daniel chigunwe
Enacy Mapakame
TSL Holdings Limited says the late onset of the rainy season weighed on the uptake of agricultural inputs with this year’s national tobacco volumes expected to fall by between 10 percent and 15 percent compared to 2021.
Farmers had sold 188 million kilogrammes of tobacco worth US$488 million when the 2021 selling season officially closed mid July.
By end of July 2021, an estimated 200 million kg had been sold.
The country anticipated a good rainy season, but the out-turn was erratic, with some parts of the country being negatively impacted by the passage of the Tropical Storm Ana weather system.
“The country experienced a late onset of the rainy season which negatively impacted the uptake of agricultural inputs.
“Indications are that National tobacco volumes are expected to range between 10 percent and 15 percent below prior year,” said TSL company secretary Fadzayi Pedzisayi in a trading update for the first quarter to 30 January 2022.The Tobacco Industry Marketing Board (TIMB) announced 30 March 2022 as the commencement of the tobacco marketing season, a week earlier than in the previous year.
During the quarter under review, group revenues grew 72 percent in inflation adjusted terms mainly from supply of agro-inputs, provision of logistics services and real estate services primarily to the agriculture industry. Gearing for the quarter remained low with satisfactory interest cover.
Under its agriculture operations, Tobacco Sales Floor (TSF) is well advanced in preparation for the tobacco marketing season scheduled to start March 30, 2022.
According to the group, the business is setting up a new decentralised floor in Mvurwi to augment the Harare, Karoi and Marondera floors, a move that is also expected to improve tobacco volumes to be handled in the year.
In preparation for the tobacco selling season, Propak Hessian commenced distribution of tobacco packaging materials during the quarter. Volumes of hessian wraps were ahead of prior year whilst tobacco paper came in at 16 percent above same period last year.
At Agricura, volumes across all major product lines were depressed against prior year due to the late onset of the rains which resulted in a shift in volume uptake.
“However, there was significant volume growth in fertilisers compared to last year due to availability of stocks and favourable pricing. In the farming operations, tobacco, maize and soya bean crops are growing well and yields are expected to be satisfactory.
“The banana plantation recovered from the prior year drought resulting in improved yields. The increasing dam water levels are expected to be adequate for the planned winter crop,” said Pedzisayi.
For the logistics operations, the rail initiative from Maputo to Harare positively impacted volumes in the General Cargo and Ports divisions although shortages of empty containers persisted.
Distribution volumes came in 49 percent behind last year as most customers’ volumes slowed down.
Avis car rental days rose 74 percent compared to same period last year on relaxation of lockdown restrictions but Premier’s forklift hours went down 9 percent during the quarter due to slowed activity among major clients.
The real estate operation registered positive performance with space leased out at 10 percent above prior year due to the contribution of the new warehouse that was under construction in prior year.
While the operating environment is expected to remain complex due to uncertainties from Covid-19 and the unrest in Eastern Europe, which will have an impact on supply chains and availability of critical raw materials, the onset of the tobacco marketing season is expected to improve volumes through the group’s tobacco related operations.
“The Group continues to undertake key strategic initiatives in pursuit of its “moving Agriculture” strategy,” said Pedzisayi.
Bongani Ndlovu