ANALYSIS| Cost Cuts Help, But Revenue Crisis Threatens Ariston’s Recovery

By ETimes

HARARE – ARISTON Holdings Limited’s half-year financial results to 31 March 2025 reflect a mixed performance, with significant pressure on revenue and production volumes, albeit mitigated by improved cost efficiencies.

Revenue fell by 18% year on year to US$1.99 million, primarily due to lower tea sales volumes and subdued export prices. This decline in revenue was compounded by a 45% drop in tea production volumes and a 32% fall in macadamia nut production, highlighting operational vulnerabilities, particularly to climatic and market factors.

On a positive note, cost management efforts yielded a 24% reduction in cost of production, narrowing the gross loss to US$441 078 from US$781 432 in the prior period. EBITDA (excluding fair value adjustments) remained negative at US$1.20 million, although this marked a modest 9% improvement year-on-year. The group’s loss after tax reduced by 32% to US$1.44 million, highlighting improved financial discipline and a 25% decline in finance costs.

Source: Ariston

Liquidity remains a concern, with current liabilities exceeding current assets by US$930,572. Borrowings increased to US$11 million from US$9.2 million, raising leverage risk despite the restructuring of short-term debt into longer maturities. Cash flow from operations remained negative at US$399 245, although the group secured US$3 million in longer-term funding, which could help stabilise operations in the medium term.

Headline earnings per share (HEPS) dropped sharply by 87% to US$0.0009, indicating that non-recurring items and fair value adjustments had a substantial impact on the bottom line. The lack of capital investment during the period raises questions about the group’s ability to reverse declining production trends in future reporting periods.

Our Thoughts: While cost controls and debt restructuring have improved operational efficiency and reduced losses, the sustained decline in revenues, production volumes and negative cash flows highlight structural challenges. To return to profitability, Ariston Holdings must focus on boosting production yields, diversifying revenue streams and managing climatic risks more effectively.