Zimbabwe Stock Exchange-listed Tanganda Tea Company Limited’s revenue jumped 48% in the first quarter to December 2022 as the company focuses on value-addition options and cost management to mitigate against reduced profit margins.
The company is optimistic about its prospects during the financial year as all crops are looking good and there is a firm demand for its products.
In its trading update for the first quarter ended December 31, 2022, Tanganda said performance remained satisfactory in spite of inflation-induced increase in operating costs.
Bulk tea export volumes, however, were 33% below prior year.
About 52% of the crop was produced in the month of December and is expected to be exported in subsequent months.
“Company revenue for the quarter grew by 48% over prior year comparative period in inflation adjusted terms. Performance remained satisfactory in spite of an inflation-induced increase in operating costs,” the company said.
“Despite the late onset of the rainy season, bulk tea production volumes were in line with the comparable prior year period. Bulk tea export volumes, however, were 33% below prior year as 52% of the total volume was produced in the month of December and would be exported in subsequent months.”
Picked tea sales volumes grew by 13% for the quarter, with export volumes into the region growing by 37% over prior year.
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During the period under review, 325 tonnes of macadamia nuts were exported.
“The company is focused on value-addition options and cost management to mitigate against reduced profit margins and is optimistic about its prospects during the financial year as all crops are looking good and there is a firm demand for its products,” the company said.
The tea manufacturer, however, raised fears that the operating environment was expected to remain difficult.
“The operating environment is expected to remain difficult on the backdrop of envisaged macro-economic instability due to inflationary pressures, currency instability, fast rising operational costs and externals exogenous shocks such as imported global inflation,” the company said.
“The operating environment was characterised by currency volatility, erratic power supply, reduced agricultural output, the adverse impact of pass through effect of rising global inflation and continued geopolitical and COVID-19 related supply disruptions. This coupled with high inflation, which stood at 243,8% as at December 2022, resulted in a continuation of subdued economic performances.”