BY MISHMA CHAKANYUKA
LISTED Tobacco Sales Limited (TSL) says overall yields for all crops were higher in the third quarter ended July 31, 2019 as compared to prior year mainly driven by irrigation.
Zimbabwe experienced low rainfall in the 2018/19 rainy season which left farmers relying on irrigation for their banana and tobacco crops to survive the dry spell.
In the company’s trading update, TSL said tobacco sales were in progress while banana volumes increased compared to last year and chillies yield was pleasing during the period under review.
“Overall, yields for all crops were higher than in prior year given the thrust to only grow irrigated crops. Tobacco sales of our own-grown crop are in progress and prices to date are above industry average and on par with prior year. Banana volumes are well above last year, as the new plantation has started producing,” TSL said.
The southern African nation economy is buffeted by forex scarcity, fuel and electricity shortages impacting business operations.
TSL said contract volumes at tobacco sales floor were up 34% driven by a new merchant being signed up while Propak hessians volumes declined by 13% compared to 2018 owing to a timing difference as a result of slower tobacco processing.
In its agricultural trading business, the group achieved volumes which ranged between 50% and 90% behind prior year depending on the product category, due to reduced consumer spending.
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The company’s logistics business realised high cargo volumes which were up 41% from the comparative year as fertiliser importers took advantage of the new value-added services, while key logistics recorded a 10% decline in customs clearance volumes as access to foreign currency continues to constrain imports by its customer base.
The distribution business posted a 39% decline in volumes; reflecting on eroded disposable incomes and reduced consumer spending.
During the period, TSL completed the second phase of the implementation of a new warehouse management system for the general cargo and tobacco sector.
In the real estate division, occupancies were at the same levels as in the comparative year, while void levels remained under 4%.
TSL expects economic pressures to persist in the short to medium term, but the group says will continue to position itself to take advantage of growth opportunities.
“We will continue to invest in our people, upgrading our infrastructure, market presence, developing our technology platforms and leveraging on our local and international partnerships. Foreign currency generation remains a key priority and strategies are being deployed to preserve value,” TSL said.
TSL has operations in agriculture, logistics and real estate.