Ariston revenue declines 19pc
Inflationary pressures and low disposable incomes negatively impacted Ariston Holdings’ performance after revenue fell 19 percent in the first quarter to December 31, 2021.
The group recorded contraction in tea sales volumes, a development Ariston blamed on a decline in the volumes absorbed by export markets.
The downturn was triggered by a downcast global economic activity emanating from the Covid-19 pandemic and a global shortage of shipping containers.
This saw the local market consuming 83 percent of Ariston’s tea.
Coupled with the absence of pome and stone fruits in the product portfolio, the agriculture concern’s revenue retreated 19 percent in the first quarter compared to the same period.
Ms Acquiline Chinamo, Ariston Holdings company secretary said in a trading update the dearth of disposable earnings was inhibiting volume uptake within the local market.
She said the disparities between the official and the parallel market exchange rates were exerting pressure on the group’s finances particularly on the procurement side where local suppliers are charging based on parallel market rate thus exorbitant operating costs at the end.
“Inflationary pressures and lack of disposable income continued to affect the operating environment.
“ . . . the widening exchange rate gap between the interbank auction rate at which 40 percent of the group’s export revenue is retained at and the exchange rate that suppliers are charging for locally purchased goods continues to put substantial pressure due to mismatch in the two rates,” said Ms Chinamo.
Ariston saw a 20 percent growth in macadamia nut volumes during the period under review, as the macadamia nut stocks (from the fourth quarter of the prior year) resulted in an increase in sales volumes in the first quarter compared to the same period in the prior year.
Going forward, the agricultural concern said it continued to put measures in place to improve nut quality so as to increase the average price for the category and was working on some initiatives which are meant to bolster the poultry segment.
“Poultry is produced on an out-grower model for the largest poultry producer in Zimbabwe.
“In the current period, the producer increased the number of placements thus resulting in higher production volumes,” she said.
Ariston, however, noted that early season sales of tea had shown an improvement in selling prices compared to the prior year while macadamia prices are anticipated to remain the same as the prior-year for quality.-The Herald
