Lower than expected tobacco output and increased operating costs pushed TSL Limited profits down by 26% for the full year ended October 31 2011.
The group recorded profits of $1,7 million compared to $2,3 million in 2010.
Although the group recorded a decline in profits, its revenue rose to $47,9 million indicating a 29% increase from $37,2 million during the comparative period.
Company chairman Charles Nyereyegona said: This decline was attributable to lower than expected tobacco output, increased operating costs and downward pressures on selling prices.
The country missed the 170 million kg tobacco production target set for the industry in 2011 by the Tobacco Industry and Marketing Board (TIMB).
Statistics from the TIMB show that at the close of marketing season in August last year 129,9 million kg had been sold.
The companys associated entities that include Luxaflor Roses and Cutrag contributions to the group increased by 32%.
Nyereyegona said the group disposed off its loss-making Luxaflor Roses thereby stemming the negative contribution of this entity to group results.
In order to fully unlock potential of the group a strategic review of all operations is underway and the appropriate actions from this exercise will be advised in due course, he said.
Management focus in 2012 will be on cost control and on the growth of market shares of all units. Steps will also be taken to reorganise and rationalise Chemco Holdings to reverse the negative financial trends, Nyereyegona said.
The groups subsidiaries Bak Logistics, Propak (Pvt) Ltd and Avis, the car rental company, registered increases in profits for the period under review.
He said Bak Logistics will be acquiring additional warehouse space this year to meet the increase in demand.
Hunyani group volumes grew by 9% with growth in domestic sales offsetting a decline in exports.
The company remained borrowed throughout the year to fund increases in working capital requirements.
The manufacturing sector still remains under pressure from imported substitutes, he said.
TSL group did not declare a dividend for the period under review due to the reduced profitability in the second half of 2011.