daniel chigunwe
Tapiwanashe Mangwiro and Francis Gakanje
Zimbabwe Stock Exchange listed horticulture concern, Tanganda Tea Company, saw its revenues fall by 6 percent to US$11,10 million for the half year ending March 31, 2024, due to poor performance by macadamia nuts.
The macadamia nuts revenue fell by 75 percent to US$180 862 in the period under review from US$727 670 in the first half of 2023, as prices for the product were subdued.
The revenue fall in macadamia was, however, offset by an 89,6 growth in coffee revenue to US$368 602 from US$194 440 in the prior year.
Resultantly, Tanganda’s half-year 2024 revenue was down 6 percent to US$11,10 million compared to US$11,80 million recorded in the prior year.
For sectoral performances, agriculture was affected by the delayed onset of the rain and its uneven distribution which resulted in a significant decline of 8,96 percent in bulk tea production, which led to a total output of 5 082 tonnes, compared to the 5 882 tonnes produced in the previous year.
The company’s bulk tea exports totalled 3 005 tonnes representing a 12 percent increase compared to 3 415 tonnes exported the prior year.
“The average export selling price of bulk tea declined to US$1,38 per kilogramme,” said Herbert Nkala, the company chairman.
According to the company; “Initial post-reporting period shipments to China, international macadamia nut prices have shown signs of strengthening, increasing by approximately 20 percent compared to the previous year.”
The firm’s coffee exports reached 58 tonnes, signifying a 32 percent increase from the 44 tonnes exported in the prior year.
“Average export selling price of US$6,24 per kg was firmer compared to US$5,03 per kg realised the same year prior,” according to Nkala.
For the beverage sector, the company’s packed tea sales volumes declined by 33 percent, dropping from 929 tonnes in the period under review to 625 tonnes.
“Notwithstanding that the customer order book was full, a combination of managing customers to reduce defaulting customer risk and packaging supply constraints are among factors that resulted in reduction in sales volumes,” the chairman added.
He said the packed tea exports to the region registered a 78 percent increase over the previous year, following the diversification of its exports into the Democratic Republic of Congo.
With all the price issues on the global markets, the company managed to report a 25 percent increase in its half year profit after tax, which grew from US$1,58 million to US$1,97 million.
The chairman said the company recognised US$1,5 million in fair value gains on its biological assets and fruit on bearer plants, which were included in its other income for the period.
In the period under review, Tanganda saw its capital expenditure on bearer plants decrease to US$347,198 from US$1,6 million spent in the previous period.
In the half year to March 31, 2024, Tanganda’s interest-bearing borrowings consisting of bank loans obtained from local financial institutions which accrue interest at a weighted average rate of 10,19 percent amounted to US$5,07 million.
According to the company, “Bank loans of US$3,5 million are secured by the assignment of export proceeds to various financial institutions in line with the level of proportional indebtedness of the company to each of the financial institutions.”
Despite the impact of complex, macroeconomic factors on local, regional and international markets, the demand for the company’s products has remained relatively robust.
Tanganda in its outlook said it will continue to pursue sustainable market diversification strategies in order to expand its presence in regional and international markets.
According to the chairman, the firm remains optimistic that the mitigatory strategies it has implemented will enable it to successfully navigate the challenging landscape, with a focus on improving efficiencies across all operations and managing costs effectively
Bongani Ndlovu