DIVERSIFIED firm TSL Limited has lined up several investments to scale up and expand its manufacturing capacity.
In a statement attached to its financial results for the year ended October 31, 2023, TSL chairperson Anthony Mandiwanza said the group would continue to pursue key strategic initiatives in line with its “moving agriculture” strategy.
“Several investments are lined up to scale up manufacturing, expand the capacity of the different business units and improve efficiencies to deliver a superior offering to the marketplace across the agriculture and mining value chains,” he said.
“The group’s digitalisation drive continues to bear fruit with more digital investments earmarked for the year. The operating environment is expected to remain challenging and will be proactively managed to ensure continued shareholder value creation and preservation.”
During the period, TSL incurred borrowing costs of ZWL$1 billion which were capitalised.
An increase in debtors left TSL in a liquid position to carry out its capital commitments as it had ZWL$1,44 to every dollar of short term debt.
Mandiwanza said TSL would focus on group earnings, returns on invested capital, the group’s long-term value proposition, and strengthening the company’s financial position.
But the TSL chairperson cautioned that the El Nino-induced drought will reduce the performance of certain business units.
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In the year under review, TSL recorded a near 20% increase in profit after from ZWL$63,34 billion in the comparative 2022 period. The increase is attributed to revenue growth by nearly 159% to ZWL$172,31 billion.
“Notwithstanding the challenging trading conditions, the group achieved good volume growth across most business units against prior year. Inflation adjusted revenue was up 159% underpinned by strong volume performance, particularly in the tobacco-related businesses,” Mandiwanza said.
Under marketing operations, TSL’s Propak hessian volumes were 32% ahead of prior year owing to stock availability and a larger tobacco national crop size.
“Tobacco paper volumes were 27% ahead of prior year, as the market continued to respond positively to the locally-coated paper,” Mandiwanza said.
However, TSL subsidiary Agricura saw mixed results as demand was mixed.
Thus, TSL concluded a buyout of a minority shareholder in the subsidiary to expand the business by deepening its product offering.
Under its logistics operations, tobacco handling volumes were 96% ahead of the prior year due to an increase in the customer base. Premier Forklift volumes were 16% ahead of the prior year as the business made use of existing and new clients.
For its real estate operations, Mandiwanza said occupancies, returns and the level of voids remained satisfactory. However, operating expenses and staff costs rose by 163,13% to ZWL$104,17 billion during the period under review from the comparative.
“The ZWL$ cost structure of the business was inflated due to exchange rate volatility while foreign currency revenues were recorded at the official exchange rate,” the TSL chairperson said.
“The group continues to prioritise enhancement of shareholder value and sustainable growth. Group borrowings are foreign currency-denominated and remain low with adequate interest cover.”
Revaluation of certain assets led to total assets of ZWL$441,8 billion, from the comparative of ZWL218,08 billion.