TSL in 62 percent revenue growth
Zimbabwe Stock Exchange listed entity TSL Limited reported a 62 percent growth in revenue and a 294 percent growth in operating profit for the year ended October 31, 2019.
Revenue for the period amounted to $454,9 million while operating profit amounted to $195 million.
The diversified company went on to record a 132 percent growth in profit before tax while the profit for the period increased to $124,1 million from $69,7 million in prior year.
The group’s inflation adjusted cash and bank balances amounted to $63,9 million and the directors declared a second interim dividend of $7,28 cents per share.
The group’s financial position, which was described by acting chief finance officer Patience Shiri as sound had net asset value at 170,70 cents per share up from 131,20 cents prior year.
Ms Shiri, who spoke for the first time at the company results briefing held last week, said while the group had very low foreign exposure it was using its income generated to hedge against inflation and also as part of preparation for upcoming seasons.
This, she said, is being done through procurement of trading inventories with longer expiry periods.
Inventories increased to $76,08 million from $50,09 million while inventory prepayment amounted to $48,6 million from $14,1 million. Trade receivables went up to $88,03 million from $62,1 million.
Group chief executive, Derek Odoteye, who assumed the role this year, said the group had a good overall performance on the back of improved merchants’ volume as well as the higher national tobacco crop.
Strong performance was noted at Propak Hessian which signed on new customers to increase market share by 4 percent.
However, on the agricultural trading segment, Mr Odoteye said volumes were significantly lower owing to the drought and erosion of aggregate consumer demand.
The company, he said, strategically invested in inventories both as an inflation hedge and to ensure product availability in ensuing seasons and invested in upgrading its plant and machinery in preparation for local manufacturing in the near future.
The farming-related businesses also recorded strong performance with yields for all crops higher than in prior year given the thrust to only grow irrigated crop.
The tobacco crop fared well, fetching prices above industry average and on par with prior year, said Mr Odoteye.
Also plausible was the performance at the logistics related operations where strong volume growth was recorded.
Tobacco handling volume was up 27 percent, while inland ports operations went up 24 percent as a result of new clients signed up, handling of bulk minerals and increased volumes from existing clients.
Under real estate operations, occupancies in the business were at the same levels as in the prior year with void levels remaining satisfactory at under 4 percent.
On the outlook, Mr Odoteye said rising inflation eroded disposable incomes and reduced consumer spending power.
Access to forex remained problematic and shortages of fuel and electricity became more pronounced and impacted business to varying degrees, said Mr Odoteye.
He, however, said strategies have been deployed to protect the value of the company and deliver value to stakeholders.
As part of the strategies, Mr Odoteye said the business will make sure that cash generation of the business is strong and as a hedge the cash will be reinvested in long-dated trading inventories.–herald.co.zw
