admincautionary statement the company published last year advising shareholders of the anticipated loss.
TSL said the loss was largely a result of the downward revision of the 2011 tobacco crop and tougher trading conditions in the agro-chemicals sector.
Faced with a multiplicity of challenges in the economy the group focused on steadying itself in a rather difficult operating environment.
“Tobacco output grew by 7 percent to 132 kilogrammes, which was significantly lower than the 150 kilogrammes projected at the start of the season,” said TSL.
The loss came despite a 29 percent increase in turnover over the 12 months period, which was whittled down by a combination of factors, including losses at subsidiaries and a loss on disposal of non-core assets.
A 68 percent increase in revenue at Bak Logistics and a 49 percent rise in turnover at Propak Limited failed to impact positively on group profits.
But the car rental division performed exceptionally well after both revenue and operating profits rose 41 percent and 45 percent respectively.
In the paper and packaging division (Hunyani) volumes grew by 9 percent while operating profits increased by 3 percent, but the firm remained borrowed throughout the year to fund working capital requirements.
TSL said it would review all the business units in this division to define long and medium-term options in the face of growing external competition.
The group’s retail units ABS, TS Timber, Farm-a-Rama and TSW traded in the red throughout the year and most had closed down by October. TSW, which remained open, will be merged with Propak.
Slow growth in tobacco and cotton production was cited for constrained increase in volumes at Agricura while frequent power cuts caused reduced demand for chemicals as this affected the winter crop.
TSL contends non-availability of funding affected crop production and despite a 10 percent increase in revenue Agricura posted an operating loss.
Measures have been instituted to increase capacity utilisation this year and steps are underway to reorganise the distribution network to cut costs.
Despite an increase in the number of tobacco auction floors, Tobacco Sales Floor managed to increase its markets from 53,5 percent to 56,2 percent.
But the firm said it had to pay a premium on in-house skills due to additional players in the sector and this sharply reduced profits for the year.
At Cut Rag Processors revenue surged by 9 percent. TSL said although the number of customers decreased volumes per customer went up.
Due to the continued operational hurdles around low productivity, power outages and unpredictable market trends TSL sold its 50 percent shareholding in loss-making horticultural concern Luxfloor Roses.
Looking ahead, TSL said agriculture would be key to this economy with an 11,6 percent growth predicted this year, the group contends its operating units namely TSF, Propak, Bak Logistics and Agricura will do well.
Online Reporter