TSL benefits from improved tobacco prices this season

TSL limited says its unit, Tobacco Sales Floor (TSF), cumulatively handled 52,5 million kilogrammes of tobacco during the third quarter ended July 31, 2024 compared to 52 million kg in the comparative period.

In a trading update, the company said contracted tobacco represented 84 percent of the volume handled by the business, a 13 percent growth from last year.

“In the quarter, volumes were 23 percent ahead of prior year,” company secretary Fadzayi Pedzisayi said in the statement.

During the quarter under review, Propak Hessian volumes were 27 percent below prior year cumulatively due to lower uptake of product by tobacco merchants as the national crop size declined.

She said the group’s tobacco paper volumes were 39 percent ahead of prior year in the quarter due to an increase in market share.

During the period under review, Pedzisayi said Agricura’s performance was negatively affected by the impact of the El Nino induced weather conditions experienced in the year.

“Volumes were depressed across most product lines as demand was low.”

In the farming operations, she said better yields were achieved compared to the previous year on tobacco and soyabean.

She noted that volumes from the banana plantation for the quarter were 13 percent above comparative period aided by a new irrigation system despite adverse weather conditions.

In the logistics business, the unit recorded mixed volumes performance in the quarter with Tobacco handling volumes (cartons) being 37 percent below comparative period while general cargo volumes declined as key customers slowed down on space and uptake of handling services.

Tobacco handled from the decentralised tobacco auction floors increased by 21 percent.

Distribution handling volumes increased by 47 percent and transport recorded an 8 percent growth in distance travelled.

“The Ports business grew by 42 percent due to positive performance from existing strategic partnerships.

“Clearing volumes grew by 21 percent due to improved volumes from key customers while the forwarding business declined,” said Pedzisayi.

During the period under review, Premier Forklift volumes were 2 percent ahead of the prior year due to increased business from existing clients with a significant increase in forklift sales.

Avis’ rental days were 24 percent below prior year as a result of increased competition from unregulated operators.

In the real estate operations, voids significantly improved in the period from 14 percent in prior year to 10 percent due to improved demand for warehouse space and release of space that had been under construction.

In terms of revenue performance, group revenue for the quarter is 13 percent ahead of last year mainly due to the volume growth in the logistics business.

About 83 percent of group revenue was generated in USD cumulatively at the end of the quarter.

National tobacco volumes closed at 228,9 million kg as of July 31, 2024, 22 percent below prior year, while the national average price at US3,43/kg was 13 percent above prior year.-ebsinessweekl