BY MTHANDAZO NYONI ZIMBABWE Stock Exchange-listed agro dealer, Tanganda Tea Company Limited has reported a 7% drop in revenue for the six months ended March 31, 2022, compared to the same period prior year, due to a decline in export sales.
The firm yesterday said that revenue stood at $1,9 billion during the review period, after exports dipped 31%.
“Timing of revenue recognition from export of macadamia nuts has resulted in the seeming decline in revenue,” company chairperson Herbert Nkala said.
“The macadamia export market is gravitating towards kernel instead of the traditional nut in shell and revenue from these exports will be recognised in the second half of the financial year.”
Profit before tax for the period, in inflation terms, amounted to $589 million compared to $749 million achieved prior year.
“Profitability was adversely affected by the disparities between increase in production costs and movement in exchange rate,” he said.
The exchange rate depreciated by 69% during the period under review versus year-on-year inflation of 73%.
Nkala said although bulk tea production for the period of 5 935 tonnes was 12% below prior year levels due to dry weather in December of 2021 and February 2022, bulk tea exports of 3 747 tonnes were 14% above 3 278 tonnes sold in the comparable period last year.
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He said the export average selling price firmed slightly to US$1,43 per kg from prior year average selling price of US$1,41 per kg.
“Avocado and macadamia harvest commenced in earnest at the end of the reporting period and the revenue is recorded in the second half of the financial year,” Nkala said.
Coffee exports stood at 96 tonnes, up 14% above what was achieved in prior year.
“Average export selling price of US$6,67 per kg remained slightly firmer than US$6,50 realised prior year. The company is realising the benefit of its diversified operations,” he said.
On the beverage segment, the company said the COVID-19 pandemic and the Russia-Ukraine war had created global logistical and supply challenges.
However, packed tea sales volumes were resilient at 933 tonnes, 4% below 1 033 tonnes in prior year.
Yields of avocado and macadamia are expected to increase with enhanced maturity profiling of plantations over the next three to five years.
Nkala said solar plants constructed at three of Tanganda’s five estates had significantly reduced reliance on power from the national grid.
“Further benefits from the investment are expected to be fully realised once full reticulation and net metering have been implemented before the end of 2022,” he said.
The company has invested in new machinery at its Mutare packaging factory in line with its value addition strategy.
Tanganda is known for coffee, macadamia nuts and avocado farming.
It exports 80% of its tea products and about 90% of avocados.
Tanganda listed on the ZSE in February, with management optimistic that this would have positive spinoffs.
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