. The developments in the marketplace from May 2021 have increased pressures on margins and may adversely affect efforts to preserve value.”

The agro-industrial firm said Propak hessian volumes are cumulatively 21 percent ahead of prior year.

“Due to the earlier start to the tobacco trading season, most of these volumes were delivered in the first half of the year and consequently the volumes in this quarter are 30 percent lower, reflecting this timing difference,” TSL said.

Agricura achieved strong volume growth across most product lines due to increased market share, stock availability and attractive pricing particularly on locally manufactured products.

“The prior year drought adversely affected yields for tobacco, banana and chillies as water had to be rationed due to low dam levels. However, the above-normal rainfall season has resulted in good yields for the maize, Seed maize and soya bean crops,” according to TSL.

Bak Logistics recorded good volume growth over the prior year in tobacco handling (28 percent), distribution (36 percent), ports (285 percent) and transport (117 percent) divisions.

TSL attributed the growth to new clients being signed up and the commencement of transport services from decentralized tobacco floors.

“Storage volumes in FMCG and General cargo were well below the comparative period, due to global supply chain disruptions which resulted in product being moved directly to consumers,” TSL said.

Handling volumes at Premier Forklifts improved by 28 percent in the quarter while forklift sales remained depressed as customers slowed down on capital projects.

Avis’ rental days are up 121 percent during the quarter under review due to lighter lockdown restrictions and commencement of international travel when compared with prior year.

For the real estate operations, TSL said occupancies remain satisfactory and voids levels are comparable to prior year.

In the outlook, TSL said it continues to pursue its “moving agriculture” strategy in a difficult operating environment and to invest accordingly to create and preserve shareholder value.

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