Online Reporter
Business Reporter
STSL Limited says it is well positioned to capitalise on emerging opportunities as part of its growth strategy, with the group presently focused on restructuring its balance sheet.
The company is finalising the acquisition of a 51,43 percent shareholding in Nampak Zimbabwe from Nampak Southern Africa Holdings for US$25 million.
Group chairman Mr Antony Mandiwanza, in a statement of the financials for the year ended October 31, 2024, said processes to finalise and execute the sale and purchase agreement are at an advanced stage.
“A number of key strategic initiatives are currently being pursued and should be concluded before the end of the current financial year,” he said.
For the year under review, group revenue from continuing operations, at US$36,9 million, was 1 percent ahead of the prior year, with most operatingunits, except Agricura, achieving budgeted volumes.
“Volumes for Agricura were adversely affected by the projection of a drought in the first half of the 2023/24 agricultural season. The group’s EBITDA dropped by 5 percent from the prior year, following the conversion to US$,” said Mr Mandiwanza.
He noted that the group’s profitability was adversely affected by the dollarisation of most operating expenses, which was worsened by an emerging US$ inflation in the economy.
As a result, profit before tax from continuing operations closed the year at US$7,1 million compared to US$9,8 million in the previous year. Mr Mandiwanza said the group’s financial position remained strong and continued to grow despite the drop in profitability in the financial year.
In the group’s tobacco-related services, he said despite a 22 percent drop in the national tobacco crop, Tobacco Sales Floor maintained its volume of tobacco handled at 52 million kilogrammes.
Mr Mandiwanza said the company maintained its close relationship with its tobacco merchant customers, handling 44 million kilogrammes of contract tobacco in the season, a 13 percent increase from the previous season.
“The decentralised floors in Karoi, Mvurwi, and Marondera were expanded and upgraded for the convenience of both tobacco merchants and farmers,” he said.
Propak paper volumes increased by 52 percent to give the company a 70 percent market share of national tobacco paper.
Hessian volumes, however, declined by 16 percent as a result of the 22 percent decline in the national tobacco crop output from 296 to 231.7 million kilograms.
“Efforts are underway to continue to increase tobacco paper and hessian export revenue in the region,” said Mr Mandiwanza.
In the agricultural trading, Mr Mandiwanza said the division was the worst affected by the El Niño-induced drought.
He said at a national level, all production targets in major crops, namely maize, tobacco, wheat, and soybeans, were missed.
“Volumes were significantly down from the previous year, and competition from new players was relentless.
“Despite these challenges, the company increased its gross profit (GP) ratio from 38 percent to 49 percent, driven by a high-value product mix and strategic procurement,” said Mr Mandiwanza.
Strategically, he said, the company adopted environmentally friendly manufacturing practices, introducing three biologicals (B-Veria, PL Nema, and Tricho-Tag) during the year.
“The upgrade of the company’s Animal Health Plant was completed towards the Practice (GMP) certification soon after. The plant has the capacity to meet national demand for cattle, sheep, and goat dewormers.”
During the period under review, the group’s logistics business recorded improved volume growth in the period due to the new business model, which supports the customer throughout the value chain.
Mr Mandiwanza said general cargo handling volumes were buoyed by fertiliser received via the Beira corridor and handled at the Mutare facility.
“Storage volumes were depressed as most commodities were received by customers on a just-in-time basis,” he said.
The group’s tobacco handling volumes were 5 percent below the prior period due to the reduced national tobacco crop.
FMCG distribution volumes were 27 percent ahead of the prior year due to increased business from existing customers.
“The Ports business grew by 33 percent due to positive performance from existing strategic partnerships.
“Clearing declined by 27 percent due to reduced volumes, as key customers were impacted by global supply chain disruptions,” said Mr Mandiwanza.
During the year under review, warehouse capacity increased marginally by 3 percent from 2023 into 2024 and is expected to increase further in 2025.
Premier Forklift hours were 27 percent ahead of the prior year as the business continues to grow its volumes from both new and existing clients.
Forklift sales were significantly ahead of the prior year.
