Ariston tea sales volumes bulk 57pc
Listed agricultural concern, Ariston Holdings, says export tea sales volumes grew 57 percent to 1 343 tonnes during the third quarter to June 2023, credited to improved logistics on the back of Covid-19-induced challenges.
The period saw a 35 percent decline in macadamia export sales volumes to 513 tonnes from the prior comparable period’s 785 tonnes, as shipping delays persisted on that front.
Firming average selling prices for both export and local tea sales in the period also buoyed volumes uptake particularly on the export front.
According to Ariston, sales for poultry and other products like commercial maize, seed maize, commercial soya beans, seed soya beans, potatoes and bananas during the period under review were in line with budgeted production volumes.
The company’s all-around performance was inspired by higher rainfall which was received during the 2022/2023 rainfall season.
“Total tea sales volumes improved considerably when compared to the last two prior comparative periods. Export tea sales volume improved to 1,343 tonnes, which made up 57 percent of total tea sales for the current period compared to 897 tonnes, which represented 46 percent of total sales in the prior comparative period.
“This significant shift in the sales volume makeup is attributed to improved tea quality coupled with improving logistics post the Covid-19 induced logistics bottleneck,” said Nkosilothando Ncube Ariston Holdings company secretary in the group’s trading update for the third quarter to June 2023.
On the other hand, the Macadamia harvest started towards the end of the first quarter when the nuts had reached maturity.
According to Ariston this year’s Macadamia harvesting season started later compared to the previous year leading to a delayed selling season.
To combat that gap the company is still scouting for the crop’s offtakes.
“Export supply contracts are on hand with various customers for the majority of the tonnage produced to date, however, shipping delays have been experienced which have resulted in the slower movement of the macadamia nuts,” added Ncube.
The group’s revenue for the period was $28, 3 billion in inflation-adjusted terms translating to an 18 percent increase ahead of the comparative period’s revenue of $23,8 billion albeit having a number of products that are still held in stock awaiting dispatch.
In this period the firm’s, operations were significantly affected by the surging cost of production particularly for inputs like fertilisers and crop chemicals, this was exacerbated by incessant power outages as the company increasingly used diesel generators as an alternative source of energy.
According to Ariston, the fuel expense became so significant factor that it made a decision to invest in a solar power generating project, which was completed in July 2023.
“This will have the effect of underpinning uninterrupted production whilst at the same time reducing the cost of producing tea to sustainable levels.
“The full effect of this significant investment will be felt in the year ending September 30, 2024 and not in the current year’s performance.”
Going forward, Ariston indicated that it anticipates macadamia volumes to be ahead of the previous year, albeit the average price that is likely to be 20 percent lower.
In terms of tea production, the group is optimistic that improved average selling prices will continue up to the end of the financial year on both local and export tea markets.
All of the Group’s improvements are expected to have a favourable financial impact on the Group’s financial performance in the present year and an even greater impact in the future year.
During the current year, the Group made the decision to drop 20 percent of the lowest-yielding tea gardens where fertiliser application at the new increased price could not be justified.
This strategy resulted in tea production volumes reducing by 21 percent from 2,850 tonnes, and export tea sales volumes improving to 1,343 tonnes from 897 tonnes in the prior comparative period.-ebusinessweekly
