TSL Limited delivered a strong set of half-year results for the period ended April 30, 2026, reinforcing the company’s investment case ahead of its migration from the Zimbabwe Stock Exchange (ZSE) to Victoria Falls Stock Exchange (VFEX).
At its EGM/AGM held on June 19, 2026, shareholders approved TSL’s delisting from the ZSE effective June 26, with listing on VFEX scheduled for June 29. The migration represents more than a change in trading venue. It reflects the repositioning of a business whose earnings profile is now overwhelmingly US dollar-based.
With over 97% of group revenue generated in US dollars, TSL increasingly resembles a US dollar infrastructure and agriculture platform being priced on a local currency exchange. The VFEX migration therefore seeks to align valuation with underlying earnings quality and improve price discovery.
TSL’s business model is often oversimplified. The group has evolved beyond its traditional tobacco identity into a diversified agriculture value-chain, logistics, marketplace and infrastructure platform.
Through Agricura, the group supplies agrochemicals and animal health products. Through Propak, it provides tobacco packaging solutions. Through Tobacco Sales Floor and the Zimbabwe Mercantile Exchange, it participates in commodity market infrastructure. Through Bak Logistics, it provides freight, handling and warehousing services, while TSL Properties contributes stable recurring rental income.
This diversification was evident in the group’s 1H26 performance.
Revenue rose 33% to US$26,23 million from US$19,67 million, while EBITDA increased 31% to US$9,35 million. Profit before tax rose 42% to US$6,97 million, while profit after tax increased 42% to US$5,23 million. Earnings per share improved to 1,40 US cents from 0,98 US cents.
The margin profile, however, tells a more nuanced story.
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Group gross margins declined to 72% from 78%, reflecting margin pressure across major operating segments, particularly agriculture and logistics. Encouragingly, EBITDA margins remained stable at 36%, while operating margins held firm at 29%. PBT margins improved to 27% from 25%, supported by lower finance costs and improved operating leverage.
Agriculture was the standout performer and remained the group’s primary earnings engine.
Segment revenue surged 56% to US$19,45 million from US$12,44 million, contributing 74% of total group revenue. Operating profit increased 76% to US$6,56 million from US$3,74 million.
Although gross margins softened to 69% from 75%, operating margins improved to 34% from 30%, reflecting stronger cost absorption and improved operational efficiency.
The strong performance was largely driven by Agricura, which benefited from a favourable summer cropping season. Crop chemical volumes rose 47% due to increased weed management demand following above-average rainfall, while animal health volumes grew 29% following heightened livestock treatment demand after the January disease outbreak.
Marketplace operations also recorded strong operational momentum. Tobacco Sales Floor benefited from favourable rainfall, automation initiatives and expanded floor capacity. Contract tobacco volumes handled increased 87% to 36 million kilogrammes, while auction volumes rose 31% to five million kilogrammes. Lower tobacco prices partially offset this growth, but volume gains remained sufficient to support earnings expansion.
The major weakness came from logistics.
Revenue remained broadly flat at US$5,94 million compared to US$6,05 million in 1H25. However, profitability deteriorated sharply. Gross margins declined to 62% from 66%, EBITDA margins fell to 11% from 22%, and operating margins collapsed to nearly zero from 13%.
This suggests significant cost pressure within the logistics division, likely reflecting higher handling, labour and fuel-related costs.
Real estate remained stable and continued to provide earnings resilience. Revenue increased marginally to US$2,91 million from US$2,85 million, while operating margins softened to 66% from 69%. Occupancy remained strong at 94%, while property yields improved from 10% to 12%.
The balance sheet remains healthy.
Total assets increased 1% to US$100,62 million from US$99,40 million, while total equity rose 4% to US$71,28 million from US$68,36 million. Liquidity improved materially, with the current ratio strengthening to 1.43x from 1.08x. Operating cash flow more than doubled to US$10,29 million from US$4,97 million, although cash balances declined to US$5,19 million from US$8,62 million due to capital expenditure and dividend payments.
The board declared an interim dividend of 0,512 US cents per share. Combined with the final dividend of 0,742 US cents declared for FY25, trailing twelve-month dividends now stand at 1,254 US cents per share. At Friday’s implied US dollar share price of 23,39 US cents, TSL offers a trailing dividend yield of approximately 5,36%.
Looking ahead, management remains cautiously optimistic but flagged key risks.
Early weather forecasts suggest the possibility of an El Niño-induced drought during the 2026/27 agricultural season. Combined with lower tobacco prices and rising input costs, this could moderate farmer spending and agricultural activity, potentially slowing growth in TSL’s largest earnings segment.
Management indicated that the group is already evaluating mitigation strategies and believes its diversified portfolio provides resilience against these headwinds.
On the growth front, management expects key strategic catalysts to support medium-term earnings. Following receipt of regulatory approvals in Q3 2026, development of TSL’s 73-hectare Harare South project is expected to commence in Q4 2026. The project is expected to deliver approximately 1 900 residential stands, alongside commercial stands and community amenities.
Operationalisation of the Rutenga multimodal inland port also remains a major strategic priority in H2 2026.
Taimo is an investment analyst with a talent for writing about equities and addressing topical issues in local capital markets. He holds a First Class Degree in Finance and Banking from the University of Zimbabwe. He is an active member of the Investment Professionals of Zimbabwe community, pursuing the Chartered Financial Analyst charter designation. TSL enters the VFEX with strong earnings momentum, but also with clear macro and execution risks.
The key question now is whether the market will fully recognise the company for what it has become: a diversified US dollar earnings platform deeply embedded within Zimbabwe’s agricultural value chain. The VFEX migration may provide a cleaner valuation framework and improve price discovery, but sustainable re-rating will ultimately depend on TSL’s ability to maintain earnings momentum, execute on strategic growth projects and navigate the risks associated with the next agricultural cycle.
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