Ariston banks on good rains to improve product
quality

Listed agriculture concern, Ariston Holdings Limited, is banking on its automation and the
projected good rainfall pattern for 2022-23 season for enhanced product quality and yield
during the financial year 2023.

This comes as the company is also focusing on production processes and quality as it
angles for growth in foreign currency earnings from the export market.

Last year the company invested in a new fleet of tractors and rehabilitation of irrigation
systems at its estates including setting up additional centre pivot at the Kent Estate which
is expected to yield improved quality for both tea and macadamia production.

The initiatives are meant to scale up the group’s production performance as the world
begins to open up from the traps of the Covid-19 pandemic, which diminished volumes
uptake from the traditional markets around the world.

Now, with the country expected to receive normal to above normal rainfall this year, this is
anticipated to boost production for some of the group’s key products — tea and
macadamia nuts. Ariston is also into poultry production as well as fruits and potatoes.
“Normal to above normal rainfall is anticipated for the rest of the year,” said the group in
a trading update for the first quarter to December 31, 2022.

“The automation processes that were implemented during the prior financial year are
expected to continue yielding improved quality for both tea and macadamia nuts.”

Already, there has been a notable improvement experienced in the average selling prices of
both local and export tea and this is expected to continue.
According to the group, early indications on macadamia production volumes and quality
are showing an improvement.

“It is still too early to determine the indicative macadamia selling prices, however,
management believes that these should be in line with the prior year depressed price and
that a real recovery in macadamia prices should be more evident in 2024,” said Ariston.

The group will also continue to focus on cost containment measures.
During the first quarter period under review, total tea sales volume was above prior
comparative period as the group closed the financial year ended 2022 with some tea
stocks, which were sold in the current period.

The global economy activity recovered from the impact of the Covid-19 pandemic while
global shipping shortages have improved resulting in a 229 percent increase in export tea
sales. Local tea sales volumes registered a 102 percent increase in volume as demand from
local customers improved.

Macadamia nut production volumes increased during the period although sales volumes
declined as prior period had late macadamia exports which did not occur in the current
year.

In terms of financial performance, revenue for the quarter went down 27 percent
attributable to potatoes which were sold in December in prior year whereas in the current
year, these were sold in January 2023.

“Further, timing of poultry placements contributed to the revenue decline and the late
season macadamia export in prior year boosted prior year revenue.

‘‘Overall, these issues are all about differences in timing and will reverse as the year
progresses,” said Ariston.

The group indicated planting of potatoes was delayed to avoid losses normally experienced
when the fields are too waterlogged for potato harvesting.

As a result of changes in timing of potatoes, harvesting commenced in January 2023,
whilst in prior year, harvesting occurred in December. Thus the timing difference resulted
in a 32 percent decline in production volume as at end of the quarter.-The Herald