TSL Limited (TSL) says new business innovations like the rail initiative and the new tobacco paper line significantly raised revenue margins for the third quarter ended July 31, 2022.
The diversified agro business firm commissioned a new tobacco paper manufacturing line in December 2021 and saw the introduction of a reliable rail service between Harare and Maputo since August 2021 in partnership with DP World and Unitrans.
In a trading update for the period, the group said revenue for the quarter was 61 percent ahead in inflation adjusted terms of prior year and 363 percent ahead in historical cost terms.
Tobacco Sales Floor cumulatively handled 23,1 million kgs of tobacco against 24,3 million kgs in the previous year, a five percent decline in the period under review.
“The operations remain profitable, and the group continues to prioritise the preservation of shareholder value. Gearing remains low with adequate interest cover. The business will continue to monitor its ZWL exposures in the light of recent developments,” TSL said. For the group’s agriculture operations, Tobacco Sales Floor cumulatively handled 23,1 million kgs of tobacco against 24,3 million kgs in the previous year, a five percent decline in the period under review.
“The strategy to serve the much larger contracted tobacco market is yielding fruit, with 62 percent of the total volumes handled coming from this segment. The business successfully opened a new floor in Mvurwi and the volumes therefrom were pleasing. This complements the business’ decentralised operations in Karoi, Marondera and Harare,” the group said.
Propak hessian volumes were 15 percent below prior year owing to a reduced national crop and a change in the timing of collection of packaging materials by merchants.
However, TSL expects the gap to narrow in the fourth quarter as the new tobacco paper manufacturing line that produces high quality, competitively priced paper was performing well on the market, driving volumes up by 24 percent.