Online Reporter
Nelson Gahadza, Zimpapers Business Hub
DIVERSIFIED agricultural group TSL Limited says its “moving agriculture” strategy has created a clear trajectory, which has now positioned the group for growth and expansion.
TSL has, over the years, developed a strategy focused on driving advancements, efficiency, and growth in the agricultural sector through strategic initiatives such as scaling up and expanding business unit capacity, improving efficiencies, and exploring strategic partnerships locally and regionally.
During a presentation of the group’s interim financials for the period ended April 30 2025, chief executive Mr Derek Odoteye said the group is now seeing improved profitability and increased opportunities.
“The strategy has been excellent because it has created a clear trajectory of where value can be created, and the way our business is organised is now geared towards solving the problems that the different players in the value chain have. When you solve problems, that is when people are willing to pay you for doing that,” he said.
He added, “We are now seeing growth in volumes and partnerships developing as a result, and we are also seeing improved profitability and increased opportunities.”
For the period under review, consolidated group revenue from continuing operations grew 8 percent to US$19,6 million from US$18,19 million during the same period in the prior year, driven by improved volumes across most business units.
Earnings before interest, tax, depreciation and amortisation increased by 33 percent to US$7,5 million, while profit for the period from continuing operations surged 43 percent to US$4,3 million from US$2,3 million in the comparative period last year, supported by revenue growth and the group’s ongoing cost optimisation initiatives.
Mr Odoteye said the group’s financial position remains solid, closing the period under review with a balance of US$93,35 million, and the group continues to generate positive cash flows.
Operations Review
Under packaging, Propak hessian volumes were 28 percent ahead of the prior year due to the improved national tobacco crop size. Tobacco paper volumes were 6 percent ahead of the prior year as the market continued to respond positively to the locally coated paper.
“Sufficient hessian and paper stocks are in place to meet market demand in support of the anticipated increase in tobacco crop size,” said Mr Odoteye.
Under agricultural trading, Agricura experienced subdued volumes in the first quarter due to the delayed onset of the 2024/25 rainfall season.
“However, the persistent rains in the second quarter drove increased demand for insecticides and fungicides, resulting in volume growth of 3 percent and 235 percent, respectively,” he said.
He added that volumes in the animal health remedies segment surged by 244 percent compared to the prior year, boosted by the successful commissioning of the new animal health plant in November 2024.
In tobacco-related services, contract tobacco volumes were 8 percent ahead of the prior year, and independent volumes were 18 percent above the prior year.
Mr Odoteye said improved tobacco deliveries were a result of a successful 2024/25 summer cropping season, in contrast to the previous season, which was adversely affected by the El Niño-induced drought.
“The strategy to serve the much larger contracted tobacco market continues to yield results, with 81 percent of the total volumes handled coming from this segment.
“The volumes are expected to close the year significantly ahead of the prior year owing to the anticipated improved crop size,” he said.
On the commodity exchange, the Zimbabwe Mercantile Exchange (ZMX), trading volumes have remained depressed and below expectations.
Mr Odoteye said preparations are underway for the coming grain marketing season, and efforts to educate the market on the benefits of the commodity exchange, which include improved marketing, financing, and trading of agricultural commodities, will continue.
In logistics services, Mr Odoteye said the bonded warehouse facility, which handles 88 000 tonnes, achieved a significant improvement in capacity utilisation to 70 percent, compensating for the loss of a major FMCG client, Unilever, which exited the Zimbabwean market.
He said total forklift hours remained flat compared with the same period last year, mainly because of the slow start to the tobacco season.
He noted that volumes in the ports business were depressed due to unrest in Mozambique in the first quarter, affecting the Maputo and Beira ports. As a result, full container lifts were 76 percent below the prior year and empty container lifts were 18 percent below the prior year.
“These are expected to increase significantly in the second-half of the year,” noted Mr Odoteye.
Under infrastructure operations, total available space increased by 9 percent to 217 000 square metres, following the completion of a world-class 15 000 square metre warehouse in the prior year.
Mr Odoteye said void levels remained low at 6 percent, consistent with the prior period.
He indicated that the group is disposing of three properties to fund the acquisition of a 51,43 percent shareholding in Nampak Zimbabwe Limited. He said the properties were identified based on their sub-optimal returns and limited strategic significance, collectively representing approximately 5 percent of the group’s total property portfolio by value.
Mr Odoteye said the acquisition of Nampak Zimbabwe for a consideration of US$25 million is progressing well and is expected to conclude by year-end.
He also noted the group expects a much improved second-half, largely supported by the real estate sector, which has been resilient.
He said the focus remains on implementing revenue enhancement and margin protection initiatives, while also implementing cost optimisation and improving operational efficiencies and leveraging technology to streamline processes.
