• Wed. Jun 12th, 2024

TSL revenue up 106% in Q1, expects increased levels of borrowings

ByEconomic Times

Mar 22, 2023

By ETimes

TSL’s inflation-adjusted revenue for the first quarter ended 31 January 2023 rose 106% from the comparative quarter on volume growth.

The positive performance came in a period that was characterized by power and liquidity challenges, according to the company.

Inputs for agriculture, the provision of logistical services, and real estate services, especially to the agriculture industry, accounted for the majority of group revenues in the first quarter.

“This growth was mainly driven by firmer volumes in the agri-inputs business, a stronger performance in the logistics business, and increased uptake of tobacco packaging materials by customers in anticipation of the earlier start to the tobacco marketing season,” group company secretary, Fadzayi Pedzisayi in a trading update said.

In the period, the group repaid its ZWL borrowings despite the fact that interest rates on ZWL borrowings were uneconomically high. As a result, it reported a decline in the already low gearing of the group.

“Sizeable capital projects, which are expected to enhance the earning capacity and quality of the Group, are at various stages of execution and will see an increase in the Group’s level of borrowings on the back of more sustainably priced facilities.”

On the agriculture operations, Propak Hessian recorded increased volumes.

“The business is adequately stocked for the season on all packaging materials,” Pedzisayi said.

The key product lines of Agricura experienced a solid volume increase over the previous year, with better product accessibility and market penetration.

As a result of the unit acquiring more business from both current and new customers, handling volumes are much higher than they were last year.

“Volumes in the International Services Division, for the quarter, were 46% ahead of last year due to the Maputo rail service and the commencement of an additional rail service from Beira. The introduction of a reliable rail service is a positive move with a far-reaching impact on businesses in-country and within the region,” Pedzisayi said.

Volumes in the Supply Chain Division were depressed owing to global supply chain disruptions, which constrained fertilizer movement. FMCG distribution volumes were 9% behind the prior year, reflecting lower aggregate market demand.

Due to increased business from important clients, forklift usage in the Handling Equipment Division was 25% higher than it was the previous year.

“The Division has introduced electric forklifts as part of its service offering which is expected to benefit customers in the food and beverages industry.”

Days spent renting cars from Avis Budget Group are a little bit higher than they were last year due to an increase in international arrivals.

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She said the real estate operation continues to operate satisfactorily.

“The Business unit completed the expansion of the Mvurwi sales floor, bringing the new warehouse space to 9,000 square metres. This development has supported TSF’s decentralisation drive. The business is also creating additional world-class warehousing capacity of 23,000 square metres on two of the Group’s properties,” she said.

“This move is intended to support the growth of both the agriculture and logistics operations over the next 12 to 18 months. Demolition works are at an advanced stage on the one site, while ground works have commenced at the second site. The redevelopment of both sites is expected to start in the second quarter.”

In pursuit of the “moving agriculture” strategy, the Group continues to strategically invest to address a number of important economic concerns.

TSL Limited is currently the 18th most valuable stock on the Zimbabwe Stock Exchange (ZSE) with a market capitalization of $30.3 billion, which is about 0.865% of the ZSE equity market – Harare

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