Ariston Holdings focuses more on local revenues
One of the country’s largest agro-concern, Ariston Holdings, says the high cost of production for key inputs such as fertilisers and crop chemicals at a time when export prices are still depressed has negatively affected the operations.
The firm, in a trading update for the quarter (FY2025) to December 31, 2024, said challenges also include payroll coupled with the effects of the 25 percent Reserve Bank of Zimbabwe (RBZ) retention on exports.
“In the first quarter of the year, the group focused more of its revenues on the local market in order to protect the loss of margin arising from the export proceeds retention,” it said.
Despite the challenges, the company said a positive impact has been noted on the solar energy plant commissioned at Southdown Estate in July 2023.
It said this project has resulted in significant cost savings while safeguarding environmental resources through the use of a renewable energy source.
“It is the group’s intention to install further solar plants at Roscommon, Clearwater, and Kent to mitigate against power outages and the resultant cost of using generators,” reads part of the trading update.
The company said the current year’s tea production volume at 496 tonnes was 31 percent lower than the prior comparative period’s 716 tonnes, and the decline was due to the extremely hot and dry weather experienced in the first quarter of the year.
The company said macadamia harvesting only commences in April, and the volume depicted above comprises early nut drop.
“Therefore, the lower this early volume is, the better, as it means more nuts are still on the trees and are available to reach maturity.
“Early indications are that the macadamia orchards, so far, have better nut set than the prior comparative period,” reads the update.
The company said in the current quarter, products consisting of bananas, sugar beans and commercial maize saw a volume increase of 32 percent compared to the prior comparative period as a result of increased yields on bananas.
Tea sales volume for the quarter to date at 388 tonnes was 27 percent lower than the prior comparative period’s sales of 530 tonnes.
The company said average selling prices for both export and local sales held at the same level as those experienced in the prior comparative period.
Ariston said Macadamia nut sales volume for the period was 52 percent lower than the prior comparative period’s 132 tonnes.
It said macadamia export prices being indicated are higher than prices achieved in the prior year, and indications are that the global macadamia oversupply situation that arose during the COVID-19 period has now come to an end.
The company noted that revenue generated in the current year was 16 percent lower than that of the prior comparative period as a result of the delayed onset of rains, hence lower production volumes. “Only other products had higher revenue than the prior year.”
Looking ahead, the company said early indications are that demand for macadamia nuts will be firm, and improved prices are expected as buyers are approaching the group for macadamia offtake agreements for the season.
The company said 660 hectares of row crops were planted in the current year, and they are expected to produce a good yield.
“Overall, the group expects to achieve a higher revenue in the current year on the back of improved production and prices. Expenses this year will carry the cost of reorganising the business for sustainable growth.”-ebsinessweekl
