TSL remains buoyant despite drought

LISTED agro-industrial concern TSL says its financial performance since the start of the year has been satisfactory, despite numerous disruptions to the current agricultural season.
The southern African region as a whole has had patchy rains, a development that has compromised agro firms.
On one hand, Mozambique, Zimbabwe, and Malawi were hit by Cyclone Idai, which caused catastrophic damage.
The cyclone also disrupted agriculture.
On the other hand, Zimbabwe’s tobacco national crop is expected to be 10 to 15 percent down from last year, while there was a slow start to the selling season due to payment issues and average prices that are materially down.
However, TSL, which participates in the auctioning of tobacco, printing and packaging, supply of inputs to agriculture, storage and distribution services, remains buoyant that it will perform better this year despite the drought.
“At the time that we had our half-year, in April, tobacco prices where about $1,64 per kg compared to $2,8 per kg for the same time in the previous year,” Derek Odoteye, TSL’s recently appointed chief operating officer said at the company’s annual general meeting recently.

“However, our share of the independent market remains firm, we have over 65 percent. The TIMB gazetted prices are designed to help us retain value and this has had a positive impact on our financial performance,” he said.
He noted that the company made a significant investment in upgrading its facility and the process at the auction floors.
“This has made it much easier to do business with TSL and TSF. We are finding that the market has responded positively to the development,” said Odoteye.
And even though the company expects that the “economic pressures will persist to the second half”, Odoteye remains confident that TSL will continue to pursue its ‘moving agriculture’ strategy.
“We are therefore positioning the business to take advantage of the opportunities that currently exist in the market,” he said.
He noted that the company‘s upcoming half-year results will show that it has minimal foreign exposure.
“We have deployed a number of strategies to protect shareholder value, we have been increasing the amount of foreign currency that we have been generating and we have also stayed on top of pricing, which has been designed to make sure that we are able to replenish stocks that we sell.
“Our cash conversion cycle has also improved quite materially,” Odotey