Mishma Chakanyuka, Staff Writer 
TSL says it is set to change its functional currency to United States Dollars (US$) in the 2024 fiscal year to make its financials more understandable.
Late last year, companies listed on the Zimbabwe Stock Exchange were given the green light to report in either US$ or the local currency, indicating that the country’s economy is pushing strongly towards further dollarisation.
Presenting the group’s financial results for the year ended October 31, 2023, TSL’s chief executive, Derek Odoteye, said the Zim Dollar makes it difficult for the company to achieve the goal of making the financials understandable to the market.
The tobacco sales floor cumulatively handled 51,9 million kilograms (kgs) of tobacco for the year, a 125 percent increase on the prior year’s 23,1 million kgs.
“Zim dollar makes it very difficult to achieve results that are very understandable to the market. You have seen in the cautions that we have put out that trying to interpret these numbers in the absence of the flavour that we get through volumes was inevitable,” Odoteye said.
“So what we have agreed as the board is from this full year 2024, we are changing our functional reporting currency to US$.”
In the year under review, the group recorded a 159 percent surge in inflation underpinned by strong volume performance, particularly in the tobacco-related businesses.
The tobacco sales floor cumulatively handled 51,9 million kilograms (kgs) of tobacco for the year, a 125 percent increase on the prior year’s 23,1 million kgs.
TSL group chairman, Anthony Mandiwanza, said the 2022/23 summer cropping season was reasonable across most of the country, with adequate rains.
National tobacco volumes closed at 296 million kgs, 43 percent ahead of the prior year while the national average tobacco price at US$3,03/kg, was 1 percent below the prior year price of US$3,06/kg.
The independently grown tobacco crop closed at seven percent of the national crop.
TSL’s operating profit before fair value adjustments was 89 percent above prior year.
“The ZWL$ cost structure of the business was inflated due to exchange rate volatility whilst foreign currency revenues were recorded at the official exchange rate,” Mandiwanza said in a statement accompanying the financials.
He said the local currency borrowings which had unsustainably high interest rates were paid off early in the year resulting in a reduction in finance costs by 50 percent compared to prior year.
He highlighted that the group continues to prioritise the enhancement of shareholder value and sustainable growth.
