TSL says the execution of its strategy, which encompasses improving operating efficiencies and increasing capacity utilisation, has enhanced the group’s profitability despite the challenging operating environment.
In a trading update for the third quarter that ended July 31, 2023, TSL said the group’s profitability continued to grow, driven by improved operating efficiencies and increased capacity utilisation.
“A focus on executing the group’s strategy, which has incorporated investment in expanding capacity, utilising technology, improving operating efficiencies, securing new business and deployment of capital for value-enhanced profitability given the dynamics in the operating environment,” TSLsaid.
The group highlighted that it will continue to pursue key strategic initiatives in line with its “moving agriculture” strategy expected to have far-reaching benefits for the marketplace as a whole.
Meanwhile, TSL’s tobacco sales floor handled 51,9 million kilogrammes (kgs) of tobacco during the quarter, a 125 percent increase on the prior year’s 23,1 million kgs.
The agro-industrial firm said the increase is attributable to a larger national tobacco crop, successful decentralisation of operations and new customers.
“The strategy to serve the much larger contracted tobacco market is yielding fruit, with 75 percent of the total volumes handled coming from this segment,” TSL said in a trading update.
National tobacco volumes were at 293 million kgs at the end of July 2023, 44 percent ahead of the prior year and the national average tobacco price at US$3,04 per kg was at par with the prior year.
Propak hessian volumes were 17 percent ahead of the prior year owing to stock availability and a larger tobacco crop size.
Tobacco paper volumes were 90 percent ahead of the prior year, as the market has continued to respond positively to locally coated paper.
“Agricura’s performance for the quarter was mixed. While some product lines performed better than the previous year on the back of product availability and competitive pricing, other product lines were lower than budget due to depressed demand,” TSL said.
In the logistics operations, TSL said the new business model, which supports the customer throughout the value chain, increased volumes across the divisions.
“Tobacco handling volumes were significantly ahead of the prior year due to an increase in the customer base.
“The rail service from both Maputo and Beira has continued to operate and performance in the quarter was satisfactory,” TSL said.
“Clearing and forwarding volumes remained strong due to improved volumes from customers. General cargo handling volumes were buoyed by product movements to Zambia via the Beira corridor.”
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